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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

or

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

Commission file number: 001-36182

Xencor, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

20-1622502

(State or Other Jurisdiction of Incorporation

or Organization)

(I.R.S. Employer Identification No.)

111 West Lemon Avenue, Monrovia, CA

91016

(Address of Principal Executive Offices)

(Zip Code)

(626) 305-5900

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, par value $0.01 per share

XNCR

NASDAQ

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

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

Large accelerated filer    Accelerated filer    Non-accelerated filer    Smaller reporting company Emerging growth company

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes   No 

Indicate the number of shares of each of the issuer’s classes of common stock, as of the latest practicable date:

Class

Outstanding at October 31, 2019

Common stock, $0.01 par value

56,721,172

Table of Contents

Xencor, Inc.

Quarterly Report on FORM 10-Q for the quarter ended September 30, 2019

Table of Contents

Page

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

3

PART I.

FINANCIAL INFORMATION

4

Item 1.

Financial Statements

4

Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018

4

Statements of Comprehensive Income (Loss) for the Three and Nine Months ended September 30, 2019 and 2018 (unaudited)

5

Statement of Stockholders’ Equity for the Three and Nine Months ended September 30, 2019 and 2018 (unaudited)

6

Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)

7

Notes to Financial Statements (unaudited)

8

Item 2.

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

26

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

34

PART II.

OTHER INFORMATION

35

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 6.

Exhibits

36

Signatures

37

In this report, unless otherwise stated or the context otherwise indicates, references to “Xencor,” “the Company,” “we,” “us,” “our” and similar references refer to Xencor, Inc. The Xencor logo is a registered trademark of Xencor, Inc. This report also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders.

2

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Forward-looking statements can often be identified by the use of terminology such as “subject to”, “believe”, “anticipate”, “plan”, “expect”, “intend”, “estimate”, “project”, “may”, “will”, “should”, “would”, “could”, “can”, the negatives thereof, variations thereon and similar expressions, or by discussions of strategy.

All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but they are inherently uncertain. We may not realize our expectations, and our beliefs may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements. The following uncertainties and factors, among others (including those set forth under “Risk Factors”), could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:

our plans to research, develop and commercialize our product candidates;

our ongoing and planned clinical trials;

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

our ability to identify additional products or product candidates with significant commercial potential that are consistent with our business objectives;

the rate and degree of market acceptance and clinical utility of our products;

the capabilities and strategy of our suppliers and vendors including key manufacturers of our clinical drug supplies;

significant competition in our industry;

costs of litigation and the failure to successfully defend lawsuits and other claims against us;

our partners’ ability to advance drug candidates into, and successfully complete, clinical trials;

our ability to receive research funding and achieve anticipated milestones under our collaborations;

our intellectual property position;

loss or retirement of key members of management;

costs of compliance and our failure to comply with new and existing governmental regulations;

failure to successfully execute our growth strategy, including any delays in our planned future growth; and

our failure to maintain effective internal controls.

The factors, risks and uncertainties referred to above and others are more fully described under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements should be regarded solely as our current plans, estimates and beliefs. You should not place undue reliance on forward-looking statements. We cannot guarantee future results, events, levels of activity, performance or achievements. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

3

Table of Contents

PART I — FINANCIAL INFORMATION

Item1.          Financial Statements

Xencor, Inc.

Balance Sheets

(In thousands, except share amounts)

    

September 30, 

    

December 31, 

2019

2018

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

51,189

$

26,246

Marketable securities

495,292

268,115

Accounts receivable

4,349

 

10,187

Income tax receivable

402

804

Contract asset

15,000

Prepaid expenses and other current assets

7,533

 

10,375

Total current assets

573,765

 

315,727

Property and equipment, net

 

13,868

 

11,813

Patents, licenses, and other intangible assets, net

14,027

 

11,969

Marketable securities - long term

73,995

236,108

Income tax receivable

402

804

Other assets

 

10,187

 

311

Total assets

$

686,244

$

576,732

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

8,304

$

3,797

Accrued expenses

7,832

 

9,662

Deferred rent

315

Lease liabilities

2,197

Deferred revenue

45,579

 

40,079

Income tax payable

 

400

 

Total current liabilities

64,312

 

53,853

Deferred rent, net of current portion

1,198

Lease liabilities, net of current portion

9,082

Deferred revenue, net of current portion

2,613

Total liabilities

76,007

 

55,051

Commitments and contingencies

Stockholders’ equity

Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at September 30, 2019 and December 31, 2018

Common stock, $0.01 par value: 200,000,000 authorized shares at September 30, 2019 and December 31, 2018; 56,714,788 issued and outstanding at September 30, 2019 and 56,279,542 issued and outstanding at December 31, 2018

567

 

563

Additional paid-in capital

877,724

 

845,366

Accumulated other comprehensive income (loss)

1,436

 

(971)

Accumulated deficit

 

(269,490)

 

(323,277)

Total stockholders’ equity

 

610,237

 

521,681

Total liabilities and stockholders’ equity

$

686,244

$

576,732

See accompanying notes.

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Table of Contents

Xencor, Inc.

Statements of Comprehensive Income (Loss)

(unaudited)

(In thousands, except share and per share data)

Three Months Ended

 

Nine Months Ended

September 30, 

 

September 30, 

    

2019

    

2018

 

2019

    

2018

Revenue

Collaborations, licenses, milestones, and royalties

$

21,760

$

29,039

$

153,184

$

29,039

Operating expenses

Research and development

 

29,770

 

20,953

 

91,250

 

70,371

General and administrative

 

6,266

 

7,435

 

17,537

 

16,955

Total operating expenses

 

36,036

 

28,388

 

108,787

 

87,326

Income (loss) from operations

 

(14,276)

 

651

 

44,397

 

(58,287)

Other income (expenses)

Interest income, net

 

3,699

 

2,642

 

10,201

 

6,279

Other income (expense), net

3

(143)

(211)

(202)

Total other income, net

 

3,702

 

2,499

 

9,990

 

6,077

Net income (loss) before income tax expense (benefit)

(10,574)

3,150

54,387

(52,210)

Income tax expense (benefit)

(350)

600

Net income (loss)

(10,224)

3,150

53,787

(52,210)

Other comprehensive income (loss)

Net unrealized gain (loss) on marketable securities

(193)

(330)

2,407

(530)

Comprehensive income (loss)

$

(10,417)

$

2,820

$

56,194

$

(52,740)

Basic net income (loss) per common share

$

(0.18)

$

0.06

$

0.95

$

(0.98)

Diluted net income (loss) per common share

$

(0.18)

$

0.05

$

0.92

$

(0.98)

Basic weighted average common shares outstanding

56,643,075

55,974,080

56,449,678

53,165,774

Diluted weighted average common shares outstanding

56,643,075

58,313,002

58,365,158

53,165,774

See accompanying notes.

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Table of Contents

Xencor, Inc.

Statement of Stockholders’ Equity

(in thousands, except share data)

Accumulated

Additional

Other

Total

Common Stock

Paid

Comprehensive

Accumulated

Stockholders’

Stockholders’ Equity

Shares

Amount

in-Capital

Income (Loss)

Deficit

Equity

Balance, December 31, 2018

56,279,542

563

845,366

(971)

(323,277)

521,681

Issuance of common stock upon exercise of stock awards

58,536

1

666

667

Issuance of restricted stock units

11,311

Comprehensive income

1,316

80,045

81,361

Stock-based compensation

5,856

5,856

Balance, March 31, 2019

56,349,389

$

564

$

851,888

$

345

$

(243,232)

$

609,565

Issuance of common stock upon exercise of stock awards

143,504

1

3,238

3,239

Issuance of common stock under the Employee Stock Purchase Plan

36,505

734

734

Comprehensive income (loss)

1,284

(16,034)

(14,750)

Stock-based compensation

9,303

9,303

Balance, June 30, 2019

56,529,398

$

565

$

865,163

$

1,629

$

(259,266)

$

608,091

Issuance of common stock upon exercise of stock awards

185,390

2

3,047

3,049

Comprehensive loss

(193)

(10,224)

(10,417)

Stock-based compensation

9,514

9,514

Balance, September 30, 2019 (unaudited)

56,714,788

$

567

$

877,724

$

1,436

$

(269,490)

$

610,237

Accumulated

Additional

Other

Total

Common Stock

Paid

Comprehensive

Accumulated

Stockholders’

Stockholders’ Equity

Shares

Amount

in-Capital

Income (Loss)

Deficit

Equity

Balance, December 31, 2017

47,002,488

470

570,670

(1,808)

(287,286)

282,046

Adoption of ASC 606

34,418

34,418

Balance December 31, 2017 as revised

47,002,488

470

570,670

(1,808)

(252,868)

316,464

Sale of common stock, net of issuance cost

8,395,000

84

245,421

245,505

Issuance of common stock upon exercise of stock awards

219,387

2

1,108

1,110

Comprehensive loss

(393)

(29,493)

(29,886)

Stock-based compensation

4,471

4,471

Balance, March 31, 2018

55,616,875

$

556

$

821,670

$

(2,201)

$

(282,361)

$

537,664

Sale of common stock, net of issuance cost

(1)

(1)

Issuance of common stock upon exercise of stock awards

177,883

2

1,803

1,805

Issuance of common stock under the Employee Stock Purchase Plan

26,552

504

504

Comprehensive income (loss)

193

(25,869)

(25,676)

Stock-based compensation

4,882

4,882

Balance, June 30, 2018

55,821,310

$

558

$

828,858

$

(2,008)

$

(308,230)

$

519,178

Issuance of common stock upon exercise of stock awards

391,139

4

4,150

4,154

Comprehensive income (loss)

(330)

3,150

2,820

Stock-based compensation

6,120

6,120

Balance, September 30, 2018

56,212,449

$

562

$

839,128

$

(2,338)

$

(305,080)

$

532,272

See accompanying notes.

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Table of Contents

Xencor, Inc.

Statements of Cash Flows

(unaudited)

(in thousands)

Nine Months Ended

September 30, 

    

2019

    

2018

Cash flows from operating activities

Net income (loss)

$

53,787

$

(52,210)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

 

3,073

 

2,368

Amortization of premium and accretion of discount on marketable securities

 

(3,333)

 

68

Stock-based compensation

 

24,673

 

15,473

Abandonment of capitalized intangible assets

 

115

 

118

Loss on disposal of assets

8

110

Changes in operating assets and liabilities:

Accounts receivable

 

5,903

 

(1,320)

Interest receivable

(3)

(624)

Contract asset

(15,000)

Prepaid expenses and other assets

 

2,843

 

(6,535)

Accounts payable

 

4,508

 

(886)

Accrued expenses

 

(1,830)

 

192

Income taxes

1,204

(156)

Deferred rent

(1,513)

466

Lease liabilities and ROU assets

1,403

Deferred revenue

 

8,113

 

(20,039)

Net cash provided by (used in) operating activities

 

83,951

 

(62,975)

Cash flows from investing activities

Purchase of marketable securities

 

(352,174)

 

(331,126)

Purchase of intangible assets

 

(2,932)

 

(1,302)

Purchase of property and equipment

 

(4,443)

 

(4,425)

Proceeds from maturities of marketable securities

292,852

165,134

Repayment of loan

86

Net cash used in investing activities

 

(66,697)

 

(171,633)

Cash flows from financing activities

Proceeds from issuance of common stock upon exercise of stock awards

 

6,955

 

7,068

Proceeds from issuance of common stock under the Employee Stock Purchase Plan

734

504

Proceeds from issuance of common stock

260,245

Common stock issuance costs

(14,741)

Net cash provided by financing activities

 

7,689

 

253,076

Net increase in cash and cash equivalents

 

24,943

 

18,468

Cash and cash equivalents, beginning of period

 

26,246

 

16,528

Cash and cash equivalents, end of period

$

51,189

$

34,996

Supplemental disclosure of cash flow information

Cash paid during the period for:

Interest

$

11

$

9

Income taxes

$

200

$

170

Supplemental disclosures of non-cash investing activities

Unrealized gain (loss) on marketable securities, net of tax

$

2,407

$

(530)

See accompanying notes.

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Table of Contents

Xencor, Inc.

Notes to Financial Statements

(unaudited)

September 30, 2019

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim financial statements for Xencor, Inc. (the Company, Xencor, we or us) 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. 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 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 26, 2019.

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 royalties and accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization, estimated standalone selling price of performance obligations, the likelihood of recognizing variable consideration, and recoverability of deferred tax 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 impairment charges recorded for the nine months ended September 30, 2019 and 2018.

The Company capitalizes certain in-process intangible assets that are abandoned when they are no longer pursued or used in current research activities. There was no material abandonment of in-process intangible assets during the nine months ended September 30, 2019 or 2018.

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Table of Contents

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 debt securities issued by investment grade institutions.

The Company considers its marketable debt 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 debt securities is included in marketable securities. If a decline in the value of a marketable debt 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 debt 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 2019

Effective January 1, 2019, the Company adopted Accounting Standards Codification Topic 842 (ASC 842), Leases, which requires lessees to recognize a right-of-use (ROU) asset and a lease liability for leases with terms greater than 12 months and also requires disclosures about the amount, timing and uncertainty of cash flows arising from such leases. The Company adopted ASC 842 using the optional transition method provided under ASU 2018-11, which did not require adjustments to comparative periods nor require modified disclosures in those comparative periods. Under this method, the Company adjusted its financial statements for the cumulative effect of the adoption of ASC 842 at the beginning of January 1, 2019.

At inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances. For leases with a term of one year or longer where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The interest rate implicit with such leases is typically not readily determined. The Company has determined the appropriate incremental borrowing rate by reference to an estimate of the current market borrowing rate for a collateralized asset over a similar term as the lease term.

The new standard impacts our reporting on the leases on our facilities in Monrovia and San Diego. Under ASC 842, tenant allowances under such operating leases are no longer tracked separately as a deferred rent liability; instead, it is integrated as part of the ROU asset. As a result, we recorded an adjustment to the beginning balance for deferred rent liability and adopted the use of ROU asset and lease liability. We recorded lease liabilities of $12.7 million and ROU assets of $11.4 million for lease agreements in effect as of January 1, 2019. The ROU asset is included in Other assets on the balance sheet as of September 30, 2019. This resulted in an increase to the beginning balance on both assets and liabilities after the adjustment of $11.2 million, with no impact on our retained earnings.

Effective January 1, 2019, the Company adopted 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 requires a modified retrospective transition approach, with a cumulative adjustment to retained earnings as of adoption date, for all liability-classified awards that have not been settled as of the adoption date and equity-classified nonemployee awards for which a measurement date has not been established. The adoption of this standard did not have any impact on the Company’s financial statements.

There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2018 Annual Report on Form 10-K.

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Table of Contents

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). 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):

September 30, 2019

December 31, 2018

    

Total

    

    

    

Total

    

    

Fair Value

Level 1

Level 2

Fair Value

Level 1

Level 2

Money Market Funds

$

30,603

$

30,603

$

$

18,270

$

18,270

$

Corporate Securities

217,702

217,702

104,967

104,967

Government Securities

351,585

351,585

399,256

399,256

$

599,890

$

30,603

$

569,287

$

522,493

$

18,270

$

504,223

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 nine months ended September 30, 2019 and 2018, there were no transfers between Level 1 and Level 2. The Company does not have any Level 3 assets or liabilities.

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3. Net Income (Loss) Per Share

We compute basic net income (loss) per common share by dividing the net income (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 income (loss) per share is computed by dividing the net income (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, employee stock purchase plan (ESPP) and restricted stock units (RSUs). Potentially dilutive securities consisting of stock issuable under options, ESPP and RSUs are not included in the per common share calculation in periods where there is a net loss where the inclusion of such shares would have had an antidilutive effect.

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

Three Months Ended

 

Nine Months Ended

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

(in thousands, except share and per share data)

Numerator:

Net income (loss) attributable to common stockholders

$

(10,224)

$

3,150

$

53,787

$

(52,210)

Denominator:

Weighted-average common shares outstanding used in computing basic net income (loss)

 

56,643,075

 

55,974,080

56,449,678

53,165,774

Weighted-average common shares outstanding used in computing diluted net income (loss)

56,643,075

58,313,002

58,365,158

53,165,774

Basic net income (loss) per common share

$

(0.18)

$

0.06

$

0.95

$

(0.98)

Diluted net income (loss) per common share

$

(0.18)

$

0.05

$

0.92

$

(0.98)

For the three months ended September 30, 2019 and the nine months ended September 30, 2018, 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. For the three months ended September 30, 2018 and the nine months ended September 30, 2019, potentially dilutive securities were included in the diluted net income per common share calculation.

The numbers of common stock equivalents that were included in the calculation of the weighted-average common shares outstanding used in computing diluted net income per common share are as follows:

Three Months Ended

 

Nine Months Ended

September 30, 

 

September 30, 

    

2019

    

2018

 

2019

    

2018

(in thousands)

 

(in thousands)

Employee stock purchase plan shares

 

 

20

 

Options to purchase common stock and RSU grants

 

 

2,339

1,895

 

 

 

2,339

1,915

 

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The table below summarizes the number of common stock equivalents that were excluded in the calculation of the weighted-average common shares outstanding used in computing diluted net income (loss) because the inclusion of such shares would have had an antidilutive effect as follows:

Three Months Ended

 

Nine Months Ended

September 30, 

 

September 30, 

    

2019

    

2018

 

2019

    

2018

(in thousands)

 

(in thousands)

Employee stock purchase plan shares

 

6

 

 

Options to purchase common stock and RSU grants

 

2,261

 

 

1,884

 

2,267

 

 

1,884

4. Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). For the three and nine months ended September 30, 2019 and 2018, the only component of other comprehensive income (loss) is net unrealized gain (loss) on marketable securities. There were no material reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2019 and 2018.

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Table of Contents

5. Marketable Securities

The Company’s marketable debt securities held as of September 30, 2019 and December 31, 2018 are summarized below:

Gross

Gross

    

Amortized

    

Unrealized

Unrealized

    

September 30, 2019

Cost

Gains

Losses

Fair Value

(in thousands)

Money Market Funds

$

30,603

$

$

$

30,603

Corporate Securities

217,484

228

(10)

217,702

Government Securities

350,358

1,227

351,585

$

598,445

$

1,455

$

(10)

$

599,890

Reported as

Cash and cash equivalents

$

30,603

Marketable securities

569,287

Total investments

$

599,890

Gross

Gross

    

Amortized

    

Unrealized

Unrealized

    

December 31, 2018

Cost

Gains

Losses

Fair Value

(in thousands)

Money Market Funds

$

18,270

$

$

$

18,270

Corporate Securities

105,311

1

(345)

104,967

Government Securities

399,873

187

(804)

399,256

$

523,454

$

188

$

(1,149)

$

522,493

Reported as

Cash and cash equivalents

$

18,270

Marketable securities

504,223

Total investments