Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2015	Feb. 26, 2016	Jun. 30, 2015
Document and Entity Information
Entity Registrant Name	Xencor Inc
Entity Central Index Key	0001326732
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 490,431,477
Entity Common Stock, Shares Outstanding		40,582,039
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets
Cash	$ 12,590	$ 54,649
Marketable securities	83,840
Accounts receivable	44	2,966
Prepaid expenses and other current assets	1,201	134
Total current assets	97,675	57,749
Property and equipment, net	2,310	899
Patents, licenses, and other intangible assets, net	9,971	9,116
Marketable securities - long term	96,891
Other assets	63	59
Total assets	206,910	67,823
Current liabilities
Accounts payable	6,400	1,691
Accrued expenses	3,634	2,251
Current portion of deferred rent	108
Current portion of deferred revenue	33,287	2,254
Total current liabilities	43,429	6,196
Deferred rent, less current portion	507
Deferred revenue, less current portion	542	2,337
Total liabilities	$ 44,478	$ 8,533
Commitments and contingencies (see note 10)
Stockholders' equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2015 and 2014
Common stock, $0.01 par value: 200,000,000 authorized shares; 40,551,039 issued and outstanding shares at December 31, 2015 and 31,434,272 issued and outstanding at December 31, 2014	$ 405	$ 314
Additional paid-in capital	424,128	302,969
Accumulated other comprehensive income	(516)
Accumulated deficit	(261,585)	(243,993)
Total stockholders' equity	162,432	59,290
Total liabilities and stockholders' equity	$ 206,910	$ 67,823

Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
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	40,551,039	31,434,272
Common Stock, shares outstanding	40,511,039	31,434,272

Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue
Collaborations, licenses and milestones	$ 27,762	$ 9,520	$ 10,172
Operating expenses
Research and development	34,140	18,516	17,000
General and administrative	11,960	7,461	3,692
Total operating expenses	46,100	25,977	20,692
Loss from operations	(18,338)	(16,457)	(10,520)
Other income (expenses)
Interest income	1,840	33	14
Interest expense	(13)	(9)	(1,213)
Other income (expense)	(1,081)	11	16
Loss on settlement of convertible promissory notes			(48,556)
Total other income (expenses), net	746	35	(49,739)
Net loss	(17,592)	(16,422)	(60,259)
Net deemed contribution on exchange of preferred stock			144,765
Net income (loss) attributable to common stockholders	(17,592)	(16,422)	84,506
Other comprehensive loss
Net unrealized loss on marketable securities available-for-sale	(516)
Comprehensive loss	$ (18,108)	$ (16,422)	$ (60,259)
Net income (loss) per share attributable to common shareholders:
Basic (in dollars per share)	$ (0.45)	$ (0.52)	$ 34.18
Diluted (in dollars per share)	$ (0.45)	$ (0.52)	$ (3.85)
Weighted average shares used to compute net income (loss) per share attributable to common stockholders:
Basic (in shares)	39,015,131	31,390,631	2,472,581
Diluted (in shares)	39,015,131	31,390,631	15,645,789

Statements of Mezzanine Equity - 12 months ended Dec. 31, 2013 - USD ($) $ in Thousands	Series A Convertible Preferred Stock	Series B Convertible Preferred Stock	Series C Convertible Preferred Stock	Series D Convertible Preferred Stock	Series E Convertible Preferred Stock	Series A-1 Convertible Preferred Stock	Series A-2 Convertible Preferred Stock
Balance at Dec. 31, 2012	$ 3,550	$ 12,375	$ 50,000	$ 20,000	$ 60,841
Balance (in shares) at Dec. 31, 2012	857,792	1,328,941	2,416,281	7,936,483	25,245,566
Increase (Decrease) in Stockholders' Equity
Series A-1 shares issued in exchange of convertible notes						$ 70,689
Series A-1 shares issued in exchange of convertible notes (in shares)						45,902,321
Exchange of Series A-1 and A-2 preferred for common stock						$ (78,526)	$ (1,075)
Exchange of Series A-1 and A-2 preferred for common stock (in shares)						(49,671,392)	(1,851,814)
Exchange of Series A-E Preferred for Series A-1 preferred stock	$ (3,550)	$ (12,375)	$ (50,000)	$ (20,000)	$ (60,841)	$ 3,045
Exchange of Series A-E Preferred for Series A-1 preferred stock (in shares)	(857,792)	(1,328,941)	(2,416,281)	(7,936,483)	(25,245,566)	1,977,137
Exchange of Series A-1 preferred for Series A-2 preferred stock						$ (8,563)	$ 1,075
Exchange of Series A-1 preferred for Series A-2 preferred stock (in shares)						(5,561,006)	1,851,814
Sale of Series A-1 preferred stock						$ 13,355
Sale of Series A-1 preferred stock (in shares)						7,352,940

Statement of Stockholders’ Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance at Dec. 31, 2012	$ 1	$ 1,043		$ (167,312)	$ (166,268)
Balance (in shares) at Dec. 31, 2012	72,302
Increase (Decrease) in Stockholders' Equity
Deemed contribution on exchange of Series A-E Preferred Stock for Series A-1		143,681			143,681
Deemed contribution on exchange of Series A-1 preferred for Series A-2 preferred stock		7,489			7,489
Deemed dividend on sale of Series A-1 preferred		(3,429)			(3,429)
Exchange of Series A-1 and A-2 preferred for common stock	$ 166	79,435			79,601
Exchange of Series A-1 and A-2 preferred for common stock (in shares)	16,620,274
Sale of common stock, net of issuance cost	$ 146	72,361			72,507
Sale of common stock, net of issuance cost (in shares)	14,639,500
Issuance of common stock upon exercise and vesting of stock awards	$ 1	12			13
Issuance of common stock upon exercise and vesting of stock awards (in shares)	22,391
Net loss				(60,259)	(60,259)
Comprehensive loss					(60,259)
Stock-based compensation expense		198			198
Balance at Dec. 31, 2013	$ 314	300,790		(227,571)	73,533
Balance (in shares) at Dec. 31, 2013	31,354,467
Increase (Decrease) in Stockholders' Equity
Issuance of common stock upon exercise and vesting of stock awards		11			11
Issuance of common stock upon exercise and vesting of stock awards (in shares)	15,941
Net loss				(16,422)	(16,422)
Issuance of common stock under the Employee Stock Purchase Plan		307			307
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	63,864
Comprehensive loss					(16,422)
Stock-based compensation expense		1,861			1,861
Balance at Dec. 31, 2014	$ 314	302,969		(243,993)	59,290
Balance (in shares) at Dec. 31, 2014	31,434,272
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance cost	$ 86	115,118			115,204
Sale of common stock, net of issuance cost (in shares)	8,625,000
Issuance of common stock upon exercise and vesting of stock awards	$ 4	550			554
Issuance of common stock upon exercise and vesting of stock awards (in shares)	379,268
Net loss					(17,592)
Issuance of common stock under the Employee Stock Purchase Plan	$ 1	622			623
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	112,499
Comprehensive loss			$ (516)	(17,592)	(18,108)
Stock-based compensation expense		4,869			4,869
Balance at Dec. 31, 2015	$ 405	$ 424,128	$ (516)	$ (261,585)	$ 162,432
Balance (in shares) at Dec. 31, 2015	40,551,039

Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities
Net loss	$ (17,592)	$ (16,422)	$ (60,259)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	1,113	882	711
Amortization of premium on marketable securities	1,096
Stock-based compensation	4,869	1,861	198
Abandonment of capitalized intangible assets	296	509	205
Gain on disposal of assets	(9)	(2)	(16)
Gain on sale of marketable securities available-for-sale	(5)
Loss on exchange of notes for preferred stock			48,556
Accrued interest on convertible promissory notes			1,211
Changes in operating assets and liabilities:
Accounts receivable	2,922	(2,907)	293
Interest receivable	(898)
Prepaid expenses and other current assets	(1,068)	(73)	115
Other assets	(3)	41	(20)
Accounts payable	4,710	(943)	1,319
Accrued expenses	1,425	859	109
Deferred rent	572
Deferred revenue	29,238	(5,156)	2,125
Net cash provided by (used in) operating activities	26,666	(21,351)	(5,453)
Cash flows from investing activities
Proceeds from sale and maturities of marketable securities available-for-sale	34,358
Proceeds from sale of property and equipment	9	2	16
Purchase of marketable securities	(215,798)
Purchase of intangible assets	(1,745)	(1,505)	(1,158)
Purchase of property and equipment	(1,930)	(780)	(136)
Net cash used in investing activities	(185,106)	(2,283)	(1,278)
Cash flows from financing activities
Proceeds from the sale of Series A-1 preferred			10,000
Proceeds from issuance of common stock upon exercise of stock awards	554	9	13
Proceeds from issuance of common stock under the Employee Stock Purchase Plan	623	307
Proceeds from issuance of common stock	122,906		80,517
Preferred stock issuance cost			(116)
Common stock issuance costs	(7,702)		(8,010)
Payments on capital lease obligations		(8)	(10)
Net cash provided by financing activities	116,381	308	82,394
Net increase (decrease) in cash and cash equivalents	(42,059)	(23,326)	75,663
Cash, beginning of period	54,649	77,975	2,312
Cash, end of period	12,590	54,649	77,975
Cash paid for:
Interest	13	9	1
Taxes	1	$ 1
Supplemental disclosures of non-cash investing and financing activities
Capitalization of licensing rights acquired in non-monetary exchange	$ 516
Settlement of notes payable for preferred stock			$ 22,134

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Description of Business

Xencor, Inc. (we, us, our, or the Company) was incorporated in California in 1997 and reincorporated in Delaware in September 2004. We are a clinical‑stage biopharmaceutical company focused on discovering and developing engineered monoclonal antibodies to treat severe and life‑threatening diseases with unmet medical needs. We use our proprietary XmAb technology platform to create next‑generation antibody product candidates designed to treat autoimmune and allergic diseases, cancer, and other conditions. We focus on the portion of the antibody that interacts with multiple segments of the immune system, referred to as the Fc domain, which is constant and interchangeable among antibodies. Our engineered Fc domains, the XmAb technology, are applied to our pipeline of antibody‑based drug candidates to increase immune inhibition, improve cytotoxicity, extend half‑life and most recently bispecific antibodies.

Our operations are based in Monrovia and San Diego, California.

Basis of Presentation

The Company’s financial statements as of December 31, 2015, 2014, and 2013 and for the years then‑ended have been prepared in accordance with accounting principles generally accepted in the United States.

Reverse Stock Split and Conversion of Preferred Stock

On November 1, 2013, our board of directors and the requisite holders of our voting stock authorized the filing of a certificate of amendment to our amended and restated certificate of incorporation for the purposes of effecting a 3.1‑for‑1 reverse split of the common stock. The certificate of amendment was filed on November 1, 2013 and the stock split became effective as of that date. Accordingly, all references to numbers of common shares, including the number of common shares on an as‑if‑converted basis, per‑share data, share prices and exercise prices in the accompanying financial statements have been adjusted to reflect the reverse stock split on a retroactive basis.

Each 3.1 share of convertible preferred stock was convertible, at the stockholder’s option, into one share of common stock. Additionally, each share of convertible preferred stock was automatically converted into common stock, at the then‑effective conversion rate upon the effective date of a registration statement filed with the SEC under the Securities Act or Exchange act.

On December 3, 2013, our registration statement on Form S‑1 related to our initial public offering became effective and 49,671,392 shares of Series A‑1 preferred stock converted into 16,022,915 shares of common stock and 1,851,814 shares of Series A‑2 preferred stock converted into 597,359 shares of common stock.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include useful lives of long-lived assets, the periods over which certain revenues and expenses will be recognized including collaboration revenue recognized from non-refundable upfront licensing payments, the amount of non-cash compensation costs related to share-based payments to employees and non-employees and the period over which these costs are expensed.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers”, which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. This new revenue recognition standard will replace most of the recognition guidance within the United States GAAP. In July 2015, the FASB announced that the new pronouncement will be effective for reporting periods beginning after December 15, 2017. The new pronouncement permits the use of either the retroactive or cumulative effect transition method. We are currently evaluating the effect that ASU 2014-09 will have on our financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15 “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, which requires management to assess its ability to continue as a going concern and to provide related footnote disclosure in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016 unless we adopt it earlier. We are currently evaluating the impact of adopting ASU 2014-15 on our financial statements and related disclosures.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Liabilities” which eliminates the available-for-sale classification for equity securities and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. In addition it updates certain presentation and disclosure requirements. The new standard will be effective for reporting periods beginning after December 15, 2017 and we are currently evaluating the impact of adopting ASU 2016-01 on our financial statements and related disclosures.

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. We are currently evaluating the impact of adopting ASU 2016-02 on our financial statements and related disclosures.

Revenue Recognition

We have, to date, earned revenue from research collaborations, which may include research and development services, licenses of our internally‑developed technologies, or a combination of both. We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; transfer of or access to technology has been completed or services have been rendered; our price to the customer is fixed or determinable and collectability is reasonably assured.

The terms of our license and research and development agreements generally include non-refundable upfront payments, research funding, license fees and, milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain clinical, regulatory and sales‑based events, as well as royalties on sales of any commercialized products.

The terms of our licensing agreements include non‑refundable upfront fees, annual licensing fees, and contractual payment obligations for the achievement of pre‑defined preclinical, clinical, regulatory and sales‑based events by our partners. The licensing agreements also include royalties on sales of any commercialized products by our partners.

Multiple‑Element Revenue Arrangements. Certain of our collaboration and license agreements represent multiple‑element revenue arrangements. To account for such transactions, we determine the elements, or deliverables, included in the arrangement and determine which deliverables are separate units for accounting purposes. We consider delivered items to be separate units of accounting if the delivered items have stand‑alone value to the customer. If the delivered items are separate units we allocate the consideration received or due under the arrangement to the various elements based on each elements’ relative selling price. The identification of individual elements in a multiple‑element arrangement and the estimation of the selling price of each element involve significant judgment, including consideration as to whether each delivered element has standalone value to the customer. We determine the estimated selling price for deliverables within each arrangement using vendor‑specific objective evidence (VSOE) of selling price, if available, or third‑party evidence of selling price if VSOE is not available, or our best evidence of selling price if neither VSOE nor third‑party evidence is available. To date, we have used our best evidence of selling price for each of our deliverables.

Determining the best estimate of selling price for a deliverable requires significant judgment. We use our best estimate of selling price to estimate the selling price for licenses to our technologies and product candidates, since we do not have VSOE or third‑party evidence of selling price for these deliverables. The basis of our estimate of selling price is the arm’s length negotiation with the licensee that occurs in each transaction. The potential value of our technology to a licensee in a transaction depends on a variety of factors unique to each transaction. Factors that impact the negotiation and hence that we consider in our estimates center on the specific product candidate and include: the product candidate’s potential market size, the product candidate’s stage of development, the existence of competitive technologies that could be substituted for ours by the licensee and the scientific assessment of the product candidate’s likelihood of success at various development stages. The most common deliverable is the commercial license for our technology in the product candidate, and frequently a research license with an option for commercial license. The upfront payments, annual license fees, contingent payments, milestones and royalties relate to these licenses and/or options and depend on the product‑specific factors described above. The other significant deliverable is research and development services and the price for these depends on estimates for our personnel and supply costs and the costs of third‑party contract research organizations necessary to support the services.

We recognize consideration allocated to an individual element when all other revenue recognition criteria are met for that element. Our multiple‑element revenue arrangements may include the following:

License arrangements. The deliverables under our collaboration and license agreements generally include exclusive or non‑exclusive licenses to one or more of our technologies. The technologies can be applied to a collaborator’s product candidates for discovery, development, manufacturing and commercialization. We will also enter into agreements for the exclusive or non‑exclusive licenses to our internally developed product candidates. To account for this element of the arrangement, we evaluate whether the exclusive or non‑exclusive license has standalone value apart from the undelivered elements to the collaboration partner, which may include research and development services or options for commercial licenses, based on the consideration of the facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and other market participants. We recognize arrangement consideration allocated to licenses upon delivery of the license, if the facts and circumstances indicate the license has standalone value apart from the undelivered elements. If facts and circumstances indicate that the delivered license does not have standalone value from the undelivered elements, we recognize the revenue as a combined unit of accounting. In those circumstances we recognize revenue from non‑refundable upfront fees in the same manner as the undelivered item(s), which is generally the period over which we provide research and developments services.

Research and Development Services. The deliverables under our collaboration and license arrangements may include research and development services we perform on behalf of or with the collaboration partner. As the provision of research and development services is an integral part of our operations and we may be principally responsible for the performance of these services under the agreements, we recognize revenue on a gross basis for research and development services as we perform those services. Additionally, we recognize research related funding under collaboration research and development efforts as revenue as we perform or deliver the related services in accordance with contract terms.

Milestone Revenue. Our collaboration and license agreements generally include contingent contractual payments related to achievement of specific research, development and regulatory milestones and sales‑based milestones that are based solely upon the performance of the licensee or collaborator. Research, development and regulatory contingent contractual payments and milestone payments are typically payable under our collaborations when our collaborator selects a compound, or initiates or advances a covered product candidate in preclinical or clinical development, upon submission for marketing approval of a covered product with regulatory authorities, upon receipt of actual marketing approvals of a covered product or for additional indications, or upon the first commercial sale of a covered product. Sales‑based contingent contractual payments are typically payable when annual sales of a covered product reach specific levels.

At the inception of each arrangement that includes contingent contractual payments, we evaluate whether each potential payment and milestone is substantive and at risk to both parties based on the basis of the contingent nature of the milestone event. We evaluate factors such as scientific, regulatory, commercial and other risks that we must overcome to achieve the respective milestone event, whether the contractual payments due at each milestone event is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment and whether the contingent contractual payment relates solely to past performance. Additionally, certain of our product development and technology license arrangements may include milestone payments related to the achievement of specific research and development milestones, which are achieved in whole or in part on our performance.

We recognize any payment that is contingent upon the achievement of a substantive milestone entirely in the period in which the milestone is achieved. A milestone is defined as an event that can only be achieved based in whole or in part either on our performance, or the performance of our collaborators, or the occurrence of a specific outcome resulting from our past performance for which there is a substantive uncertainty at the date the arrangement is entered into that the event will be achieved.

Collaborative Research and Licensing Agreements

Amgen Inc.

2015 Agreement

In September 2015, the Company entered into a research and license agreement (the 2015 Agreement) with Amgen Inc. (Amgen) to develop and commercialize bispecific antibody product candidates using the Company’s proprietary XmAb® bispecific Fc technology. Under the 2015 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 will also apply its bispecific technology to five previously identified Amgen provided targets (each a Discovery Program). The Company received a $45 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.

Following the Company’s transfer of the DNA sequences, constructs and preclinical data related to its CD38 Program to Amgen, Amgen will assume full responsibility for the further development and commercialization of product candidates under the CD38 Program. Assuming successful development and commercialization of a product, the Company could receive up to $355 million in milestones payments which include $55 million in development milestones, $70 million in regulatory milestones and, $230 million in sales milestones. If commercialized, the Company is eligible to receive from high single-digit up to low double-digit royalties on global net sales of approved products under the CD38 Program.

Under the 2015 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 if Xencor has not completed delivery of all five Discovery Program bispecific candidates to Amgen.

Amgen will assume full responsibility for development and commercialization of product candidates under each of the Discovery Programs. Assuming successful development and commercialization of each Discovery Program compound, the Company could receive up to $260.5 million in milestones for each compound which include $35.5 million in development milestones, $55 million in regulatory milestones and $170 million in sales milestones. If commercialized, the Company is eligible to receive mid to high single-digit royalties on global net sales of approved products.

The Company evaluated the 2015 Agreement with Amgen and determined that it is a revenue arrangement with multiple deliverables or performance obligations. The Company’s substantive performance obligations under the 2015 Agreement include delivery of the DNA sequences, constructs and preclinical data related to its CD38 Program and application of its bispecific technology to five Amgen provided targets and delivery of the five bispecific product candidates. The Company evaluated the 2015 Agreement with Amgen and determined that the CD38 Program and each of the five Discovery Programs represent separate units of accounting.

The $45 million upfront payment represents the total initial consideration and was allocated to each of the deliverables using the relative selling price method. After identifying each of the deliverables included in the arrangement, the Company determined its best estimate of selling price for each of the deliverables. In order to determine the best estimate of selling price for the CD38 Program, the Company determined the value of the CD38 Program by calculating a risk-adjusted present value of the potential revenue from the future development and regulatory milestones under the 2015 Agreement. This amount represents the value that a third party would be willing to pay as an upfront fee to license the Company’s CD38 Program.

The Company determined the value of each of the Discovery Programs by calculating a risk-adjusted net present value of the potential revenue from future development and regulatory milestones reduced by the estimated cost of the Company’s efforts to apply its bispecific technology to the Amgen targets and deliver the five bispecific product candidates. These amounts represent the value that a third party would be willing to pay as an upfront fee for access to the Company’s bispecific technology and capabilities.

The total allocable consideration of $45 million was allocated to the deliverables based on the relative selling price method as follows:

$13.75 million to the CD38 Program and,

$6.25 million to each of the five Discovery Programs

During the fourth quarter of 2015 we delivered the CD38 DNA sequences, constructs and preclinical data to Amgen. At the time that each bispecific Discovery Program is accepted by Amgen, the Company will recognize as collaboration revenue $6.25 million for each program. Since Amgen has substitution rights for up to three targets, revenue recognition may be delayed until the earlier that Amgen initiates non-human primate studies for a delivered bispecific Discovery Program or the right to substitute the target lapses.

During the year ended December 30, 2015, we recognized $13.75 million in revenue under this arrangement. As of December 31, 2015 there was $31.25 million in deferred revenue related to the arrangement.

2010 Agreement

In December 2010, we entered into a Collaboration and Option Agreement (the 2010 Agreement) with Amgen, pursuant to which we agreed to collaborate with Amgen on development of XmAb5871 in rheumatoid arthritis (RA) through completion of a Phase 2 proof-of-concept (POC) trial. After completion of the POC trial, we would deliver a data package to Amgen and they would have 90 days to review and decide whether to exercise an option to obtain worldwide rights to XmAb5871. Upon exercise of the option and payment of a $50 million option fee, Amgen would own all rights to the compound and be responsible for further development.

We received a nonrefundable upfront payment of $11million upon execution of the Collaboration Agreement and a $2 million milestone in January 2013 upon the initiation of a Phase 1b clinical trial.

In October 2014, we entered into an agreement with Amgen to terminate the 2010 Agreement pursuant to which all worldwide rights to develop and commercialize XmAb5871 reverted back to us. Our obligations to continue development of XmAb5871 under the terms of the 2010 Agreement terminated effective as of the date of the termination agreement. As a result of and effective as of the date of the termination agreement, all of Amgen’s rights to XmAb5871 terminated including the right to exercise an exclusive option to acquire the worldwide rights to XmAb5871. Amgen’s obligations to make any further payments to us are also terminated. In connection with the termination, we granted Amgen a right of first negotiation (ROFN) to obtain an exclusive license to develop and commercialize any XmAb5871 product.

The ROFN requires us to notify Amgen if we decide to pursue a licensing transaction with a third party involving XmAb5871. Upon receipt of the notification, Amgen will have a limited time to review the data from XmAb5871 and enter into negotiations to obtain an exclusive license to develop and commercialize any future XmAb5871 product. The ROFN will expire upon the earlier of: (1) October 27, 2019, (2) initiation by us of a Phase 3 clinical trial with XmAb5871 or (3) the transfer or sale to a third party of substantially all of our business.

We have determined that the termination results in a cancellation of all our obligations to Amgen under the 2010 Agreement. We have evaluated the terms of the ROFN and determined that it has de minimis value because Amgen’s rights under the ROFN are limited to an exclusive negotiating period of a short duration and there is no bargain element in the ROFN. As a result of the termination, we have recognized $5.2 million of income which represents the balance of the deferred revenue related to the agreement at the time of the termination.

The total revenue recognized under this arrangement was zero, $6.9 million and $2.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015 we have no deferred revenue related to this agreement.

Novo Nordisk A/S

In December 2014, we entered into a Collaboration and License Agreement with Novo Nordisk A/S (Novo). Under the terms of the agreement, we granted Novo a research license to use certain Xencor technologies including our bispecific, IIb, Xtend and others during a two year research term.

We are recognizing the $2.5 million upfront payment as income over the two year research term. The research funding is being recognized into income over the period that the services are being provided. We determined that future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones.

The total revenue recognized under this agreement was $2.9 million and $0.1 million for the years ended December 31, 2015 and 2014 respectively. As of December 31, 2015 we have $1.2 million in deferred revenue related to the agreement.

MorphoSys Ag

In June 2010, we entered into a Collaboration and License Agreement with MorpohSys AG (MorphoSys), which we subsequently amended in March 2012. The agreement provided us an upfront payment of $13 million in exchange for an exclusive worldwide license to our patents and know‑how to research, develop and commercialize our XmAb5574 product candidate (subsequently renamed MOR208) with the right to sublicense under certain conditions. Under the agreement, we agreed to collaborate with MorphoSys to develop and commercialize XmAb5574/MOR208. If certain developmental, regulatory and sales milestones are achieved, we are eligible to receive future milestone payments and royalties.

In April and May 2013, MorphoSys initiated two Phase II clinical trials under the arrangement and we received a milestone payment of $3 million. We have recognized the payment as revenue in the period that the milestone event occurred.

The total revenue recognized under this arrangement was zero for the years ended December 31, 2015 and 2014 and $3 million for the year ended December 31, 2013. As of December 31, 2015, we have no deferred revenue related to this agreement.

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 million. Alexion is also required to pay an annual maintenance fee of $0.5 million during the research term of the agreement and $1 million during any extension of the research term. In addition, if certain development, regulatory and commercial milestones are achieved, we are eligible to receive up to $66.5 million for the first product to achieve such milestones on a target‑by‑target basis. 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 sublicensees, 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 clinical development milestone with an undisclosed molecule to be used against an undisclosed target. In the fourth quarter of 2015, Alexion exercised its option to take an exclusive commercial license and achieved a further clinical development milestone.

The total revenue recognized under this arrangement was $8.5 million, $1.0 million and $0.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015 we have deferred revenue related to this agreement of $1.1 million.

Boehringer Ingelheim International GmbH

In 2007 we entered into a Research Licensee and Collaboration Agreement with Boehringer Ingelheim International GmbH (BI). Under the agreement, we provided BI with a three‑year research license to one of our technologies and commercial options. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to two compounds. Upon exercise of an option to a commercial license, we are eligible to receive future milestone payments and royalties. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. The upfront payment and the annual license fees were recognized ratably into income over the research license term which expired in 2011 and payments for the commercial options were recognized in the period the commercial option was exercised since the options were contingent and substantive. During 2012, BI advanced a compound that incorporates our technology into clinical development and we received a milestone payment of $1.2 million and recognized the payment as revenue in the period the milestone event occurred. No revenue related to this arrangement was recognized in 2015, 2014 or 2013. There is no deferred revenue related to this agreement at December 31, 2015.

Janssen, Research & Development, LLC

In 2009 we entered into a Research License and Option Agreement with Janssen, Research & Development, LLC (Janssen). Under the agreement, we provided Janssen with a non‑exclusive research license and options for exclusive commercial licenses to apply our technology to their compounds. No revenues related to this arrangement were recognized in 2015, 2014 and 2013. There is no deferred revenue related to this agreement at December 31, 2015.

CSL Limited

2009 Agreement

In 2009 we entered into a Research License and Commercialization Agreement with CSL Limited (CSL-2009). Under the agreement, we provided CSL with a research license to one of our technologies and up to five commercial options. The upfront payment of $0.75 million received at inception and the annual research license renewal payments were recognized as revenue ratably over the five‑year term of the research license.

In May 2013, we entered into an amendment to the February 2009 Research License and Commercialization Agreement with CSL, which eliminated a contingent milestone payment requirement and reduced the royalty rate on net sales for a product in development. The amendment provided for a payment upon signing of $2.5 million. We determined that the amendment was a material modification to the original agreement and evaluated the remaining deliverables at the date of the amendment. We determined that the remaining deliverables were the research license which expired in February 2014 and four additional options to take commercial licenses through the term of the research period. The options were considered to be substantive and contingent and we did not allocate any of the proceeds received in the amendment to the options. The amendment proceeds were recognized into income over the remaining period of the research term.

In 2013 CSL sublicensed CSL362 (now called JNJ-56022473) to Janssen Biotech Inc. (Janssen Biotech). In August 2015, CSL, through its sublicensee, Janssen Biotech, initiated a Phase 2 clinical trial for CSL362 for which we received a milestone payment.

Total revenue recognized for the years ended December 31, 2015, 2014 and 2013 was $2.5 million, $0.7 million and $2.4 million respectively. As of December 31, 2015 we have no deferred revenue related to this agreement.

2013 Agreement

In March 2013, we entered into a License Agreement with CSL Limited (CSL-2013). Under the terms of the agreement, we provided CSL with a non‑exclusive commercial license to apply our technology to one of their compounds. The agreement provided for upfront payment of $0.5 million and we are eligible to receive future milestones as CSL advances the compound into clinical development.

In March 2015 CSL notified us that they were terminating the 2013 agreement. We have no remaining obligations under the agreement. We did not recognize any revenue for the years ended December 31, 2015 and 2014. We recognized $0.5 million of revenue for the year ended December 31, 2013. There is no deferred revenue related to this agreement at December 31, 2015.

Merck Sharp & Dohme Corp.

In July 2013, we entered into a License 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. We also provided Merck with contingent options to take additional non‑exclusive commercial licenses. The contingent options provide Merck an opportunity to take non‑exclusive commercial licenses at an amount less than the amount paid for the original license. The 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 the first quarter of 2014, Merck initiated a Phase 1 clinical trial which triggered a $0.5 million milestone payment to us. For the years ended December 31, 2015, 2014 and 2013 total revenue recognized was $0.1 million, $0.6 million and $1.0 million, respectively. As of December 31, 2015, we had deferred revenue of $55,000 related to this agreement.

Potential Milestones

As of December 31, 2015, the Company may be eligible to receive the following maximum payments from its collaborative partners and licensees based upon contractual terms in the agreements assuming all options are exercised and all milestones are achieved:


	Potential Milestones (in millions)
							Total
Partner	Development-based		Regulatory-based		Sales-based		Milestones
Alexion (1)	$	51.0	$	168.0	$	180.0	$	399.0
Amgen		232.5		345.0		1,080.0		1,657.5
BI		9.0		6.0		12.0		27.0
CSL 2009 (1)		6.0		4.0		5.0		15.0
Janssen (1)		6.0		—		4.0		10.0
Merck (1)		3.5		6.0		—		9.5
MorphoSys (1)		62.0		187.0		50.0		299.0
Novo Nordisk (2)		36.3		51.0		80.0		167.3
Total	$	406.3	$	767.0	$	1,411.0	$	2,584.3

(1)

The payments are solely dependent upon activities of the collaborative partner or licensee.

(2)

Xencor provides research services under the agreement with Novo Nordisk

Revenue earned

The $27.8 million, $9.5 million and $10.2 million of revenue recorded for the years ended December 31, 2015, 2014 and 2013, respectively was earned principally from the following licensees (in millions):


	Year Ended
	December 31,
	2015		2014		2013
Amgen	$	13.8	$	6.9	$	2.2
Alexion		8.5		1.0		0.9
Novo Nordisk		2.9		—		—
CSL		2.5		0.7		2.9
MorphoSys		—		—		3.0
Merck		0.1		0.6		1.0
Other		—		0.3		0.2
Total	$	27.8	$	9.5	$	10.2

A substantial portion of our revenue is earned from collaboration partners outside the United States. Non‑U.S. revenue is denominated in U.S. dollars. A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2015, 2014 and 2013 is as follows (in millions):


	Year Ended
	December 31,
	2015		2014		2013
U.S. Revenue	$	22.4	$	8.6	$	4.2
Non-U.S. Revenue		5.4		0.9		6.0
Total	$	27.8	$	9.5	$	10.2

Deferred Revenue

Deferred revenue arises from payments received in advance of the culmination of the earnings process. We have classified deferred revenue for which we are expected to perform within the next 12 months as a current liability. We recognize deferred revenue as revenue in future periods when the applicable revenue recognition criteria have been met. The total amounts reported as deferred revenue were $33.8 million and $4.6 million at December 31, 2015 and 2014, respectively.

Research and Development Expenses

Research and development expenses include costs we incur for our own and for our collaborators research and development activities. Research and development costs are expensed as incurred. These costs consist primarily of salaries and benefits, including associated stock‑based compensation, laboratory supplies, facility costs, and applicable overhead expenses of personnel directly involved in the research and development of new technology and products, as well as fees paid to other entities that conduct certain research development activities on our behalf. We estimate preclinical study and clinical trial expenses based on the services performed pursuant to the contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on our behalf based on the actual time and expenses incurred by them. Further, we accrue expenses related to clinical trials based on the level of patient enrollment and activity according to the related agreement. We monitor patient enrollment levels and related activity to the extent reasonably possible and adjust estimates accordingly.

We capitalize acquired research and development technology licenses and third‑party contract rights and amortize the costs over the shorter of the license term or the expected useful life. We review the license arrangements and the amortization period on a regular basis and adjust the carrying value or the amortization period of the licensed rights if there is evidence of a change in the carrying value or useful life of the asset.

Cash and Cash Equivalents

We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase.

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”, as defined by authoritative guidance issued by the FASB. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive 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.

Concentrations of Risk

Cash, cash equivalents and marketable securities are financial instruments that potentially subject the Company to concentrations of risk. Xencor invests its cash in corporate debt securities and U.S. sponsored agencies with strong credit ratings. Xencor has established guidelines relative to diversification and maturities that are designed to help ensure safety and liquidity. These guidelines are periodically reviewed to take advantage of trends in yields and interest rates.

Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits at December 31, 2015 and 2014 approximated $12.1 million and $54.0 million, respectively.

We have payables with three service providers that represent 55% of our total payables and one service provider that represented 47% of our total payables for the years ended December 31, 2015 and 2014, respectively. We rely on two critical suppliers for the manufacture of our drug product for use in our clinical trials. While we believe that there are alternative vendors available, a change in manufacturing vendors could cause a delay in the availability of drug product and result in a delay of conducting and completing our clinical trials. No other vendor accounted for more than 10.0% of total payables at December 31, 2015 or 2014.

Fair Value of Financial Instruments

Our financial instruments primarily consist of cash and cash equivalents, marketable securities, trade 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 approximate their fair value due to their short 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):


	December 31, 2015
	Total
	Fair Value		Level 1		Level 2

Money Market Funds in Cash and Cash Equivalents	$	9,453	$	9,453	$	—
Corporate Securities		114,846		—		114,846
Government Securities		65,885		—		65,885
	$	190,184	$	9,453	$	180,731

	December 31, 2014
	Total
	Fair Value		Level 1		Level 2

Money Market Funds in Cash and Cash Equivalents	$	54,429	$	54,429	$	—
Corporate Securities		—		—		—
Government Securities		—		—		—
	$	54,429	$	54,429	$	—

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight‑line method over the estimated useful lives of the assets, ranging from three to seven years, or the lease term, whichever is shorter. Expenditures for repairs and maintenance are charged to expense as incurred while renewals and improvements are capitalized. Useful lives by asset category are as follows:



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets

The cost of acquiring licenses is capitalized and amortized on the straight‑ line basis over the shorter of the term of the license or its estimated economic life, ranging from five to 25 years. Third‑party costs incurred for acquiring patents are capitalized. Capitalized costs are accumulated until the earlier of the period that a patent is issued or we abandon the patent claims. Cumulative capitalized patent costs are amortized on a straight‑line basis from the date of issuance over the shorter of the patent term or the estimated useful economic life of the patent, ranging from 13 to 20 years. Our senior management, with advice from outside patent counsel, assesses three primary criteria to determine if a patent will be capitalized initially: i) technical feasibility, ii) magnitude and scope of new technical function covered by the patent compared to the company’s existing technology and patent portfolio, particularly assessing the value added to our product candidates or licensing business, and iii) legal issues, primarily assessment of patentability and prosecution cost. We review our intellectual property on a regular basis to determine if there are changes in the estimated useful life of issued patents and if any capitalized costs for unissued patents should be abandoned. Capitalized patent costs related to abandoned patent filings are charged off in the period of the decision to abandon. During 2015, 2014 and 2013, we abandoned previously capitalized patent and licensing related charges of $296,000, $509,000 and $205,000, respectively.

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2015		2014
Patents, definite life	$	6,488	$	5,720
Patents, pending issuance		4,051		3,654
Licenses and other amortizable intangible assets		2,072		1,797
Nonamortizable intangible assets (trademarks)		399		400
Total gross carrying amount		13,010		11,571
Accumulated amortization—patents		(2,214)		(1,776)
Accumulated amortization—licenses and other		(825)		(679)
Total intangible assets, net	$	9,971	$	9,116

Amortization expense for patents, licenses, and other intangible assets was $594,000, $694,000 and $598,000 for the years ended December 31, 2015, 2014 and 2013, respectively.

Future amortization expense for patents, licenses, and other intangible assets recorded as of December 31, 2015, and for which amortization has commenced, is as follows:


	Year ended
	December 31,
	(in thousands)
2016	$	636
2017		639
2018		628
2019		616
2020		609
Thereafter		2,393
Total	$	5,521

The above amortization expense forecast is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets, and other events. As of December 31, 2015, the Company has $4.1 million of intangible assets which are in‑process and have not been placed in service and, accordingly amortization on these assets has not commenced.

Long‑Lived Assets

Management reviews long‑lived assets which include fixed assets and amortizable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value for our long‑lived assets is determined using the expected cash flows discounted at a rate commensurate with the risks involved.

We did not recognize a loss from impairment for the years ended December 31, 2015, 2014 or, 2013.

Income Taxes

We account for income taxes in accordance with accounting guidance which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is a 50% or less likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. We did not have any uncertain tax positions at December 31, 2015 or 2014.

Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense.

Stock‑Based Compensation

We recognize compensation expense using a fair‑value‑based method for costs related to all share‑based payments, including stock options and shares issued under our Employee Stock Purchase Plan (ESPP). Stock‑based compensation cost related to employees and directors is measured at the grant date, based on the fair‑value—based measurement of the award using the Black‑Scholes method, and is recognized as expense over the requisite service period on a straight‑line basis. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data and industry published statistics to estimate pre‑vesting option forfeitures and record stock‑based compensation expense only for those awards that are expected to vest. We recorded stock‑based compensation and expense for stock‑based awards to employees, directors and consultants of approximately $4.9 million, $1.8 million and $198,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Included in the 2015 and 2014 total compensation expense is $341,000 and $172,000, relating to our ESPP, respectively.

Options granted to individual service providers that are not employees or directors are accounted for at estimated fair value using the Black‑Scholes option‑pricing method and are subject to periodic re‑measurement over the period during which the services are rendered.

Net Loss Per Share

Basic net loss per common share is computed by dividing the net loss by the weighted‑average number of common shares outstanding during the period. Potentially dilutive securities consisting of stock options at December 31, 2015, 2014 and 2013, and stock purchases under the Employee Stock Purchase Plan were not included in the diluted net loss per common shares calculation because the inclusion of such shares would have had an antidilutive effect.


	Year Ended
	December 31,
	2015	2014	2013
	(in thousands)
Options to purchase common stock	1,281	2,827	1,794
Employee stock purchase plan shares	75	25	—
Total	1,356	2,852	1,794

The loss for the period ended December 31, 2013 was adjusted, for purposes of the diluted net income per share calculation, to reflect the deemed contribution of $144.8 million. This reflects a deemed contribution of $148.1 million from the exchange of convertible preferred stock, offset by a deemed dividend of $1.0 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which shares were sold in June 2013, and an additional deemed dividend of $2.3 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which additional shares were sold in the subsequent Series A‑1 closing in September 2013.

For 2013, the diluted loss per share calculation assumes the conversion of outstanding shares of convertible preferred stock into common stock using the as‑if converted method.


	Year Ended December 31,
	2015			2014		2013
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(17,592)	$	(16,422)	$	(60,259)
Deemed contribution			—		—		144,765
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$		(17,592)	$	(16,422)	$	84,506
Denominator:
Weighted-average common shares outstanding		39,015,131			31,390,631		2,472,581
Basic net income (loss) per common share	$		(0.45)	$	(0.52)	$	34.18
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$		(17,592)	$	(16,422)	$	84,506
Deemed contribution			—		—		(144,765)
Net loss attributable to common stockholders for diluted net loss per share	$		(17,592)	$	(16,422)	$	(60,259)
Denominator:
Weighted average number of common shares outstanding used in computing basic net loss per common share		39,015,131			31,390,631		2,472,581
Dilutive effect of conversion of convertible preferred stock			—		—		13,173,208
Weighted-average number of common shares outstanding used in computing net loss per common share		39,015,131			31,390,631		15,645,789
Diluted net loss per common share	$		(0.45)	$	(0.52)	$	(3.85)

Segment Reporting

The Company determines its segment reporting based upon the way the business is organized for making operating decisions and assessing performance. The Company has only one operating segment related to the development of pharmaceutical products.

Comprehensive Loss	12 Months Ended
Comprehensive Loss	Dec. 31, 2015
Comprehensive Loss
Comprehensive Loss	2. Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive loss. For the year ended December 31, 2015, the only component of other comprehensive loss is net unrealized losses on marketable securities. There were no material reclassifications out of accumulated other comprehensive loss during year the ended December 31, 2015.

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e689-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=36458714&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e640-108580

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e716-108580

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e709-108580

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e637-108580

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=36458714&loc=d3e681-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

Marketable Securities

12 Months Ended

Dec. 31, 2015

Marketable Securities

Marketable Securities

3. Marketable Securities

The Company’s marketable securities held as of December 31, 2015 are summarized below:


			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	9,453	$	—	$	—	$	9,453
Corporate Securities		115,148		6		(308)		114,846
Government Securities		66,099		—		(214)		65,885
	$	190,700	$	6	$	(522)	$	190,184

Reported as
Cash and cash equivalents							$	9,453
Marketable securities								180,731
Total investments							$	190,184

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


	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Mature in one year or less	$	83,963	$	83,840
Mature after one year through five years		97,284		96,891
	$	181,247	$	180,731

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

Convertible Notes Payable	12 Months Ended
Convertible Notes Payable	Dec. 31, 2015
Convertible Notes Payable
Convertible Notes Payable	4. Convertible Notes Payable In 2009 and 2010, we issued $15.2 million of convertible promissory notes (Notes) to existing preferred stockholders. The 2009 and 2010 Notes had an interest rate of 10.0% per annum and both had original maturity dates of one year or less. The Notes were subsequently extended several times and were also amended to increase the interest rate on the notes from 10% to 12.5%. Each such extension of each note was considered to be a modification of debt under ASC 470‑50‑40. In June 2013, and prior to the maturity dates of the Notes, our Board of Directors and the requisite stockholders and holders of the 2009 Notes and 2010 Notes agreed to exchange the outstanding principal into shares of our Series A‑1 convertible preferred stock in connection with a concurrent financing . The exchange of the 2009 Notes and 2010 Notes was not pursuant to the terms of the applicable notes so we accounted for the exchange as an extinguishment of the original debt instrument.

Property and Equipment

12 Months Ended

Dec. 31, 2015

Property and Equipment

Property and Equipment

7. Property and Equipment

Property and equipment consist of the following:


	December 31,
	2015		2014
	(In thousands)
Computers, software and equipment	$	5,338	$	4,270
Furniture and fixtures		102		97
Leasehold and tenant improvements		3,754		3,086
		9,194		7,453
Less accumulated depreciation and amortization		(6,884)		(6,554)
	$	2,310	$	899

Depreciation expense in 2015, 2014 and 2013 was $519,000, $188,000 and $113,000, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2015

Income Taxes

Income Taxes

8. Income Taxes

Our effective tax rate differs from the statutory federal income tax rate, primarily as a result of the changes in valuation allowance. For the years ended December 31, 2015, 2014 and 2013 there was no current provision for federal or state income taxes due to taxable losses subject to a valuation allowance incurred in each of the years.

A reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows (in thousands):


	Year Ended
	December 31,
	2015		2014		2013
Federal statutory income tax rate	$	(6,157)	$	(5,583)	$	(20,488)
Loss on settlement of notes		—		—		18,884
Non-deductible research and development credit		708		435		—
Stock based compensation		651		478		—
Other		14		2		4
Net change in valuation allowance		4,784		4,668		1,600
Net effective tax rate	$	—	$	—	$	—

The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities at December 31, 2015 and 2014 is presented below (in thousands):


	2015		2014
Deferred income tax assets
Net operating loss carryforwards	$	69,348	$	47,401
Research credits		8,096		12,789
Depreciation		735		790
Unrealized loss on securities		206		—
Accrued compensation		511		373
Deferred revenue		1,032		1,836
Gross deferred income tax assets		79,928		63,189
Valuation allowance		(76,036)		(59,602)
Net deferred income tax assets		3,892		3,587
Deferred income tax liabilities
Patent costs		(3,489)		(3,199)
Licensing costs		(339)		(317)
Capitalized legal costs		(64)		(71)
Gross deferred income tax liabilities		(3,892)		(3,587)
Net deferred income tax asset/(liability)	$	—	$	—

Due to the uncertainty surrounding the realization of the benefits of our deferred tax assets in future tax periods, we have placed a valuation allowance against our deferred tax assets. The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s net deferred income tax asset is not more likely than not to be realized due to the lack of sufficient sources of future taxable income and cumulative book losses that have resulted over the years. During the year ended December 31, 2014, the valuation allowance decreased by $21.4 million. Upon analysis, there were changes in ownership under Section 382 of the Internal Revenue Code and related state provisions as a result of our sale of preferred stock and sale of common stock during 2013. Section 382 limits the amount of net operating losses and tax credit forwards that may be available after a change in ownership. The Company has adjusted its net operating loss and tax credit carryforwards to reflect the impact of the section 382 limitations. The Company’s tax returns remain open to potential inspection for the years 2011 and onwards for federal purposes and 2010 and onwards for state purposes.

As of December 31, 2015, we had cumulative net operating loss carryforwards for federal and state income tax purposes of $181.4 million and $127.7 million respectively, and available tax credit carryforwards of approximately $3.9 million for federal income tax purposes and $4.2 million for state income tax purposes, which can be carried forward to offset future taxable income, if any.

Our federal net operating loss carryforwards expire starting in 2018, state net operating losses expire starting in 2016 and federal tax credit carryforwards expire starting in 2019. Utilization of the net operating losses and tax credits are subject to a substantial annual limitation due to ownership changes which occurred. As a result of these changes, provisions in the Internal Revenue Code of 1986 under Section 382 and similar state provisions may result in the expiration of certain of our net operating losses and tax credits before we could use them.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2015

Stock-Based Compensation

Stock-Based Compensation

9. 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 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 Prior Plans 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 December 31, 2015, the total number of shares of common stock available for issuance under the 2013 Plan was 6,326,415, which includes 2,684,456 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 by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. On January 1, 2015, the total number of shares of common stock available for issuance under the 2013 Plan was automatically increased by 1,257,371 shares, which number is included in the number of shares available for issuance above. As of December 31, 2015 a total of 2,004,750 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. Under the ESPP our employees may elect to have between 1-15% of their compensation withheld to purchase Company stock at a discount. The ESPP had an initial two-year term that includes four six-month purchase periods and employee withholding amounts may be used to purchase Company stock during each six-month purchase period. The initial two-year term ended in December 2015 and pursuant to the provisions of the ESPP, the second two-year term began automatically upon the end of the initial term. The total number of shares that can be purchased with the withholding amounts are based on the lower of 85% of the Company’s stock price at the initial offering date or, 85% of the Company’s stock price at each purchase date. 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 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. On January 1, 2014, the total number of shares of common stock available for issuance under the ESPP was automatically increased by 313,545 shares, which number is included in the number of shares reserved for issuance above. Pursuant to approval by our board, there was no increase in the number of authorized shares in the ESPP in 2015. As of December 31, 2015, we have issued a total of 176,363 shares of common stock under the ESPP.

Information with respect to stock options outstanding is as follows:


	December 31,
	2015		2014		2013
Exercisable options		1,600,351		1,393,729		1,203,885
Weighted average exercise price per share of exercisable options	$	3.99	$	1.01	$	0.59
Weighted average grant date fair value per share of options granted during the year	$	10.66	$	7.39	$	3.78
Options available for future grants		2,917,182		2,583,186		2,403,368
Weighted average remaining contractual life		6.98		6.43		5.72

The following table summarizes stock option activity for the years ended December 31, 2015 and 2014:


				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual	Aggregate
	Number of	Price		Term	Intrinsic Value
	Shares	(Per Share)(1)		(in years)	(in thousands)(2)
Balances at December 31, 2013	1,794,214	$	1.66	5.72
Options granted	1,049,521		10.99
Options forfeited	(1,000)		10.31
Options exercised(3)	(15,941)		0.59
Balances at December 31, 2014	2,826,794		5.12	6.43	$	30,863
Options granted	940,250		15.94
Options forfeited	(9,375)		18.75
Options expired	(7,500)		11.46
Options exercised(3)	(379,268)		1.46
Balances at December 31, 2015	3,370,901	$	8.50	6.98	$	21,854
As of December 31, 2015
Options vested and expected to vest	3,064,829	$	8.09	6.81	$	21,048
Exercisable	1,600,351	$	3.99	5.10	$	17,016

(1)

The weighted average exercise price per share is determined using exercise price per share for stock options.

(2)

The aggregate intrinsic value is calculated as the difference between the exercise price of the option and the fair value of our common stock for in‑ the‑money options at December 31, 2015 and 2014.

(3)

The total intrinsic value of stock options exercised was $5.4 million, $155,000 and $191,000 for the years ended December 31, 2015, 2014 and 2013 respectively. The stock options outstanding and exercisable by exercise price at December 31, 2015 are as follows:


Stock Options Outstanding					Stock Options Exercisable
		Weighted-
		Average
		Remaining	Weighted-			Weighted-
Range of		Contractual	Average			Average
Exercise	Number of	Term	Exercise Price		Number of	Exercise Price
Prices	Shares	(in years)	Per Share		Shares	Per Share
$0.59 - $4.25	1,413,261	4.60	$	1.87	1,163,519	$	1.38
$5.50 - $8.56	50,000	7.59	$	7.64	20,808	$	7.09
$9.26 – $14.38	1,026,140	8.33	$	11.2	415,899	$	11.11
$14.54 – $22.35	881,500	9.18	$	16.0	125	$	16.52
	3,370,901	6.98	$	8.50	1,600,351	$	3.99

We estimated the fair value of employee and non‑employee awards using the Black‑Scholes valuation model. The fair value of employee stock options is being amortized on a straight‑line basis over the requisite service period of the awards. Management estimates the probability of non‑employee awards being vested based upon an evaluation of the non‑employee achieving their specific performance goals.

Options granted after our Initial Public Offering, are issued at the fair market value of our stock at the date the grant is approved by our board of directors.

The fair value of employee stock options was estimated using the following weighted average assumptions for the years ended December 31, 2015, 2014 and 2013:


	Options
	2015		2014		2013
Common stock fair value per share	$	11.82 - 22.35	$	8.56 - 16.52	$	5.50
Expected volatility		69.17% - 86.46%		77.4%		86.7%
Risk-free interest rate		1.44% - 1.84%		1.67% - 1.96%		0.9% – 2.1%
Expected dividend yield		—		—		—
Expected term (in years)		5.23 - 6.08		6.0		6.0


	ESPP
	2015	2014	2013
Expected term (years)	0.5 - 2.0	0.5 - 2.0	—
Expected volatility	67.8% - 82.9%	70.6% - 71.8%	—
Risk-free interest rate	.07% - .93%	.06% - .46%	—
Expected dividend yield	—	—	—

Total employee, director and non‑employee stock‑based compensation expense recognized was as follows:


	Year Ended
	December 31,
(In thousands)	2015		2014		2013
General and administrative	$	2,218	$	848	$	40
Research and development		2,650		1,013		158
	$	4,869	$	1,861	$	198

The expected term of stock options represents the average period the stock options are expected to remain outstanding. The expected stock price volatility for our stock options for the years ended December 31, 2015, 2014 and 2013 was determined by examining the historical volatilities for industry peers and adjusting for differences in our life cycle and financing leverage. Industry peers consist of several public companies in the biopharmaceutical industry.

We determined the average expected life of stock options based on the simplified method because our common stock has not been publicly traded for an extended period and we do not have a track record of establishing the volatility.

The risk‑free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of our stock options.

The expected dividend assumption is based on our history and expectation of dividend payouts.

As of December 31, 2015 and 2014, the unamortized compensation expense related to unvested stock options was $10.8 million and $7.6 million, respectively. The remaining unamortized compensation expense will be recognized over the next 2.74 years. At December 31, 2015 and 2014, the unamortized compensation expense was $395,000 and $204,000 respectively under our ESPP.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

Operating leases

The Company leases office and laboratory space in Monrovia, CA. In January 2015, we entered into a new lease agreement for the property. The new lease replaces the previous lease and extends our lease term to June 2020 with an option to renew for an additional five years. The new lease is a non-cancelable operating lease.

The Company also leases office space in San Diego, CA. In February 2015, we entered into an amended lease agreement for the San Diego property. The amended lease replaces the previous lease and provides for additional space in a building located in the same multi-building development. The amended lease expires in April 2018 and includes an option to renew for a period of one year. At December 31, 2015 the future minimum lease payments under the operationg leases were as follows:



	Operating
Years ending December 31,	Leases
2016	$	679
2017		699
2018		602
2019		581
2020		299

Net rent expense for the years ended December 31, 2015, 2014 and 2013 was $558,000, $597,000 and $547,000 respectively. In March 2016, the Company signed a lease for additional space in San Diego.

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.

On March 3, 2015, a verified class action complaint, captioned DePinto v. John S. Stafford, et al., C.A. No. 10742, was filed in the Court of Chancery of the State of Delaware against certain of the Company's current and former directors alleging cause of action for Breach of Fiduciary Duty and Invalidity of Director and Stockholder Consents. In general, the complaint alleged that the plaintiff and the class he seeks to represent were shareholders of the Company during the recapitalization and certain related transactions that the Company underwent in 2013 and that the defendants breached their fiduciary duties in the course of approving that series of transactions. It also challenged as invalid certain corporate acts taken in the 2013 time period. On June 10, 2015, the Company filed a Verified Petition for Relief under Del. C. Section 205 (the 205 Petition) related to the corporate acts challenged in the complaint. The defendants filed an answer to the class action complaint on June 22, 2015. On July 9, 2015, the Court consolidated the 205 Petition with the class action, joined the Company as a defendant and ordered it to file the claims in the 205 Petition as counter-claims in the class action, which the Company has done.

On August 11, 2015, the Company filed a Motion for leave to File an Amended Counter-Claim, along with the proposed Amended Counter-Claim and related documents. On October 5, 2015, the parties filed a Stipulation of Partial Settlement and related documents disclosing a settlement of the invalidity claims addressed in the complaint, the counter-claim and the proposed amended counter-claim including a request by plaintiff's counsel for reimbursement of legal fees up to $950,000. On October 7, 2015, we filed the Amended Counter-Claim and the related documents. On December 14, 2015, the Court entered an Order and Partial Final Judgment approving the settlement of the invalidity claims, validating each corporate act challenged in the complaint, dismissing with prejudice Count II of the complaint (the invalidity claims) and granting plaintiff’s counsel a fee award. We have paid the plaintiff’s legal award cost of $950,000 net of insurance proceeds of $187,500 which has been reflected as a charge in our 2015 operations.

Based on the nature of the remaining claim, the Company believes that it is not possible to estimate the likelihood of loss or a range of potential loss related to the claim; accordingly, no additional amount for any loss has been accrued at December 31, 2015.

Guarantees

In the normal course of business, we indemnify certain employees and other parties, such as collaboration partners and other parties that perform certain work on behalf of, or for the Company or take licenses to our technologies. We have agreed to hold these parties harmless against losses arising from our breach of representations or covenants, intellectual property infringement or other claims made against these parties in performance of their work with us.

These agreements typically limit the time within which the party may seek indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential amount of liability under these indemnification agreements since we have not had any prior indemnification claims on which to base the calculation. Further, each potential claim would be based on the unique facts and circumstances of the claim and the particular provisions of each agreement. We are not aware of any potential claims and did not record a liability as of December 31, 2015 and 2014.

401(k) Plan	12 Months Ended
401(k) Plan	Dec. 31, 2015
401(k) Plan
401(k) Plan	11. 401(k) Plan We have a 401(k) plan covering all full‑time employees. Employees may make pre‑tax contributions up to the maximum allowable by the Internal Revenue Code. Participants are immediately vested in their employee contributions and employer discretionary contributions, if any. No employer contributions were made for the years ended December 31, 2015, 2014 or 2013.

Related Parties	12 Months Ended
Related Parties	Dec. 31, 2015
Related Parties
Related Parties	12. Related Parties On September 4, 2013, our Board of Directors authorized the forgiveness of the outstanding principal and interest of approximately $166,000, under the promissory note from our Chief Executive Officer, effective and contingent upon the filing of a registration statement on Form S‑1 for our initial public offering with the U.S. Securities and Exchange Commission.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

Convertible Promissory Notes and Conversion of Convertible Preferred Stock

12 Months Ended

Dec. 31, 2015

Conversion of Convertible Promissory Notes and Preferred Stock

Conversion of Convertible Promissory Notes and Preferred Stock

13. Conversion of Convertible Promissory Notes and Preferred Stock

In June 2013, our Board of Directors and the requisite holders of the 2009 and 2010 Notes and requisite preferred stockholders agreed to a series of transactions as follows:

an exchange of the outstanding principal due on the 2009 Notes and 2010 Notes for shares of Series A‑1 convertible preferred stock and cancellation of the accrued and unpaid interest thereon, pursuant to a Note Conversion Agreement;

an exchange of the current outstanding shares of Preferred Series A—E for Series A‑1 convertible preferred stock pursuant to the operation of provisions in our amended and restated certificate of incorporation;

the sale of an additional $10.0 million in Series A‑1 convertible preferred stock to existing stockholders; and

the conversion of certain shares of Series A‑1 convertible preferred stock into shares of Series A‑2 convertible preferred stock at a conversion rate of 1 for 3, pursuant to a mandatory conversion provision (e.g. a “pay to play” provision) in our amended and restated certificate of incorporation.

Under the terms of the Note Conversion Agreement, the total outstanding principal due on the Notes as of June 13, 2013 was exchanged for 45,902,321 shares of Series A‑1 convertible preferred stock, 5,303,597 of which were subsequently converted into 1,766,097 shares of Series A‑2 convertible preferred stock. We determined that the per share fair value of the shares of Series A‑1 convertible preferred stock issued was $1.54 and the total fair value of the issued shares under the Note Conversion Agreement was $70.7 million and we recognized a loss on the exchange of $48.6 million for the difference in the fair value of the shares of Series A‑1 convertible preferred stock and the carrying value of the Notes as of June 13, 2013.

The $48.6 million loss is reported on our Statement of Operation as a Loss on Settlement of Notes as an Other Expense for the year ended December 31, 2013. Associated transaction costs of $41,000 related to the exchange were expensed.

After the exchange of the Notes, the outstanding shares of Preferred Series A—E were exchanged for 1,977,137 shares of Series A‑1 convertible preferred stock, 257,409 of which were subsequently converted into 85,717 shares of Series A‑2 convertible preferred stock. We determined the fair value of the shares of Series A‑1 convertible preferred stock issued to be $3.0 million and we recorded a deemed contribution to equity of $140.6 million equal to the difference in the fair value of the shares issued and the carrying value of the existing shares of Preferred Series A—E. We record issuance costs related to our preferred stock sales as a reduction to paid‑in capital at the time the preferred securities are issued and reflect the carrying value of the preferred stock at the aggregate issuance price. We record these issuances as a non‑cash equity distribution at the date of redemption. The deemed contribution has been adjusted to reflect $3.0 million of original issuance costs of the Preferred Series A—E.

We determined that the value of the Series A‑2 convertible preferred stock to be $0.58 per share. A total of 1,851,814 shares of Series A‑2 convertible preferred stock with a fair value of $1.1 million were issued in exchange for 5,561,006 shares of Series A‑1 convertible preferred stock with the fair value of $8.6 million. We recognized a deemed contribution of $7.5 million for the difference in the fair value of the shares of Series A‑2 convertible preferred stock issued in exchange for the shares of Series A‑1 convertible preferred stock.

On June 26, 2013 we sold 5,586,510 shares of additional Series A‑1 convertible preferred stock to existing stockholders at a purchase price of $1.36 per share for aggregate proceeds of $7.6 million. We determined that the fair value of the shares sold in June 2013 to be $8.6 million and we recorded a deemed dividend of $1.0 million for the difference in the sales price of the Series A‑1 convertible preferred stock and the fair value of the shares. The $40,000 of transaction costs related to the sale was recorded against Additional Paid in Capital.

We determined that the fair value of the Series A‑1 and Series A‑2 convertible preferred stock as of June 26, 2013 was $1.54 and $0.58, respectively. We used the probability‑weighted expected return method (PWERM) to determine the fair value of the shares of the Series A‑1 and A‑2 convertible preferred stock. PWERM is a scenario‑based analysis that estimates the value per share based on the probability‑weighted present value of expected future investment returns, considering each of the possible outcomes available to us, as well as the economic and control rights of each share class.

On September 23, 2013 we sold 1,766,430 additional shares of Series A‑1 convertible preferred stock for gross proceeds of $2.4 million at a purchase price of $1.36 per share. We determined the fair value of the shares of Series A‑1 convertible preferred stock sold to be $4.7 million, based on a per share fair value of $2.69, determined by estimating the enterprise value of the Company based on a projected offering price in an initial public offering, and we recorded a deemed dividend of $2.3 million for the difference in the sales price of the Series A‑1 convertible preferred stock and the fair value of the shares. Transaction costs of $34,000 related to the sale were recorded against Additional Paid in Capital.

Condensed Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2015

Condensed Quarterly Financial Data (unaudited)

Condensed Quarterly Financial Data (unaudited)

14. Condensed Quarterly Financial Data (unaudited)

The following table contains selected unaudited financial data for each quarter of 2015 and 2014. The unaudited information should be read in conjunction with the Company’s financial statements and related notes included elsewhere in this report. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.

Quarterly Financial Data (in thousands, except per share data):


	2015 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Total revenue	$	1,491	$	1,014	$	3,503	$	21,754
Income (loss) from operations		(6,478)		(8,986)		(10,312)		7,438
Net income (loss)		(6,444)		(8,868)		(10,037)		7,757
Basic net income (loss) per common share		(0.19)		(0.22)		(0.25)		0.19
Diluted net income (loss) per common share	$	(0.19)	$	(0.22)	$	(0.25)	$	0.19


	2014 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Total revenue	$	2,184	$	824	$	848	$	5,664
Loss from operations		(3,767)		(5,053)		(6,287)		(1,350)
Net loss		(3,751)		(5,044)		(6,278)		(1,349)
Basic net loss per common share		(0.12)		(0.16)		(0.20)		(0.04)
Diluted net loss per common share	$	(0.12)	$	(0.16)	$	(0.20)	$	(0.04)

Summary of Significant Accounting Policies (Polices)

12 Months Ended

Dec. 31, 2015

Summary of Significant Accounting Policies

Basis of Presentation

Reverse Stock Split and Conversion of Preferred Stock

Use of Estimates

Recent Accounting Pronouncements

Revenue Recognition

Collaborative Research and Licensing Agreements

Amgen Inc.

2015 Agreement

The total allocable consideration of $45 million was allocated to the deliverables based on the relative selling price method as follows:

$13.75 million to the CD38 Program and,

$6.25 million to each of the five Discovery Programs

2010 Agreement

We received a nonrefundable upfront payment of $11million upon execution of the Collaboration Agreement and a $2 million milestone in January 2013 upon the initiation of a Phase 1b clinical trial.

Novo Nordisk A/S

MorphoSys Ag

Alexion Pharmaceuticals, Inc.

Boehringer Ingelheim International GmbH

Janssen, Research & Development, LLC

CSL Limited

2009 Agreement

2013 Agreement

Merck Sharp & Dohme Corp.

Potential Milestones


	Potential Milestones (in millions)
							Total
Partner	Development-based		Regulatory-based		Sales-based		Milestones
Alexion (1)	$	51.0	$	168.0	$	180.0	$	399.0
Amgen		232.5		345.0		1,080.0		1,657.5
BI		9.0		6.0		12.0		27.0
CSL 2009 (1)		6.0		4.0		5.0		15.0
Janssen (1)		6.0		—		4.0		10.0
Merck (1)		3.5		6.0		—		9.5
MorphoSys (1)		62.0		187.0		50.0		299.0
Novo Nordisk (2)		36.3		51.0		80.0		167.3
Total	$	406.3	$	767.0	$	1,411.0	$	2,584.3

(1)

The payments are solely dependent upon activities of the collaborative partner or licensee.

(2)

Xencor provides research services under the agreement with Novo Nordisk

Revenue earned


	Year Ended
	December 31,
	2015		2014		2013
Amgen	$	13.8	$	6.9	$	2.2
Alexion		8.5		1.0		0.9
Novo Nordisk		2.9		—		—
CSL		2.5		0.7		2.9
MorphoSys		—		—		3.0
Merck		0.1		0.6		1.0
Other		—		0.3		0.2
Total	$	27.8	$	9.5	$	10.2


	Year Ended
	December 31,
	2015		2014		2013
U.S. Revenue	$	22.4	$	8.6	$	4.2
Non-U.S. Revenue		5.4		0.9		6.0
Total	$	27.8	$	9.5	$	10.2

Deferred Revenue

Research and Development Expenses

Cash and Cash Equivalents

We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase.

Marketable Securities

Concnetrations of Risk

Concentrations of Risk

Fair Value of Financial Instruments

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


	December 31, 2015
	Total
	Fair Value		Level 1		Level 2

Money Market Funds in Cash and Cash Equivalents	$	9,453	$	9,453	$	—
Corporate Securities		114,846		—		114,846
Government Securities		65,885		—		65,885
	$	190,184	$	9,453	$	180,731

	December 31, 2014
	Total
	Fair Value		Level 1		Level 2

Money Market Funds in Cash and Cash Equivalents	$	54,429	$	54,429	$	—
Corporate Securities		—		—		—
Government Securities		—		—		—
	$	54,429	$	54,429	$	—

Property and Equipment



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Patents, Licenses, and Other Intangible Assets

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2015		2014
Patents, definite life	$	6,488	$	5,720
Patents, pending issuance		4,051		3,654
Licenses and other amortizable intangible assets		2,072		1,797
Nonamortizable intangible assets (trademarks)		399		400
Total gross carrying amount		13,010		11,571
Accumulated amortization—patents		(2,214)		(1,776)
Accumulated amortization—licenses and other		(825)		(679)
Total intangible assets, net	$	9,971	$	9,116

Amortization expense for patents, licenses, and other intangible assets was $594,000, $694,000 and $598,000 for the years ended December 31, 2015, 2014 and 2013, respectively.

Future amortization expense for patents, licenses, and other intangible assets recorded as of December 31, 2015, and for which amortization has commenced, is as follows:


	Year ended
	December 31,
	(in thousands)
2016	$	636
2017		639
2018		628
2019		616
2020		609
Thereafter		2,393
Total	$	5,521

Long-Lived Assets

Long‑Lived Assets

We did not recognize a loss from impairment for the years ended December 31, 2015, 2014 or, 2013.

Income Taxes

Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense.

Stock-Based Compensation

Stock‑Based Compensation

Net Loss Per Share


	Year Ended
	December 31,
	2015	2014	2013
	(in thousands)
Options to purchase common stock	1,281	2,827	1,794
Employee stock purchase plan shares	75	25	—
Total	1,356	2,852	1,794

For 2013, the diluted loss per share calculation assumes the conversion of outstanding shares of convertible preferred stock into common stock using the as‑if converted method.


	Year Ended December 31,
	2015			2014		2013
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(17,592)	$	(16,422)	$	(60,259)
Deemed contribution			—		—		144,765
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$		(17,592)	$	(16,422)	$	84,506
Denominator:
Weighted-average common shares outstanding		39,015,131			31,390,631		2,472,581
Basic net income (loss) per common share	$		(0.45)	$	(0.52)	$	34.18
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$		(17,592)	$	(16,422)	$	84,506
Deemed contribution			—		—		(144,765)
Net loss attributable to common stockholders for diluted net loss per share	$		(17,592)	$	(16,422)	$	(60,259)
Denominator:
Weighted average number of common shares outstanding used in computing basic net loss per common share		39,015,131			31,390,631		2,472,581
Dilutive effect of conversion of convertible preferred stock			—		—		13,173,208
Weighted-average number of common shares outstanding used in computing net loss per common share		39,015,131			31,390,631		15,645,789
Diluted net loss per common share	$		(0.45)	$	(0.52)	$	(3.85)

Segment Reporting

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Significant Accounting Policies

Schedule of receivables from maximum payments from collaborative partners and licensees


	Potential Milestones (in millions)
							Total
Partner	Development-based		Regulatory-based		Sales-based		Milestones
Alexion (1)	$	51.0	$	168.0	$	180.0	$	399.0
Amgen		232.5		345.0		1,080.0		1,657.5
BI		9.0		6.0		12.0		27.0
CSL 2009 (1)		6.0		4.0		5.0		15.0
Janssen (1)		6.0		—		4.0		10.0
Merck (1)		3.5		6.0		—		9.5
MorphoSys (1)		62.0		187.0		50.0		299.0
Novo Nordisk (2)		36.3		51.0		80.0		167.3
Total	$	406.3	$	767.0	$	1,411.0	$	2,584.3

(1)

The payments are solely dependent upon activities of the collaborative partner or licensee.

Xencor provides research services under the agreement with Novo Nordisk

Schedule of revenue by licensees


	Year Ended
	December 31,
	2015		2014		2013
Amgen	$	13.8	$	6.9	$	2.2
Alexion		8.5		1.0		0.9
Novo Nordisk		2.9		—		—
CSL		2.5		0.7		2.9
MorphoSys		—		—		3.0
Merck		0.1		0.6		1.0
Other		—		0.3		0.2
Total	$	27.8	$	9.5	$	10.2

Schedule of revenue from U.S. and Non U.S. sources

A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2015, 2014 and 2013 is as follows (in millions):


	Year Ended
	December 31,
	2015		2014		2013
U.S. Revenue	$	22.4	$	8.6	$	4.2
Non-U.S. Revenue		5.4		0.9		6.0
Total	$	27.8	$	9.5	$	10.2

Schedule of assets recorded at fair value


	December 31, 2015
	Total
	Fair Value		Level 1		Level 2

Money Market Funds in Cash and Cash Equivalents	$	9,453	$	9,453	$	—
Corporate Securities		114,846		—		114,846
Government Securities		65,885		—		65,885
	$	190,184	$	9,453	$	180,731

	December 31, 2014
	Total
	Fair Value		Level 1		Level 2

Money Market Funds in Cash and Cash Equivalents	$	54,429	$	54,429	$	—
Corporate Securities		—		—		—
Government Securities		—		—		—
	$	54,429	$	54,429	$	—

Schedule of useful lives by asset category



Computers, software and equipment		3 - 5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		5 - 7 years or remaining
		lease term, whichever is less

Schedule of carrying amount and accumulated amortization of patents, licenses, and other intangibles

The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands):


	December 31,
	2015		2014
Patents, definite life	$	6,488	$	5,720
Patents, pending issuance		4,051		3,654
Licenses and other amortizable intangible assets		2,072		1,797
Nonamortizable intangible assets (trademarks)		399		400
Total gross carrying amount		13,010		11,571
Accumulated amortization—patents		(2,214)		(1,776)
Accumulated amortization—licenses and other		(825)		(679)
Total intangible assets, net	$	9,971	$	9,116

Future amortization expense for patents, licenses, and other intangible assets


	Year ended
	December 31,
	(in thousands)
2016	$	636
2017		639
2018		628
2019		616
2020		609
Thereafter		2,393
Total	$	5,521

Schedule of potentially dilutive securites


	Year Ended
	December 31,
	2015	2014	2013
	(in thousands)
Options to purchase common stock	1,281	2,827	1,794
Employee stock purchase plan shares	75	25	—
Total	1,356	2,852	1,794

Schedule of basic and diluted net loss per common share


	Year Ended December 31,
	2015			2014		2013
	(in thousands, except
	per share data)
Basic
Numerator:
Net loss	$		(17,592)	$	(16,422)	$	(60,259)
Deemed contribution			—		—		144,765
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$		(17,592)	$	(16,422)	$	84,506
Denominator:
Weighted-average common shares outstanding		39,015,131			31,390,631		2,472,581
Basic net income (loss) per common share	$		(0.45)	$	(0.52)	$	34.18
Diluted:
Numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share	$		(17,592)	$	(16,422)	$	84,506
Deemed contribution			—		—		(144,765)
Net loss attributable to common stockholders for diluted net loss per share	$		(17,592)	$	(16,422)	$	(60,259)
Denominator:
Weighted average number of common shares outstanding used in computing basic net loss per common share		39,015,131			31,390,631		2,472,581
Dilutive effect of conversion of convertible preferred stock			—		—		13,173,208
Weighted-average number of common shares outstanding used in computing net loss per common share		39,015,131			31,390,631		15,645,789
Diluted net loss per common share	$		(0.45)	$	(0.52)	$	(3.85)

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2015

Marketable Securities

Schedule of marketable securities


			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	9,453	$	—	$	—	$	9,453
Corporate Securities		115,148		6		(308)		114,846
Government Securities		66,099		—		(214)		65,885
	$	190,700	$	6	$	(522)	$	190,184

Reported as
Cash and cash equivalents							$	9,453
Marketable securities								180,731
Total investments							$	190,184

Schedule of maturities of marketable securities


	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Mature in one year or less	$	83,963	$	83,840
Mature after one year through five years		97,284		96,891
	$	181,247	$	180,731

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2015

Property and Equipment

Schedule of property and equipment


	December 31,
	2015		2014
	(In thousands)
Computers, software and equipment	$	5,338	$	4,270
Furniture and fixtures		102		97
Leasehold and tenant improvements		3,754		3,086
		9,194		7,453
Less accumulated depreciation and amortization		(6,884)		(6,554)
	$	2,310	$	899

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Taxes

Reconciliation of the federal statutory income tax rate to our effective income tax rate


	Year Ended
	December 31,
	2015		2014		2013
Federal statutory income tax rate	$	(6,157)	$	(5,583)	$	(20,488)
Loss on settlement of notes		—		—		18,884
Non-deductible research and development credit		708		435		—
Stock based compensation		651		478		—
Other		14		2		4
Net change in valuation allowance		4,784		4,668		1,600
Net effective tax rate	$	—	$	—	$	—

Schedule of tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities


	2015		2014
Deferred income tax assets
Net operating loss carryforwards	$	69,348	$	47,401
Research credits		8,096		12,789
Depreciation		735		790
Unrealized loss on securities		206		—
Accrued compensation		511		373
Deferred revenue		1,032		1,836
Gross deferred income tax assets		79,928		63,189
Valuation allowance		(76,036)		(59,602)
Net deferred income tax assets		3,892		3,587
Deferred income tax liabilities
Patent costs		(3,489)		(3,199)
Licensing costs		(339)		(317)
Capitalized legal costs		(64)		(71)
Gross deferred income tax liabilities		(3,892)		(3,587)
Net deferred income tax asset/(liability)	$	—	$	—

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Stock-Based Compensation

Schedule of stock options outstanding


	December 31,
	2015		2014		2013
Exercisable options		1,600,351		1,393,729		1,203,885
Weighted average exercise price per share of exercisable options	$	3.99	$	1.01	$	0.59
Weighted average grant date fair value per share of options granted during the year	$	10.66	$	7.39	$	3.78
Options available for future grants		2,917,182		2,583,186		2,403,368
Weighted average remaining contractual life		6.98		6.43		5.72

Summary of stock option activity


				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual	Aggregate
	Number of	Price		Term	Intrinsic Value
	Shares	(Per Share)(1)		(in years)	(in thousands)(2)
Balances at December 31, 2013	1,794,214	$	1.66	5.72
Options granted	1,049,521		10.99
Options forfeited	(1,000)		10.31
Options exercised(3)	(15,941)		0.59
Balances at December 31, 2014	2,826,794		5.12	6.43	$	30,863
Options granted	940,250		15.94
Options forfeited	(9,375)		18.75
Options expired	(7,500)		11.46
Options exercised(3)	(379,268)		1.46
Balances at December 31, 2015	3,370,901	$	8.50	6.98	$	21,854
As of December 31, 2015
Options vested and expected to vest	3,064,829	$	8.09	6.81	$	21,048
Exercisable	1,600,351	$	3.99	5.10	$	17,016

Schedule of stock options outstanding and exercisable by exercise price


Stock Options Outstanding					Stock Options Exercisable
		Weighted-
		Average
		Remaining	Weighted-			Weighted-
Range of		Contractual	Average			Average
Exercise	Number of	Term	Exercise Price		Number of	Exercise Price
Prices	Shares	(in years)	Per Share		Shares	Per Share
$0.59 - $4.25	1,413,261	4.60	$	1.87	1,163,519	$	1.38
$5.50 - $8.56	50,000	7.59	$	7.64	20,808	$	7.09
$9.26 – $14.38	1,026,140	8.33	$	11.2	415,899	$	11.11
$14.54 – $22.35	881,500	9.18	$	16.0	125	$	16.52
	3,370,901	6.98	$	8.50	1,600,351	$	3.99

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


	Options
	2015		2014		2013
Common stock fair value per share	$	11.82 - 22.35	$	8.56 - 16.52	$	5.50
Expected volatility		69.17% - 86.46%		77.4%		86.7%
Risk-free interest rate		1.44% - 1.84%		1.67% - 1.96%		0.9% – 2.1%
Expected dividend yield		—		—		—
Expected term (in years)		5.23 - 6.08		6.0		6.0

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


	ESPP
	2015	2014	2013
Expected term (years)	0.5 - 2.0	0.5 - 2.0	—
Expected volatility	67.8% - 82.9%	70.6% - 71.8%	—
Risk-free interest rate	.07% - .93%	.06% - .46%	—
Expected dividend yield	—	—	—

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


	Year Ended
	December 31,
(In thousands)	2015		2014		2013
General and administrative	$	2,218	$	848	$	40
Research and development		2,650		1,013		158
	$	4,869	$	1,861	$	198

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies

Schedule of future minimum payments under the non-cancelable operating and capital leases

Operating leases



	Operating
Years ending December 31,	Leases
2016	$	679
2017		699
2018		602
2019		581
2020		299

Condensed Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Condensed Quarterly Financial Data (unaudited)

Schedule of Quarterly Financial Data


	2015 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Total revenue	$	1,491	$	1,014	$	3,503	$	21,754
Income (loss) from operations		(6,478)		(8,986)		(10,312)		7,438
Net income (loss)		(6,444)		(8,868)		(10,037)		7,757
Basic net income (loss) per common share		(0.19)		(0.22)		(0.25)		0.19
Diluted net income (loss) per common share	$	(0.19)	$	(0.22)	$	(0.25)	$	0.19


	2014 Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Total revenue	$	2,184	$	824	$	848	$	5,664
Loss from operations		(3,767)		(5,053)		(6,287)		(1,350)
Net loss		(3,751)		(5,044)		(6,278)		(1,349)
Basic net loss per common share		(0.12)		(0.16)		(0.20)		(0.04)
Diluted net loss per common share	$	(0.12)	$	(0.16)	$	(0.20)	$	(0.04)

Summary of Significant Accounting Policies - Stock (Details)			12 Months Ended
	Dec. 03, 2013 shares	Nov. 01, 2013	Dec. 31, 2013 shares	Jun. 26, 2013 shares
Conversion of Stock [Line Items]
Reverse stock split ratio		0.322
Series A-1 Convertible Preferred Stock
Conversion of Stock [Line Items]
Conversion of Stock, Shares Converted	49,671,392		(49,671,392)
Exchange of Series A-1 and A-2 preferred for common stock (in shares)	16,022,915			5,561,006
Series A-2 Convertible Preferred Stock
Conversion of Stock [Line Items]
Conversion of Stock, Shares Converted	1,851,814		(1,851,814)
Exchange of Series A-1 and A-2 preferred for common stock (in shares)	597,359			1,851,814

Summary of Significant Accounting Policies - Collaborative Research and Licensing Agreement (Details)	1 Months Ended										2 Months Ended	3 Months Ended								12 Months Ended
	Sep. 30, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Oct. 31, 2014 USD ($)	Feb. 28, 2014 item	Jul. 31, 2013 USD ($) item	May. 31, 2013 USD ($)	Mar. 31, 2013 USD ($) item	Jan. 31, 2013 USD ($) item	Dec. 31, 2010 USD ($)	Jun. 30, 2010 USD ($)	May. 31, 2013 USD ($) item	Dec. 31, 2015 USD ($) item	Sep. 30, 2015 USD ($) item	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2009 USD ($) item	Dec. 31, 2007 item
Collaboration research and licensing agreements
Potential milestone payment												$ 2,584,300,000								$ 2,584,300,000
Revenue recognized												21,754,000	$ 3,503,000	$ 1,014,000	$ 1,491,000	$ 5,664,000	$ 848,000	$ 824,000	$ 2,184,000	27,762,000	$ 9,520,000	$ 10,172,000
Deferred revenue		$ 4,600,000										33,800,000				4,600,000				33,800,000	4,600,000
Current portion of deferred revenue		$ 2,254,000										33,287,000				$ 2,254,000				33,287,000	2,254,000
Amgen, Inc.
Collaboration research and licensing agreements
Potential milestone payment												1,657,500,000								1,657,500,000
Revenue recognized																				13,800,000	6,900,000	2,200,000
Deferred revenue												0								0
MorphoSys
Collaboration research and licensing agreements
Potential milestone payment												299,000,000								299,000,000
Revenue recognized																				8,500,000	1,000,000	900,000
Merck Sharp & Dohme Corp.
Collaboration research and licensing agreements
Potential milestone payment												9,500,000								9,500,000
Revenue recognized																				2,900,000
Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Potential milestone payment												399,000,000								399,000,000
Revenue recognized																				2,500,000	700,000	2,900,000
Janssen
Collaboration research and licensing agreements
Potential milestone payment												10,000,000								10,000,000
CSL Limited
Collaboration research and licensing agreements
Revenue recognized																						3,000,000
Novo Nordisk
Collaboration research and licensing agreements
Potential milestone payment												167,300,000								167,300,000
Revenue recognized																				100,000	600,000	1,000,000
Collaboration And License Agreement Member \| MorphoSys
Collaboration research and licensing agreements
Nonrefundable upfront payment										$ 13,000,000
Milestone payment received											$ 3,000,000
Revenue recognized																				0	0	3,000,000
Deferred revenue												0								0
Number of clinical trials initiated \| item											2
Collaboration And License Agreement Member \| Novo Nordisk
Collaboration research and licensing agreements
Nonrefundable upfront payment																					2,500,000
Revenue recognized																				2,900,000	$ 100,000
Deferred revenue												1,200,000								1,200,000
Research license term		2 years
Research term of revenue recognized																					2 years
Collaboration and Option Agreement \| Amgen, Inc.
Collaboration research and licensing agreements
Nonrefundable upfront payment								$ 11,000,000
Milestone payment received								2,000,000
Revenue recognized			$ 5,200,000																	0	$ 6,900,000	2,200,000
Option term after delivery of the data from a Phase 2 proof-of-concept (POC) clinical trial									90 days
Option fee									$ 50,000,000
Research and License Agreement 2015 \| Amgen, Inc.
Collaboration research and licensing agreements
Nonrefundable upfront payment	$ 45,000,000
Milestone payment received																				45,000,000
Potential milestone payment	$ 1,700,000,000												$ 1,700,000,000
Revenue recognized																				13,750,000
Deferred revenue												$ 31,250,000								$ 31,250,000
Collaborative Arrangement Number of Target Programs \| item	6
Number of previously indentified products \| item												3								3
Research and License Agreement 2015 \| Amgen, Inc. \| CD38 Program
Collaboration research and licensing agreements
Nonrefundable upfront payment																				$ 13,750,000
Potential milestone payment												$ 355,000,000								355,000,000
Research and License Agreement 2015 \| Amgen, Inc. \| Discovery Program
Collaboration research and licensing agreements
Nonrefundable upfront payment																				6,250,000
Potential milestone payment												$ 260,500,000								$ 260,500,000
Research license term																				3 years
Additional research term																				1 year
Previous targets which bispecific technology will be applied \| item	5											5	5							5
License Agreement \| Merck Sharp & Dohme Corp.
Collaboration research and licensing agreements
Nonrefundable upfront payment					$ 1,000,000
Annual maintenance fees					$ 500,000
Revenue recognized																			$ 500,000	$ 100,000	600,000	1,000,000
Deferred revenue												$ 55,000								55,000
Number of compounds \| item					1
Option and license agreement \| Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Nonrefundable upfront payment								3,000,000
Annual maintenance fees								$ 500,000
Revenue recognized																				8,500,000	1,000,000	900,000
Deferred revenue												1,100,000								1,100,000
Collaborative Arrangement Number of Target Programs \| item								6
Research license term								5 years
Annual maintenance fees payable during any extension of research term								$ 1,000,000
Milestone payment to be received for first product upon achievement of certain development, regulatory and commercial milestones								$ 66,500,000
Research License and Option Agreement \| Janssen
Collaboration research and licensing agreements
Revenue recognized																				0	0	0
Deferred revenue												0								0
Research Licensee and Collaboration Agreement 2007 Agreement \| Boehringer Ingelheim International GmbH
Collaboration research and licensing agreements
Milestone payment received																							$ 1,200,000
Revenue recognized																				0	0	0
Research license term																									3 years
Number of commercial options \| item																									1
Number of compounds \| item																									2
2009 Research License and Commercialization Agreement \| CSL Limited
Collaboration research and licensing agreements
Nonrefundable upfront payment																								$ 750,000
Milestone payment received						$ 2,500,000
Potential milestone payment												15,000,000								15,000,000
Revenue recognized																				2,500,000	$ 700,000	2,400,000
Deferred revenue												0								0
Research license term																								5 years
Number of technologies to which research license is provided \| item																								1
Number of commercial options \| item																								5
Number of additional options \| item				4
May 2013 Research License and Commercialization Agreement \| CSL Limited
Collaboration research and licensing agreements
Nonrefundable upfront payment							$ 500,000
Revenue recognized																						$ 500,000
Deferred revenue												0								0
Number of compounds \| item							1
Development-based
Collaboration research and licensing agreements
Potential milestone payment												406,300,000								406,300,000
Development-based \| Amgen, Inc.
Collaboration research and licensing agreements
Potential milestone payment												232,500,000								232,500,000
Development-based \| MorphoSys
Collaboration research and licensing agreements
Potential milestone payment												62,000,000								62,000,000
Development-based \| Merck Sharp & Dohme Corp.
Collaboration research and licensing agreements
Potential milestone payment												3,500,000								3,500,000
Development-based \| Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Potential milestone payment												51,000,000								51,000,000
Development-based \| Janssen
Collaboration research and licensing agreements
Potential milestone payment												6,000,000								6,000,000
Development-based \| Novo Nordisk
Collaboration research and licensing agreements
Potential milestone payment												36,300,000								36,300,000
Development-based \| Research and License Agreement 2015 \| Amgen, Inc. \| CD38 Program
Collaboration research and licensing agreements
Potential milestone payment												55,000,000								55,000,000
Development-based \| Research and License Agreement 2015 \| Amgen, Inc. \| Discovery Program
Collaboration research and licensing agreements
Potential milestone payment												35,500,000								35,500,000
Development-based \| 2009 Research License and Commercialization Agreement \| CSL Limited
Collaboration research and licensing agreements
Potential milestone payment												6,000,000								6,000,000
Regulatory-based
Collaboration research and licensing agreements
Potential milestone payment												767,000,000								767,000,000
Regulatory-based \| Amgen, Inc.
Collaboration research and licensing agreements
Potential milestone payment												345,000,000								345,000,000
Regulatory-based \| MorphoSys
Collaboration research and licensing agreements
Potential milestone payment												187,000,000								187,000,000
Regulatory-based \| Merck Sharp & Dohme Corp.
Collaboration research and licensing agreements
Potential milestone payment												6,000,000								6,000,000
Regulatory-based \| Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Potential milestone payment												168,000,000								168,000,000
Regulatory-based \| Novo Nordisk
Collaboration research and licensing agreements
Potential milestone payment												51,000,000								51,000,000
Regulatory-based \| Research and License Agreement 2015 \| Amgen, Inc. \| CD38 Program
Collaboration research and licensing agreements
Potential milestone payment												70,000,000								70,000,000
Regulatory-based \| Research and License Agreement 2015 \| Amgen, Inc. \| Discovery Program
Collaboration research and licensing agreements
Potential milestone payment												55,000,000								55,000,000
Regulatory-based \| 2009 Research License and Commercialization Agreement \| CSL Limited
Collaboration research and licensing agreements
Potential milestone payment												4,000,000								4,000,000
Sales-based
Collaboration research and licensing agreements
Potential milestone payment												1,411,000,000								1,411,000,000
Sales-based \| Amgen, Inc.
Collaboration research and licensing agreements
Potential milestone payment												1,080,000,000								1,080,000,000
Sales-based \| MorphoSys
Collaboration research and licensing agreements
Potential milestone payment												50,000,000								50,000,000
Sales-based \| Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Potential milestone payment												180,000,000								180,000,000
Sales-based \| Janssen
Collaboration research and licensing agreements
Potential milestone payment												4,000,000								4,000,000
Sales-based \| Novo Nordisk
Collaboration research and licensing agreements
Potential milestone payment												80,000,000								80,000,000
Sales-based \| Research and License Agreement 2015 \| Amgen, Inc. \| CD38 Program
Collaboration research and licensing agreements
Potential milestone payment												230,000,000								230,000,000
Sales-based \| Research and License Agreement 2015 \| Amgen, Inc. \| Discovery Program
Collaboration research and licensing agreements
Potential milestone payment												170,000,000								170,000,000
Sales-based \| 2009 Research License and Commercialization Agreement \| CSL Limited
Collaboration research and licensing agreements
Potential milestone payment												$ 5,000,000								$ 5,000,000

Summary of Significant Accounting Policies - Collaborative Research and Licensing Agreements - Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue recognition
Total	$ 2,584,300								$ 2,584,300
Revenue recognized	21,754	$ 3,503	$ 1,014	$ 1,491	$ 5,664	$ 848	$ 824	$ 2,184	27,762	$ 9,520	$ 10,172
Accounts receivable	44				2,966				44	2,966
Deferred revenue	33,800				$ 4,600				33,800	4,600
Development-based
Revenue recognition
Total	406,300								406,300
Regulatory-based
Revenue recognition
Total	767,000								767,000
Sales-based
Revenue recognition
Total	1,411,000								1,411,000
UNITED STATES
Revenue recognition
Revenue recognized									22,400	8,600	4,200
Non United States
Revenue recognition
Revenue recognized									5,400	900	6,000
Amgen, Inc.
Revenue recognition
Total	1,657,500								1,657,500
Revenue recognized									13,800	6,900	2,200
Deferred revenue	0								0
Amgen, Inc. \| Development-based
Revenue recognition
Total	232,500								232,500
Amgen, Inc. \| Regulatory-based
Revenue recognition
Total	345,000								345,000
Amgen, Inc. \| Sales-based
Revenue recognition
Total	1,080,000								1,080,000
MorphoSys
Revenue recognition
Total	299,000								299,000
Revenue recognized									8,500	1,000	900
MorphoSys \| Development-based
Revenue recognition
Total	62,000								62,000
MorphoSys \| Regulatory-based
Revenue recognition
Total	187,000								187,000
MorphoSys \| Sales-based
Revenue recognition
Total	50,000								50,000
Alexion Pharmaceuticals, Inc.
Revenue recognition
Total	399,000								399,000
Revenue recognized									2,500	700	2,900
Alexion Pharmaceuticals, Inc. \| Development-based
Revenue recognition
Total	51,000								51,000
Alexion Pharmaceuticals, Inc. \| Regulatory-based
Revenue recognition
Total	168,000								168,000
Alexion Pharmaceuticals, Inc. \| Sales-based
Revenue recognition
Total	180,000								180,000
BI
Revenue recognition
Total	27,000								27,000
BI \| Development-based
Revenue recognition
Total	9,000								9,000
BI \| Regulatory-based
Revenue recognition
Total	6,000								6,000
BI \| Sales-based
Revenue recognition
Total	12,000								12,000
CSL Limited
Revenue recognition
Revenue recognized											3,000
Janssen
Revenue recognition
Total	10,000								10,000
Janssen \| Development-based
Revenue recognition
Total	6,000								6,000
Janssen \| Sales-based
Revenue recognition
Total	4,000								4,000
Merck Sharp & Dohme Corp.
Revenue recognition
Total	9,500								9,500
Revenue recognized									2,900
Merck Sharp & Dohme Corp. \| Development-based
Revenue recognition
Total	3,500								3,500
Merck Sharp & Dohme Corp. \| Regulatory-based
Revenue recognition
Total	6,000								6,000
Novo Nordisk
Revenue recognition
Total	167,300								167,300
Revenue recognized									100	600	1,000
Novo Nordisk \| Development-based
Revenue recognition
Total	36,300								36,300
Novo Nordisk \| Regulatory-based
Revenue recognition
Total	51,000								51,000
Novo Nordisk \| Sales-based
Revenue recognition
Total	80,000								80,000
Other
Revenue recognition
Revenue recognized										300	200
2009 Research License and Commercialization Agreement \| CSL Limited
Revenue recognition
Total	15,000								15,000
Revenue recognized									2,500	$ 700	2,400
Deferred revenue	0								0
2009 Research License and Commercialization Agreement \| CSL Limited \| Development-based
Revenue recognition
Total	6,000								6,000
2009 Research License and Commercialization Agreement \| CSL Limited \| Regulatory-based
Revenue recognition
Total	4,000								4,000
2009 Research License and Commercialization Agreement \| CSL Limited \| Sales-based
Revenue recognition
Total	5,000								5,000
May 2013 Research License and Commercialization Agreement \| CSL Limited
Revenue recognition
Revenue recognized											$ 500
Deferred revenue	$ 0								$ 0

Summary of Significant Accounting Policies - Concentration Risk (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) customer	Dec. 31, 2014 USD ($) customer	Dec. 31, 2013 USD ($)
Concentrations of risk
Research and Development Expense \| $	$ 34,140	$ 18,516	$ 17,000
Concentrations of Risk
Amounts on deposit in excess of federally insured limits approximately	$12.1	$54.0
Payables \| Service providers
Concentrations of risk
Concentration risk percentage	55.00%	47.00%
Number of service providers	3	1
Number of critical suppliers	2

Summary of Significant Accounting Policies - Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Fair Value of Financial Instruments
Assets recorded at fair value	$ 190,184	$ 54,429
Money Market Funds
Fair Value of Financial Instruments
Assets recorded at fair value	9,453	54,429
Corporate Securities
Fair Value of Financial Instruments
Assets recorded at fair value	114,846
Government Securities
Fair Value of Financial Instruments
Assets recorded at fair value	65,885
Level 1
Fair Value of Financial Instruments
Assets recorded at fair value	9,453	54,429
Level 1 \| Money Market Funds
Fair Value of Financial Instruments
Assets recorded at fair value	9,453	$ 54,429
Level 2
Fair Value of Financial Instruments
Assets recorded at fair value	180,731
Level 2 \| Corporate Securities
Fair Value of Financial Instruments
Assets recorded at fair value	114,846
Level 2 \| Government Securities
Fair Value of Financial Instruments
Assets recorded at fair value	$ 65,885

Summary of Significant Accounting Policies - Property, Plant, and Equipment (Details)	12 Months Ended
	Dec. 31, 2015
Computers, software and equipment \| Minimum
Property and Equipment
Estimated useful lives of the assets	3 years
Computers, software and equipment \| Maximum
Property and Equipment
Estimated useful lives of the assets	5 years
Furniture and fixtures \| Minimum
Property and Equipment
Estimated useful lives of the assets	5 years
Furniture and fixtures \| Maximum
Property and Equipment
Estimated useful lives of the assets	7 years
Leasehold improvements \| Minimum
Property and Equipment
Estimated useful lives of the assets	5 years
Leasehold improvements \| Maximum
Property and Equipment
Estimated useful lives of the assets	7 years

Summary of Significant Accounting Policies - Intangibles (Details)	12 Months Ended
	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Patents, licenses, and other intangible assets
Number of primary criteria to determine capitalization of patent \| item	3
Total gross carrying amount	$ 13,010,000	$ 11,571,000
Total intangible assets, net	9,971,000	9,116,000
Amortization expense for patents, licenses, and other intangible assets	594,000	694,000	$ 598,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2016	636,000
2017	639,000
2018	628,000
2019	616,000
2020	609,000
Thereafter	2,393,000
Total	5,521,000
Nonamortizable intangible assets (trademarks)
Patents, licenses, and other intangible assets
Nonamortizable intangible assets (trademarks)	$ 399,000	400,000
Acquired licenses \| Minimum
Patents, licenses, and other intangible assets
Estimated economic life	5 years
Acquired licenses \| Maximum
Patents, licenses, and other intangible assets
Estimated economic life	25 years
Patents
Patents, licenses, and other intangible assets
Accumulated amortization	$ (2,214,000)	(1,776,000)
Patents \| Minimum
Patents, licenses, and other intangible assets
Estimated economic life	13 years
Patents \| Maximum
Patents, licenses, and other intangible assets
Estimated economic life	20 years
Patents, definite life
Patents, licenses, and other intangible assets
Amortizable intangible assets	$ 6,488,000	5,720,000
Patents, pending issuance
Patents, licenses, and other intangible assets
Amortizable intangible assets	4,051,000	3,654,000
Licenses and other amortizable intangible assets
Patents, licenses, and other intangible assets
Amortizable intangible assets	2,072,000	1,797,000
Accumulated amortization	(825,000)	(679,000)
Capitalized patent and licensing
Patents, licenses, and other intangible assets
Impairment of Intangible Assets (Excluding Goodwill)	296,000	$ 509,000	$ 205,000
In-process intangible assets
Patents, licenses, and other intangible assets
Total gross carrying amount	$ 4,100,000

Summary of Significant Accounting Policies - Net Loss Per Share (Details)			1 Months Ended		3 Months Ended								12 Months Ended
	Sep. 23, 2013 USD ($)	Jun. 26, 2013 USD ($)	Sep. 30, 2013 USD ($)	Jun. 30, 2013 USD ($)	Dec. 31, 2015 USD ($) $ / shares	Sep. 30, 2015 USD ($) $ / shares	Jun. 30, 2015 USD ($) $ / shares	Mar. 31, 2015 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares	Sep. 30, 2014 USD ($) $ / shares	Jun. 30, 2014 USD ($) $ / shares	Mar. 31, 2014 USD ($) $ / shares	Dec. 31, 2015 USD ($) segment $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2013 USD ($) $ / shares shares
Net Loss Per Share
Anti-dilutive securities (in shares) \| shares													1,356,000	2,852,000	1,794,000
Deemed dividend (in dollars)															$ (3,429,000)
Basic numerator:
Net loss					$ 7,757,000	$ (10,037,000)	$ (8,868,000)	$ (6,444,000)	$ (1,349,000)	$ (6,278,000)	$ (5,044,000)	$ (3,751,000)	$ (17,592,000)	$ (16,422,000)	(60,259,000)
Net deemed contribution on exchange of preferred stock															144,765,000
Net income (loss) attributable to common stockholders for basic net income (loss) per share													$ (17,592,000)	$ (16,422,000)	$ 84,506,000
Denominator:
Weighted average common shares outstanding \| shares													39,015,131	31,390,631	2,472,581
Basic net income (loss) per common share (in dollars per share) \| $ / shares					$ 0.19	$ (0.25)	$ (0.22)	$ (0.19)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.45)	$ (0.52)	$ 34.18
Diluted numerator:
Net income (loss) attributable to common stockholders for basic net income (loss) per share													$ (17,592,000)	$ (16,422,000)	$ 84,506,000
Deemed contribution															144,765,000
Net loss attributable to common stockholders for diluted net loss per share													$ (17,592,000)	$ (16,422,000)	$ (60,259,000)
Denominator
Weighted average common shares outstanding \| shares													39,015,131	31,390,631	2,472,581
Dilutive effect of conversion of convertible preferred stock \| shares															13,173,208
Weighted Average Number of Shares Outstanding, Diluted \| shares													39,015,131	31,390,631	15,645,789
Diluted net loss per common share \| $ / shares					$ 0.19	$ (0.25)	$ (0.22)	$ (0.19)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.45)	$ (0.52)	$ (3.85)
Segment Reporting
Number of Operating Segments \| segment													1
Stock-Based Compensation
Stock-based compensation expense													$ 4,869,000	$ 1,861,000	$ 198,000
Employee stock options
Net Loss Per Share
Anti-dilutive securities (in shares) \| shares													1,281,000	2,827,000	1,794,000
Employee Stock Purchase Plan
Net Loss Per Share
Anti-dilutive securities (in shares) \| shares													75,000	25,000
Stock-Based Compensation
Stock-based compensation expense													$ 341,000	$ 172,000
Series A-1 Convertible Preferred Stock
Net Loss Per Share
Deemed dividend (in dollars)	$ 2,300,000	$ 1,000,000		$ 1,000,000
Deemed contribution			$ 2,300,000
Diluted numerator:
Deemed contribution															$ 148,100,000

Marketable Securities (Details) $ in Thousands	Dec. 31, 2015 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	$ 190,700
Gross unrealized gains	6
Gross unrealized losses	(522)
Fair value	190,184
Marketable securities
Schedule of Available-for-sale Securities [Line Items]
Fair value	180,731
Money Market Funds
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	9,453
Fair value	9,453
Corporate Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	115,148
Gross unrealized gains	6
Gross unrealized losses	(308)
Fair value	114,846
Government Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	66,099
Gross unrealized losses	(214)
Fair value	65,885
Cash and Cash Equivalents
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 9,453

Marketable Securities - Maturities (Details) $ in Thousands	Dec. 31, 2015 USD ($)
Amortized Cost
Maturing in one year or less	$ 83,963
Maturing after one year through five years	97,284
Total amortized cost	181,247
Estimate Fair Value
Maturing in one year or less	83,840
Maturing after one year through five years	96,891
Total estimated fair value	$ 180,731

Convertible Notes Payable (Details) - 2009 and 2010 Notes - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Amount of debt issued	$ 15.2	$ 15.2
Interest rate (as a percent)	12.50%	10.00%
Maximum
Term	1 year	1 year

Initial Public Offering (Details) - USD ($)		1 Months Ended	12 Months Ended
Initial Public Offering (Details) - USD ($)	Dec. 02, 2013	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2013
Proceeds from issuance of common stock			$ 122,906,000	$ 80,517,000
Common Stock
Sale of common stock		8,625,000	8,625,000	14,639,500
IPO
Proceeds from initial public offering net of underwriting and other expenses	$ 72,500,000
IPO \| Common Stock
Sale of common stock	14,639,500
IPO price (in dollars per share)	$ 5.50
Proceeds from issuance of common stock	$ 80,517,250

Sale of Additional Common Stock (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2013
Proceeds from sale of common stock		$ 115,204	$ 72,507
Common Stock
Sale of common stock	8,625,000	8,625,000	14,639,500
Proceeds from sale of common stock	$ 115,200	$ 86	$ 146

Property and Equipment (Details) - USD ($)	12 Months Ended
Property and Equipment (Details) - USD ($)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property and equipment
Property and equipment, gross	$ 9,194,000	$ 7,453,000
Less accumulated depreciation and amortization	(6,884,000)	(6,554,000)
Property, Plant and Equipment, Net	2,310,000	899,000
Depreciation expense	519,000	188,000	$ 113,000
Computers, software and equipment
Property and equipment
Property and equipment, gross	5,338,000	4,270,000
Furniture and fixtures
Property and equipment
Property and equipment, gross	102,000	97,000
Leasehold and tenant improvements
Property and equipment
Property and equipment, gross	$ 3,754,000	$ 3,086,000

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reconciliation of federal statutory income tax rate to effective income tax rate
Federal statutory income tax rate	$ (6,157)	$ (5,583)	$ (20,488)
Loss on settlement of notes			18,884
Non-deductible research and development credit	708	435
Stock based compensation	651	478
Other	14	2	4
Net change in valuation allowance	4,784	4,668	$ 1,600
Deferred income tax assets
Net operating loss carryforwards	69,348	47,401
Research credits	8,096	12,789
Depreciation	735	790
Stock-based compensation	206
Accrued compensation	511	373
Deferred revenue	1,032	1,836
Gross deferred income tax assets	79,928	63,189
Valuation allowance	(76,036)	(59,602)
Net deferred income tax assets	3,892	3,587
Deferred income tax liabilities
Patent costs	(3,489)	(3,199)
Licensing costs	(339)	(317)
Capitalized legal costs	(64)	(71)
Gross deferred income tax liabilities	$ (3,892)	$ (3,587)
Net deferred income tax asset/(liability)
Increase (decrease) in deferred tax asset valuation allowance	$ (21,400)

Income Taxes - Carryforwards (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Federal
Income Taxes [Line Items]
Current provision	$ 0	$ 0	$ 0
Cumulative net operating loss carryforwards	181,400
Tax credit carryforwards	3,900
State
Income Taxes [Line Items]
Current provision	0	$ 0	$ 0
Cumulative net operating loss carryforwards	127,700
Tax credit carryforwards	$ 4,200

Stock-Based Compensation - Plan details (Details)		12 Months Ended			13 Months Ended
Stock-Based Compensation - Plan details (Details)	Jan. 01, 2014 shares	Dec. 31, 2015 item $ / shares shares	Dec. 31, 2014 $ / shares shares	Dec. 31, 2013 $ / shares shares	Dec. 31, 2014 $ / shares shares	Dec. 02, 2013 shares
Stock options
Stock-based compensation
Total number of shares of common stock available for issuance		2,917,182	2,583,186	2,403,368	2,583,186
Options granted (in shares)		940,250	1,049,521
Information with respect to stock options outstanding
Exercisable options (in shares)		1,600,351	1,393,729	1,203,885	1,393,729
Weighted-average exercise price per share of exercisable options (in dollars per share) \| $ / shares		$ 3.99	$ 1.01	$ 0.59	$ 1.01
Weighted average grant date fair value per share of options granted during the year (in dollars per share) \| $ / shares		$ 10.66	$ 7.39	$ 3.78
Weighted-average remaining contractual life		6 years 11 months 23 days	6 years 5 months 5 days	5 years 8 months 19 days
Employee Stock Purchase Plan
Stock-based compensation
Total number of shares of common stock available for issuance		581,286
Initial term of plan		2 years
Second term of plan		2 years
Number of six month purchase periods \| item		4
Purchase period		6 months
Increase in shares of common stock available for issuance (in shares)	313,545
Awards issued under the plan (in shares)		176,363
Employee Stock Purchase Plan \| Minimum
Stock-based compensation
Percentage of compensation that employees may withhold to purchase stock at a discount		1.00%
Employee Stock Purchase Plan \| Maximum
Stock-based compensation
Percentage of compensation that employees may withhold to purchase stock at a discount		15.00%
Purchase price as percentage of stock price at the initial offering date		85.00%
Purchase price as percentage of stock price at the purchase date		85.00%
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
The 2010 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		0
The 2013 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		6,326,415
Annual percentage increase in shares of common stock available for issuance		4.00%
Increase in shares of common stock available for issuance (in shares)	1,257,371
The 2013 Plan \| Stock options
Stock-based compensation
Options granted (in shares)					2,004,750
Prior Plans
Stock-based compensation
Total number of shares of common stock available for issuance						2,684,456

Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($)	12 Months Ended			13 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014
Stock option activity, Number of Shares
Balance at the beginning of the period (in shares)	2,826,794	1,794,214
Options granted (in shares)	940,250	1,049,521
Options forfeited (in shares)	(9,375)
Options expired (in shares)	(7,500)	(1,000)
Options exercised (in shares)	(379,268)	(15,941)
Balance at the end of the period (in shares)	3,370,901	2,826,794	1,794,214	2,826,794
Options vested and expected to vest (in shares)	3,064,829
Exercisable (in shares)	1,600,351	1,393,729	1,203,885	1,393,729
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)	$ 5.12	$ 1.66
Options granted (in dollars per share)	15.94	10.99
Options forfeited (in dollars per share)	18.75
Options expired (in dollars per share)	11.46	10.31
Options exercised (in dollars per share)	1.46	0.59
Balance at the end of the period (in dollars per share)	8.50	5.12	$ 1.66	$ 5.12
Options vested and expected to vest (in dollars per share)	8.09
Exercisable (in dollars per share)	$ 3.99	$ 1.01	$ 0.59	$ 1.01
Additional information
Weighted-Average Remaining Contractual Term, Balance outstanding	6 years 11 months 23 days	6 years 5 months 5 days	5 years 8 months 19 days
Weighted-Average Remaining Contractual Term, Options vested and expected to vest	6 years 9 months 22 days
Weighted-Average Remaining Contractual Term, Exercisable	5 years 1 month 6 days
Aggregate Intrinsic Value, Balance outstanding	$ 21,854,000	$ 30,863,000		$ 30,863,000
Aggregate Intrinsic Value, Options vested and expected to vest	21,048,000
Aggregate Intrinsic Value, Exercisable	17,016,000
Intrinsic value of options exercised	$ 5,400,000	$ 155,000	$ 191,000
The 2013 Plan
Stock option activity, Number of Shares
Options granted (in shares)				2,004,750

Stock-Based Compensation - Options by exercise price (Details)	12 Months Ended
	Dec. 31, 2015 $ / shares shares
Stock options outstanding and exercisable by exercise price
Stock Options Outstanding, Number of Shares \| shares	3,370,901
Stock Options Outstanding, Remaining Contractual Term	6 years 11 months 23 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 8.50
Stock Options Exercisable, Number of Shares \| shares	1,600,351
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 3.99
$0.59 - $4.25
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	0.59
Range of Exercise Prices, upper limit (in dollars per share)	$ 4.25
Stock Options Outstanding, Number of Shares \| shares	1,413,261
Stock Options Outstanding, Remaining Contractual Term	4 years 7 months 6 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 1.87
Stock Options Exercisable, Number of Shares \| shares	1,163,519
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 1.38
$5.50 - $8.56
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	5.50
Range of Exercise Prices, upper limit (in dollars per share)	$ 8.56
Stock Options Outstanding, Number of Shares \| shares	50,000
Stock Options Outstanding, Remaining Contractual Term	7 years 7 months 2 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 7.64
Stock Options Exercisable, Number of Shares \| shares	20,808
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 7.09
$9.26 – $14.38
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	9.26
Range of Exercise Prices, upper limit (in dollars per share)	$ 14.38
Stock Options Outstanding, Number of Shares \| shares	1,026,140
Stock Options Outstanding, Remaining Contractual Term	8 years 3 months 29 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 11.20
Stock Options Exercisable, Number of Shares \| shares	415,899
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 11.11
$14.54 – $22.35
Stock options outstanding and exercisable by exercise price
Range of Exercise Prices, lower limit (in dollars per share)	14.54
Range of Exercise Prices, upper limit (in dollars per share)	$ 22.35
Stock Options Outstanding, Number of Shares \| shares	881,500
Stock Options Outstanding, Remaining Contractual Term	9 years 2 months 5 days
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share)	$ 16.00
Stock Options Exercisable, Number of Shares \| shares	125
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 16.52

Stock-Based Compensation - FV of employee stock options (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Compensation expense
Total employee, director and non-employee stock-based compensation expense	$ 4,869,000	$ 1,861,000	$ 198,000
Employee stock options
Weighted average assumptions for estimated fair value of employee stock options
Common stock fair value per share (in dollars per share)			$ 5.50
Common stock fair value per share minimum	11.82	8.56
Common stock fair value per share maximum	22.35	16.52
Expected volatility, low end of range (as a percent)	69.17%
Expected volatility, high end of range (as a percent)	86.46%
Expected volatility (as a percent)		77.40%	86.70%
Risk-free interest rate, low end of range (as a percent)	1.44%	1.67%	0.90%
Risk-free interest rate, high end of range (as a percent)	1.84%	1.96%	2.10%
Expected term (years)		6 years	6 years
Compensation expense
Unamortized compensation expense related to unvested options	$ 10,800,000	$ 7,600,000
Period to recognize unamortized compensation expense	2 years 8 months 27 days
Employee stock options \| Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	5 years 2 months 23 days
Employee stock options \| Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	6 years 29 days
Employee Stock Purchase Plan
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, low end of range (as a percent)	67.80%
Expected volatility, high end of range (as a percent)	82.90%
Risk-free interest rate, low end of range (as a percent)	0.07%
Risk-free interest rate, high end of range (as a percent)	0.93%
Compensation expense
Unamortized compensation expense related to unvested options	$ 395,000	$ 204,000
Employee Stock Purchase Plan \| Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, low end of range (as a percent)		70.60%
Risk-free interest rate, low end of range (as a percent)		0.06%
Expected term (years)	6 months	6 months
Employee Stock Purchase Plan \| Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, high end of range (as a percent)		71.80%
Risk-free interest rate, high end of range (as a percent)		0.46%
Expected term (years)	2 years	2 years
General and administrative
Compensation expense
Total employee, director and non-employee stock-based compensation expense	$ 2,218,000	$ 848,000	$ 40,000
Research and development
Compensation expense
Total employee, director and non-employee stock-based compensation expense	$ 2,650,000	$ 1,013,000	$ 158,000

Commitments and Contingencies (Details) - USD ($)	1 Months Ended		12 Months Ended
Commitments and Contingencies (Details) - USD ($)	Feb. 28, 2015	Jan. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating Leases
2016			$ 679,000
2017			699,000
2018			602,000
2019			581,000
2020			299,000
Net rent expense			$ 558,000	$ 597,000	$ 547,000
Monrovia
Renewal term		5 years
San Diego
Renewal term	1 year

Commitments and Contingencies - Litigation (Details) - DePinto vs John S Stafford Litigation Case - USD ($)		12 Months Ended
	Oct. 05, 2015	Dec. 31, 2015
Loss Contingencies [Line Items]
Damages sought	$ 950,000
Insurance proceeds		$ 187,500
Paid legal award		950,000
Loss contingency accrual		$ 0

Convertible Promissory Notes and Conversion of Convertible Preferred Stock (Details)					1 Months Ended	12 Months Ended
	Dec. 03, 2013 shares	Sep. 23, 2013 USD ($) $ / shares shares	Jun. 26, 2013 USD ($) $ / shares shares	Jun. 13, 2013 USD ($) $ / shares shares	Jun. 30, 2013 USD ($)	Dec. 31, 2013 USD ($) shares	Dec. 31, 2015 shares	Dec. 31, 2014 shares
Convertible Promissory Notes
Loss on extinguishment of debt (in dollars)						$ (48,556,000)
Net deemed contribution on exchange of preferred stock						144,765,000
Fair value of stock converted (in dollars)						79,601,000
Convertible preferred stock issued (in shares) \| shares							0	0
Aggregate purchase price of convertible preferred stock (in dollars)						10,000,000
Deemed dividend (in dollars)						(3,429,000)
Note Conversion Agreement
Convertible Promissory Notes
Associated transaction costs (in dollars)						$ 41,000
Series AE Converted To Series A-1 Preferred Shares
Convertible Promissory Notes
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock \| shares				257,409
Net deemed contribution on exchange of preferred stock				$ 140,600,000
Reduction in deemed contribution due to issuance cost				$ 3,000,000
Series A1 Converted To Series A2 Preferred Shares
Convertible Promissory Notes
Net deemed contribution on exchange of preferred stock			$ 7,500,000
Conversion ratio Series A-1 to Series A-2					3
Series A-1 Convertible Preferred Stock
Convertible Promissory Notes
Number of shares issued on conversion of notes \| shares						45,902,321
Number of preferred stock converted (in shares) \| shares	49,671,392					(49,671,392)
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock \| shares	16,022,915		5,561,006
Associated transaction costs (in dollars)		$ 34,000	$ 40,000
Fair value of stock issued (in dollars)		$ 4,700,000
Fair value of stock converted (in dollars)			$ 8,600,000
Convertible preferred stock issued (in shares) \| shares		1,766,430	5,586,510			7,352,940
Share Price \| $ / shares		$ 1.36	$ 1.36
Aggregate purchase price of convertible preferred stock (in dollars)		$ 2,400,000	$ 7,600,000		$ 10,000,000
Deemed dividend (in dollars)		$ 2,300,000	$ 1,000,000		$ 1,000,000
Fair value of convertible preferred stock (in dollars per share) \| $ / shares		$ 2.69	$ 1.54
Series A-1 Convertible Preferred Stock \| Note Conversion Agreement
Convertible Promissory Notes
Number of shares issued on conversion of notes \| shares				45,902,321
Number of preferred stock converted (in shares) \| shares				5,303,597
Fair value of stock issued (in dollars)				$ 70,700,000
Share Price \| $ / shares				$ 1.54
Series A-1 Convertible Preferred Stock \| Series AE Converted To Series A-1 Preferred Shares
Convertible Promissory Notes
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock \| shares				1,977,137
Fair value of stock issued (in dollars)				$ 3,000,000
Series A-2 Convertible Preferred Stock
Convertible Promissory Notes
Number of preferred stock converted (in shares) \| shares	1,851,814					(1,851,814)
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock \| shares	597,359		1,851,814
Fair value of stock issued (in dollars)			$ 1,100,000
Fair value of convertible preferred stock (in dollars per share) \| $ / shares			$ 0.58
Series A-2 Convertible Preferred Stock \| Note Conversion Agreement
Convertible Promissory Notes
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock \| shares				1,766,097
Series A-2 Convertible Preferred Stock \| Series A1 Converted To Series A2 Preferred Shares
Convertible Promissory Notes
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock \| shares				85,717

Condensed Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Condensed Quarterly Financial Data (unaudited)
Total revenue	$ 21,754	$ 3,503	$ 1,014	$ 1,491	$ 5,664	$ 848	$ 824	$ 2,184	$ 27,762	$ 9,520	$ 10,172
Loss from operations	7,438	(10,312)	(8,986)	(6,478)	(1,350)	(6,287)	(5,053)	(3,767)	(18,338)	(16,457)	(10,520)
Net loss	$ 7,757	$ (10,037)	$ (8,868)	$ (6,444)	$ (1,349)	$ (6,278)	$ (5,044)	$ (3,751)	$ (17,592)	$ (16,422)	$ (60,259)
Basic (in dollars per share)	$ 0.19	$ (0.25)	$ (0.22)	$ (0.19)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.45)	$ (0.52)	$ 34.18
Diluted (in dollars per share)	$ 0.19	$ (0.25)	$ (0.22)	$ (0.19)	$ (0.04)	$ (0.20)	$ (0.16)	$ (0.12)	$ (0.45)	$ (0.52)	$ (3.85)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References + Details

- Definition

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

+ References + Details

Initial Public Offering	12 Months Ended
Initial Public Offering	Dec. 31, 2015
Initial Public Offering
Initial Public Offering	5. Initial Public Offering On December 2, 2013, we commenced our initial public offering pursuant to a resigtration statement on Form S-1 that was declared effective by the SEC on December 3, 2013 and that registered an aggregate of 14,639,500 shares of our common stock for sale to the public at a price of $5.50 per share and an aggregate offering price of $80,517,250. The net offering procceds to us, after deducting underwriting discounts and commissions and offering costs, were approximately $72.5 million. Offering costs, which consisted of legal, accounting, printing and filing fees incurred in the preparation of the Company’s Registration Statement on Form S-1 as part of the Company’s IPO, have been offset against the IPO proceeds upon the completion of the offering in December 2013.

Sale of Additional Common Stock	12 Months Ended
Sale of Additional Common Stock	Dec. 31, 2015
Sale of Additional Common Stock
Sale of Additional Common Stock	6. Sale of Additional Common Stock In March 2015, we completed the sale of 8,625,000 shares of common stock which included shares we issued pursuant to our underwriters’ exercise of their over-allotment option pursuant to a follow-on offering. We received net proceeds of $115.2 million, after underwriting discounts, commissions and estimated offering expenses.

Related Parties (Details)	Sep. 04, 2013 USD ($)
Related Parties
Waiver of debt availed by CEO	$ 166,000

Summary of Significant Accounting Policies - Segments (Details)	12 Months Ended
	Dec. 31, 2015 segment
Segment Reporting
Number of Operating Segments	1

401(k) Plan (Details) - USD ($) $ in Thousands	12 Months Ended
401(k) Plan (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
401(k) Plan
Employer contributions	$ 0	$ 0	$ 0