0
0
0
0
0
0
59800000
36000000
10500000
5000000
500000
5000000
30000000
1859151
3.76
109500000
25000000
30000000
3179255
1859151
63585
119752983
1.00259507
59908284
1.00259507
P5Y
1859151
1401443
1500000
50000
59844699
60000000
-10000
-10000
0.0001
26
101443
15.00
14969118
119752983
0
0
-76000
32000
-77000
1000
0.0001
812500
0.0001
-23052000
252000
-23305000
1000
671875
59908284
59849000
1859151
6990000
-34940000
3179255
28000
1893000
-36862000
1000
705273
119752983
119826000
1.00259507
1859151
6990000
198052000
146203000
0
0
0
0.0001
0
0
5600
108000
941000
100000
27300000
631000
27300000
3058000
10000000
0
0
0
2000
P3Y8M12D
84000
95445000
12070000
158273000
10909000
2665000
7912000
1456000
98000
1124000
30814000
461000
215000
436000
448000
122745000
37000
0.0001
200000000
22989987
22566940
P4Y
-51949000
0
227000
4979255
30814000
1683000
400000
28716000
0.08
332000
129317000
158273000
95445000
95445000
1294000
1099000
3484000
2035000
23289000
4011000
153600000
127000
4000
151338000
151461000
423047
15000
98000
198052000
-51949000
2000
423047
22566940
0
0
0
0
28716000
28716000
24777000
24777000
24943000
24943000
22482000
22482000
13973000
13973000
36570000
36570000
28716000
28716000
24777000
24777000
3000
24926000
20000
24943000
1000
22482000
1000
22482000
13966000
7000
13973000
36471000
99000
36570000
16292000
1465
2.94
10000
3206812
4.98
3206812
23200000
1200000
500000
1272443
1272443
500000
0.0001
0
0
0
0
0
0.0001
0
0
0
42689000
108772000
151461000
34000
-17313000
148000
14000
0.0001
0
100000
5195000
0
602000
0
12000
0
0
0
1000
2449000
51975000
2449000
269000
2180000
51963000
0.0001
180000000
1187500
636719
5195000
346000
-17348000
0
9347681
116000
51963000
51975000
51975000
15000
70000
4085000
785000
1310000
550781
500000
2200000
12000
2200000
34000
-17348000
1000
0.0001
550781
636719
2100000
0
1859151
0.05
1600000
1859151
0
0.0001
120000000
59908284
59908284
60064000
59849000
7488530
1.00259507
59844699
0.0001
1859151
1859151
6990000
51500000
0
0
16.0415
50000000
5600
1600000
P4Y
5600
P5Y
229899
1149499
14969118
P4Y
562500
1700000
P4Y
562500
P10Y
7500000
2
7000000
2.936
1320104
51014
400000
5000000
0.80
0.125
1859151
5000000
67200000
550781
-77000
72000
50000
3000
290570
0
-77000
32000
51000
1000
-19000
-75000
-0.26
-77000
75000
56000
55000
2000
-2000
0
0
1000
-17348000
0.210
0.00
0.070
-0.019
12000
7500000
0
0
14490000
585000
50000
-0.299
-17348000
0
116000
2331000
0
0
899331
0
0
0
0
0
-17348000
-14000
0
0
34000
51963000
14000
-7500000
59836000
5200000
34000
0
0
1000
59785000
-373000
1
-17348000
-17406000
-19.29
17406000
2449000
P3M
72000
6990000
64000
34000
-17348000
1000
625000
Each share of common stock is entitled to one voting right.
1
11719
0.15
The Company will issue additional shares of common stock to increase Shire's ownership to 5% of the then-outstanding fully diluted shares, and (2) in the event that certain liquidation events occur prior to an initial public offering and Shire's ownership is less than 5% of the then outstanding fully diluted shares of common stock, Shire is entitled to receive additional proceeds, if needed, to equal 5% of proceeds available for distribution to the Companies security holders.
0.05
34000
11719
26000
8000
P3Y10M24D
0
7480590
59785000
59844699
63585
64000
200000
7488530
6990000
1859151
-34601000
3046000
84000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Investments</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
classifies all investments as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale,</font></font> as the sale
of such securities may be required prior to maturity. Management
determines the appropriate classification of its investments in
debt securities at the time of purchase. Investments with original
maturities beyond three months at the date of purchase and which
mature at, or less than twelve months from the balance sheet date,
are classified as a current asset.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Investments are
carried at fair value, with unrealized gains and losses reported as
accumulated other comprehensive income (loss) until realized. The
Company periodically evaluates whether declines in fair values of
its <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities
below their book value are other-than-temporary. This evaluation
consists of several qualitative and quantitative factors regarding
the severity and duration of the unrealized loss as well as the
Company’s ability and intent to hold the <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> security
until a forecasted recovery occurs. Additionally, the Company
assesses whether it has plans to sell the security or it is more
likely than not it will be required to sell any <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities
before recovery of its amortized cost basis. The cost of debt
securities is adjusted for amortization of premiums and accretion
of discounts to maturity. Such amortization and accretion, as well
as interest and dividends, are included in interest income.
Realized gains and losses from the sale of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities,
if any, are determined on a specific identification basis and are
also included in interest income.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recently
Adopted Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
January 1, 2019, the Company adopted ASU <font style="WHITE-SPACE: nowrap">No. 2016-02</font><i>, Leases (Topic
842)</i>, which amended existing guidance to require substantially
all leases to be recognized by lessees on their balance sheet as a
ROU asset and corresponding lease liability, including leases
currently accounted for as operating leases, including qualitative
and quantitative disclosures. There was no impact on the
accompanying unaudited condensed consolidated financial statements
as of the adoption date, January 1, 2019.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Other recent
accounting pronouncements issued by the Financial Accounting
Standards Board (“FASB”) (including its Emerging Issues
Task Force), the American Institute of Certified Public
Accountants, and the SEC did not, or are not believed by management
to, have a material impact on the Company’s present or future
consolidated financial position, results of operations or cash
flows.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Property
and Equipment</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Property and
equipment are recorded at cost less accumulated depreciation,
ranging from three to five years. Leasehold improvements are
amortized over the shorter of their useful lives or the related
lease term. As of September 30, 2019, and December 31,
2018, property and equipment consisted primarily of leasehold
improvements of $0.5 million and zero, respectively.
Accumulated depreciation as of September 30, 2019 and
December 31, 2018 was $0.1 million and zero,
respectively.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Research
and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Research and
development expenses consist primarily of fees paid to contract
research organizations and other vendors for clinical, <font style="WHITE-SPACE: nowrap">non-clinical</font> and manufacturing
services, salaries and benefits, including stock-based compensation
expense, consultant expenses, costs related to acquiring
manufacturing materials, costs related to compliance with
regulatory requirements and license payments related to acquiring
intellectual property rights for the Company’s product
candidates. Research and development expenses are expensed as
incurred.</font></p>
</div>
1444000
0
0
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Leases</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In accordance
with Accounting Standards Update (“ASU”) <font style="WHITE-SPACE: nowrap">No. 2016-02,</font> as adopted on
January 1, 2019, the Company determines if an arrangement is a
lease at inception. Operating lease <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">right-of-use</font></font>
(“ROU”) assets represent the Company’s right to
use an underlying asset during the lease term, and operating lease
liabilities represent the Company’s obligation to make lease
payments arising from the lease. Operating leases are included in
ROU assets, current operating lease liabilities, and long-term
operating lease liabilities on our unaudited condensed consolidated
balance sheet.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Operating lease
ROU assets and lease liabilities are initially recognized based on
the present value of the future minimum lease payments over the
lease term at commencement date calculated using the
Company’s incremental borrowing rate applicable to the lease
asset, unless the implicit rate is readily determinable. Operating
lease ROU assets also include any lease payments made at or before
lease commencement and exclude any lease incentives received. The
Company determines the lease term as the noncancelable period of
the lease and may include options to extend or terminate the lease
when it is reasonably certain that the Company will exercise that
option. Leases with a term of 12 months or less are not recognized
on the unaudited condensed consolidated balance sheet. The
Company’s leases do not contain any residual value
guarantees. Lease expense for minimum lease payments is recognized
on a straight-line basis over the lease term.</font></p>
</div>
0
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Financial
assets and liabilities subject to fair value measurements on a
recurring basis and the level of inputs used in such measurements
by major security type are presented in the following table (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September 30, 2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Financial
assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
fund</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. treasury
bills</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Corporate debt
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,570</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,570</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Commercial paper</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. government
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Asset backed
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,689</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">108,772</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
7474000
4003000
200000
455000
Mirum Pharmaceuticals, Inc.
0001759425
2018-05-02
false
S-1
2019-09-30
Non-accelerated Filer
true
true
true
28611000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
September 30, 2019, the remaining contractual maturities
of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> debt
securities were as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="91%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Estimated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Fair 
Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Due within one
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">95,445</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">One to two years</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">23,289</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Three years or
more</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,011</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">122,745</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="87%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; DISPLAY: table-cell">
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Year Ending December 31,</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Undiscounted</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Rent 
Payments</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2019 (remaining three
months)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">108</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">436</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2022</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2023</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2024</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total undiscounted lease
payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,683</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Less: imputed
interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total lease
liability</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,456</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Cash and
Cash Equivalents</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
considers all highly liquid investments with original maturities of
three months or less at the date of purchase to be cash
equivalents. The carrying amounts reported in the unaudited
condensed consolidated balance sheet for cash and cash equivalents
are valued at cost, which approximate their fair value. Cash
equivalents may consist of money market accounts, money market
funds, U.S. treasury bills and repurchase agreements.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
invests in certain reverse repurchase agreements, which are
collateralized by deposits in the form of U.S. Treasury Securities
for an amount no less than 102% of their value. The Company does
not record an asset or liability for the collateral as the Company
does not intend to sell or <font style="WHITE-SPACE: nowrap">re-pledge</font> the collateral. The
collateral has the prevailing credit rating of at least the U.S.
Government Treasuries and Agencies. The Company utilizes a
third-party custodian to manage the exchange of funds and ensure
that collateral received is maintained at 102% of the value of the
reverse repurchase agreements on a daily basis.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Basis of
Presentation</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”) for interim financial
information and pursuant to Form <font style="WHITE-SPACE: nowrap">10-Q</font> and Article 10 of Regulation
<font style="WHITE-SPACE: nowrap">S-X</font> of the Securities and
Exchange Commission (SEC). Accordingly, the accompanying unaudited
condensed consolidated financial statements do not include all of
the information and notes required by GAAP for complete financial
statements. The unaudited interim financial statements reflect all
adjustments which, in the opinion of management, are necessary for
a fair statement of the results for the periods presented. All such
adjustments are of a normal and recurring nature. The unaudited
condensed consolidated balance sheet as of December 31, 2018
has been derived from the audited consolidated financial statements
at that date but does not include all information and footnotes
required by GAAP for complete financial statements. The operating
results presented in these unaudited condensed consolidated
financial statements are not necessarily indicative of the results
that may be expected for any future periods. These unaudited
condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
the notes thereto for the period from May 2, 2018 to
December 31, 2018 included in the Company’s prospectus
dated July 17, 2019 that forms a part of the Company’s
Registration Statement on Form <font style="WHITE-SPACE: nowrap">S-1</font> (File <font style="WHITE-SPACE: nowrap">No. 333-232251),</font> as filed with
the SEC pursuant to Rule 424(b)(4) promulgated under the Securities
Act of 1933, as amended, on July 18, 2019.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Net Loss
Per Share</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Basic net loss
per share of common stock is computed by dividing net loss
attributable to common stockholders by the weighted-average number
of shares of common stock outstanding for the period, without
consideration for potentially dilutive securities. Diluted net loss
per share is computed by dividing the net loss attributable to
common stockholders by the weighted-average number of shares of
common stock and potentially dilutive securities outstanding for
the period determined using the treasury-stock and <font style="WHITE-SPACE: nowrap">if-converted</font> methods. Diluted net loss
per share excludes the potential impact of the Company’s
common stock subject to repurchase and common stock options because
their effect would be anti-dilutive due to the Company’s net
loss. Since the Company had a net loss in each of the periods
presented, basic and diluted net loss per common share were the
same.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
outstanding potentially dilutive shares have been excluded from the
calculation of diluted net loss per share for the periods presented
due to their anti-dilutive effect:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="86%"></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Options to purchase common
stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Common stock subject to
repurchase</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">423,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,629,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
assumptions were used to estimate the fair value of stock option
awards granted during the following periods:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Three Months Ended<br />
September 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Nine Months Ended<br />
September 30,</b></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Exercise price</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$9.86-$15.00</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$2.94-$15.00</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected term (in
years)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">6.0-6.3</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">6.0-6.3</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">75.31%-75.98%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">73.88%-75.98%</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Risk-free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">1.46%-1.89%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">1.46%-2.46%</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Grant date fair value of
options granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$6.62-$10.01</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$6.62-$10.46</font></font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Common stock
reserved for issuance is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Conversion of Series A
Preferred Stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,488,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Stock options issued and
outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Reserved for future stock
awards or option grants</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,272,443</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,859,151</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Reserved for employee stock
purchase plan</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">500,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,979,255</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,347,681</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The accounting
guidance defines fair value, establishes a consistent framework for
measuring fair value and expands disclosure for each major asset
and liability category measured at fair value on either a recurring
or nonrecurring basis. Fair value is defined as an exit price,
representing the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As
a basis for considering such assumptions, the accounting guidance
establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 1:
Observable inputs such as quoted prices in active
markets;</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 2:
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 3:
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The carrying
amounts of all cash equivalents, investments, accounts payable and
accrued liabilities are reasonable estimates of their fair
value.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">There were no
transfers between Levels 1, 2 or 3 for the periods
presented.</font></p>
</div>
-25000
123000
7745241
3629859
0
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>1. Description of
Business</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Mirum
Pharmaceuticals, Inc. (the “Company”) was incorporated
in the State of Delaware on May 2, 2018, and is headquartered
in Foster City, California. The Company is a biopharmaceutical
company focused on the development and commercialization of a
late-stage pipeline of novel therapies for debilitating liver
diseases. The Company’s pipeline consists of two
clinical-stage product candidates, maralixibat and volixibat, with
mechanisms of action that have potential utility across a wide
range of orphan liver diseases. The Company commenced significant
operations in November 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The unaudited
condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, Mirum Pharmaceuticals
AG. All intercompany balances and transactions among the
consolidated entities have been eliminated in
consolidation.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Reverse
Stock Split</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On July 3,
2019, the Company effected a <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">1-for-8</font></font> reverse stock split of
its common stock. The par value and the authorized number of shares
of the common stock were not adjusted as a result of the reverse
stock split. The reverse stock split resulted in an adjustment to
the conversion price of the Company’s Series A redeemable
convertible preferred stock (the “Series A Preferred
Stock”) to reflect a proportional decrease in the number of
shares of common stock to be issued upon conversion. The
accompanying unaudited condensed consolidated financial statements
and notes to the unaudited condensed consolidated financial
statements give retroactive effect to the reverse stock split for
all periods presented.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Initial
Public Offering</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
July 22, 2019, the Company completed its initial public
offering (“IPO”) of its common stock. In connection
with its IPO, the Company issued and sold 5,000,000 shares of its
common stock at a price of $15.00 per share. As a result of the
IPO, the Company received $67.2 million in net proceeds, after
deducting underwriting discounts, commissions and offering
expenses. At the closing of the IPO, 119,752,983 shares of
outstanding Series A Preferred Stock were automatically converted
into 14,969,118 shares of common stock, and 1,859,151 shares of
redeemable common stock were reclassified into permanent equity due
to the expiration of the deemed redemption feature. Following the
IPO, there were no shares of Series A Preferred Stock or shares of
redeemable common stock outstanding.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Liquidity</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company has
a limited operating history, has incurred significant operating
losses since its inception, and the revenue and income potential of
the Company’s business and market are unproven. As of
September 30, 2019, the Company had an accumulated deficit of
$51.9 million and cash, cash equivalents and investments of
$153.6 million, which is available to fund future operations.
The Company believes that its cash, cash equivalents and
investments as of September 30, 2019 provide sufficient
capital resources to continue its operations for at least twelve
months from the issuance date of the accompanying unaudited
condensed consolidated financial statements. As such, the unaudited
condensed consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets
and satisfaction of liabilities in the normal course of business.
The unaudited condensed consolidated financial statements do not
include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and
classification of liabilities that might result from the outcome of
this uncertainty. Management expects to continue to incur
additional substantial losses in the foreseeable future as a result
of the Company’s research and development
activities.</font></p>
</div>
-34601000
119826000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
outstanding potentially dilutive shares have been excluded from the
calculation of diluted net loss per share for the periods presented
due to their anti-dilutive effect:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="86%"></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Options to purchase common
stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Common stock subject to
repurchase</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">423,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,629,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Accrued
expenses consists of the following (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="78%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September 30,<br />
2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31,<br />
2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued costs for
Shire</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,310</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued clinical
trials</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,484</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued professional
service fees</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,099</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued contract
manufacturing and <font style="WHITE-SPACE: nowrap">non-clinical</font> costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,035</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued compensation and
related benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,294</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total accrued
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,912</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,180</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
-1000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>8. Stock-Based
Compensation</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Equity
Incentive Plans</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, the Company adopted the 2018 Equity
Incentive Plan (the “2018 Plan”) which permits the
granting of stock awards and incentive and nonstatutory stock
options to employees, directors and consultants of the
Company.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In July 2019,
the Company’s board of directors and stockholders approved
and adopted the 2019 Equity Incentive Plan (the “2019
Plan”). The 2019 Plan became effective on July 17, 2019.
Under the 2019 Plan, the Company may grant stock options, stock
appreciation rights, restricted stock, restricted stock units and
other stock or cash-based awards to individuals who are then
employees, officers, directors or consultants of the Company. A
total of 1,401,443 shares of common stock were approved to be
initially reserved for issuance under the 2019 Plan, including
101,443 shares that remained available for issuance under the 2018
Plan as of July 17, 2019. Shares subject to outstanding awards
under the 2018 Plan as of the effective date of the 2019 Plan that
are subsequently canceled, forfeited or repurchased by the Company
will be added to the shares reserved under the 2019 Plan. In
addition, the number of shares of common stock available for
issuance under the 2019 Plan will be automatically increased on the
first day of each calendar year during the <font style="WHITE-SPACE: nowrap">ten-year</font> term of the 2019 Plan,
beginning with January 1, 2020 and ending with January 1,
2029, by an amount equal to 5% of the outstanding number of shares
of the Company’s common stock on December 31st of the
preceding calendar year or such lesser amount as determined by the
Company’s board of directors. As of September 30, 2019,
1,272,443 shares of common stock were available for issuance under
the 2019 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Stock
Options</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The fair value
of each employee <font style="WHITE-SPACE: nowrap">and non-employee stock</font>
option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. Prior to its IPO, the Company
was a private company and lacked company-specific historical and
implied volatility information. Therefore, it estimated its
expected volatility based on the historical volatility of a
publicly traded set of peer companies. Due to the lack of
historical exercise history, the expected term of the
Company’s stock options for employees has been determined
utilizing the “simplified” method for awards. The
risk-free interest rate is determined by reference to the
U.S. Treasury yield curve in effect at the time of grant of
the award for time periods approximately equal to the expected term
of the award. Expected dividend yield is zero based on the fact
that the Company has never paid cash dividends and does not expect
to pay any cash dividends in the foreseeable future.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">No stock
options were granted for the period from May 2, 2018 to
September 30, 2018. The following assumptions were used to
estimate the fair value of stock option awards granted during the
following periods:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Three Months Ended<br />
September 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Nine Months Ended<br />
September 30,</b></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Exercise price</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$9.86-$15.00</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$2.94-$15.00</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected term (in
years)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">6.0-6.3</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">6.0-6.3</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">75.31%-75.98%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">73.88%-75.98%</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Risk-free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">1.46%-1.89%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">1.46%-2.46%</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Grant date fair value of
options granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$6.62-$10.01</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">$6.62-$10.46</font></font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table summarizes stock option activity during the nine months ended
September 30, 2019 (in thousands, except share and per share
data):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="62%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Number of</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Shares</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Weighted-</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Average</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Exercise</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Weighted-</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Average</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Remaining</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Contractual</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Life</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>(in Years)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Aggregate</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Intrinsic</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Outstanding as of
December 31, 2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4.98</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Exercised</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Canceled and
forfeited</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Outstanding as of
September 30, 2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4.98</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,292</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Vested and exercisable as
of September 30, 2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,465</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2.94</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
September 30, 2019, the total unrecognized stock-based
compensation related to unvested stock option awards granted was
$23.2 million, which the Company expects to recognize over a
weighted-average period of approximately 3.4 years.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Restricted Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, in connection with the issuance of the
Series A Preferred Stock, the Company’s founders agreed to
modify their outstanding shares of common stock to include vesting
provisions that require continued service to the Company in order
to vest in those shares. As such, the 562,500 modified shares of
common stock became compensatory upon such modification. The total
compensation cost resulting from the modification was
$1.7 million. The modified shares have a four-year vesting
period and a measurement date fair value of $2.936 per share. For
the three and nine months ended September 30, 2019, 33,398 and
101,952 shares vested, respectively. As of September 30, 2019,
the total unrecognized compensation expense related to unvested
restricted stock was $1.2 million expected to be recognized
over a weighted-average period of approximately 3.2
years.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Stock-based
compensation expense is reflected in the unaudited condensed
consolidated statements of operations (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Three Months<br />
Ended<br />
September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Nine Months Ended<br />
September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,314</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,464</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">830</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,539</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,144</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,003</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>2019
Employee Stock Purchase Plan</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In July 2019,
the Company’s board of directors and stockholders approved
and adopted the 2019 Employee Stock Purchase Plan (the
“ESPP”). The ESPP became effective on July 17,
2019. A total of 500,000 shares of common stock were approved to be
initially reserved for issuance under the ESPP. In addition, the
number of shares of common stock available for issuance under the
ESPP will be automatically increased on the first day of each
calendar year during the first <font style="WHITE-SPACE: nowrap">ten-years</font> of the term of the ESPP,
beginning with January 1, 2020 and ending with January 1,
2029, by an amount equal to the lessor of (i) 1% of the outstanding
number of shares of common stock on December 31st of the preceding
calendar year, (ii) 1,500,000 shares of common stock or
(iii) such lesser amount as determined by the Company’s
board of directors. The Company had 500,000 shares available for
future issuance under the 2019 ESPP as of September 30,
2019.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>2. Summary of
Significant Accounting Policies</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Basis of
Presentation</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”) for interim financial
information and pursuant to Form <font style="WHITE-SPACE: nowrap">10-Q</font> and Article 10 of Regulation
<font style="WHITE-SPACE: nowrap">S-X</font> of the Securities and
Exchange Commission (SEC). Accordingly, the accompanying unaudited
condensed consolidated financial statements do not include all of
the information and notes required by GAAP for complete financial
statements. The unaudited interim financial statements reflect all
adjustments which, in the opinion of management, are necessary for
a fair statement of the results for the periods presented. All such
adjustments are of a normal and recurring nature. The unaudited
condensed consolidated balance sheet as of December 31, 2018
has been derived from the audited consolidated financial statements
at that date but does not include all information and footnotes
required by GAAP for complete financial statements. The operating
results presented in these unaudited condensed consolidated
financial statements are not necessarily indicative of the results
that may be expected for any future periods. These unaudited
condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
the notes thereto for the period from May 2, 2018 to
December 31, 2018 included in the Company’s prospectus
dated July 17, 2019 that forms a part of the Company’s
Registration Statement on Form <font style="WHITE-SPACE: nowrap">S-1</font> (File <font style="WHITE-SPACE: nowrap">No. 333-232251),</font> as filed with
the SEC pursuant to Rule 424(b)(4) promulgated under the Securities
Act of 1933, as amended, on July 18, 2019.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The preparation
of condensed consolidated financial statements in accordance with
GAAP requires management to make estimates and assumptions that
impact the reported amounts of assets, liabilities and expenses and
the disclosure of contingent assets and liabilities in the
financial statements and accompanying notes. The most significant
estimates in the Company’s unaudited condensed consolidated
financial statements relate to accrued research and development
expenses, the valuation of common stock, equity awards and the
valuation allowance of deferred tax assets resulting from net
operating losses. These estimates and assumptions are based upon
historical experience, knowledge of current events and various
other factors believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the
carrying values of assets and liabilities and the recording of
expenses that are not readily apparent from other sources. Actual
results could differ materially from those estimates.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Cash and
Cash Equivalents</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
considers all highly liquid investments with original maturities of
three months or less at the date of purchase to be cash
equivalents. The carrying amounts reported in the unaudited
condensed consolidated balance sheet for cash and cash equivalents
are valued at cost, which approximate their fair value. Cash
equivalents may consist of money market accounts, money market
funds, U.S. treasury bills and repurchase agreements.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
invests in certain reverse repurchase agreements, which are
collateralized by deposits in the form of U.S. Treasury Securities
for an amount no less than 102% of their value. The Company does
not record an asset or liability for the collateral as the Company
does not intend to sell or <font style="WHITE-SPACE: nowrap">re-pledge</font> the collateral. The
collateral has the prevailing credit rating of at least the U.S.
Government Treasuries and Agencies. The Company utilizes a
third-party custodian to manage the exchange of funds and ensure
that collateral received is maintained at 102% of the value of the
reverse repurchase agreements on a daily basis.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Investments</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
classifies all investments as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale,</font></font> as the sale
of such securities may be required prior to maturity. Management
determines the appropriate classification of its investments in
debt securities at the time of purchase. Investments with original
maturities beyond three months at the date of purchase and which
mature at, or less than twelve months from the balance sheet date,
are classified as a current asset.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Investments are
carried at fair value, with unrealized gains and losses reported as
accumulated other comprehensive income (loss) until realized. The
Company periodically evaluates whether declines in fair values of
its <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities
below their book value are other-than-temporary. This evaluation
consists of several qualitative and quantitative factors regarding
the severity and duration of the unrealized loss as well as the
Company’s ability and intent to hold the <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> security
until a forecasted recovery occurs. Additionally, the Company
assesses whether it has plans to sell the security or it is more
likely than not it will be required to sell any <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities
before recovery of its amortized cost basis. The cost of debt
securities is adjusted for amortization of premiums and accretion
of discounts to maturity. Such amortization and accretion, as well
as interest and dividends, are included in interest income.
Realized gains and losses from the sale of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities,
if any, are determined on a specific identification basis and are
also included in interest income.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The accounting
guidance defines fair value, establishes a consistent framework for
measuring fair value and expands disclosure for each major asset
and liability category measured at fair value on either a recurring
or nonrecurring basis. Fair value is defined as an exit price,
representing the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As
a basis for considering such assumptions, the accounting guidance
establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 1:
Observable inputs such as quoted prices in active
markets;</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 2:
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 3:
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The carrying
amounts of all cash equivalents, investments, accounts payable and
accrued liabilities are reasonable estimates of their fair
value.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">There were no
transfers between Levels 1, 2 or 3 for the periods
presented.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Property
and Equipment</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Property and
equipment are recorded at cost less accumulated depreciation,
ranging from three to five years. Leasehold improvements are
amortized over the shorter of their useful lives or the related
lease term. As of September 30, 2019, and December 31,
2018, property and equipment consisted primarily of leasehold
improvements of $0.5 million and zero, respectively.
Accumulated depreciation as of September 30, 2019 and
December 31, 2018 was $0.1 million and zero,
respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Accrued
Research and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accrues and expenses clinical trial activities performed by third
parties based upon estimates of the proportion of work completed
over the life of the individual study and patient enrollment rates
in accordance with agreements established with clinical research
organizations and clinical trial sites. The Company determines the
estimates by reviewing contracts, vendor agreements and purchase
orders and through discussions with internal clinical personnel and
external service providers as to the progress or stage of
completion of trials or services and the agreed-upon fee to be paid
for such services.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
makes estimates of accrued expenses as of each balance sheet date
based on facts and circumstances known to the Company at that time.
If the actual timing of the performance of services or the level of
effort varies from the estimate, the Company will adjust the
accrual accordingly. The Company has not experienced any material
differences between accrued costs and actual costs incurred since
its inception. Nonrefundable advance payments for goods and
services are deferred and recognized as expense in the period that
the related goods are consumed or services are
performed.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Research
and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Research and
development expenses consist primarily of fees paid to contract
research organizations and other vendors for clinical, <font style="WHITE-SPACE: nowrap">non-clinical</font> and manufacturing
services, salaries and benefits, including stock-based compensation
expense, consultant expenses, costs related to acquiring
manufacturing materials, costs related to compliance with
regulatory requirements and license payments related to acquiring
intellectual property rights for the Company’s product
candidates. Research and development expenses are expensed as
incurred.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Leases</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In accordance
with Accounting Standards Update (“ASU”) <font style="WHITE-SPACE: nowrap">No. 2016-02,</font> as adopted on
January 1, 2019, the Company determines if an arrangement is a
lease at inception. Operating lease <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">right-of-use</font></font>
(“ROU”) assets represent the Company’s right to
use an underlying asset during the lease term, and operating lease
liabilities represent the Company’s obligation to make lease
payments arising from the lease. Operating leases are included in
ROU assets, current operating lease liabilities, and long-term
operating lease liabilities on our unaudited condensed consolidated
balance sheet.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Operating lease
ROU assets and lease liabilities are initially recognized based on
the present value of the future minimum lease payments over the
lease term at commencement date calculated using the
Company’s incremental borrowing rate applicable to the lease
asset, unless the implicit rate is readily determinable. Operating
lease ROU assets also include any lease payments made at or before
lease commencement and exclude any lease incentives received. The
Company determines the lease term as the noncancelable period of
the lease and may include options to extend or terminate the lease
when it is reasonably certain that the Company will exercise that
option. Leases with a term of 12 months or less are not recognized
on the unaudited condensed consolidated balance sheet. The
Company’s leases do not contain any residual value
guarantees. Lease expense for minimum lease payments is recognized
on a straight-line basis over the lease term.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Net Loss
Per Share</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Basic net loss
per share of common stock is computed by dividing net loss
attributable to common stockholders by the weighted-average number
of shares of common stock outstanding for the period, without
consideration for potentially dilutive securities. Diluted net loss
per share is computed by dividing the net loss attributable to
common stockholders by the weighted-average number of shares of
common stock and potentially dilutive securities outstanding for
the period determined using the treasury-stock and <font style="WHITE-SPACE: nowrap">if-converted</font> methods. Diluted net loss
per share excludes the potential impact of the Company’s
common stock subject to repurchase and common stock options because
their effect would be anti-dilutive due to the Company’s net
loss. Since the Company had a net loss in each of the periods
presented, basic and diluted net loss per common share were the
same.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
outstanding potentially dilutive shares have been excluded from the
calculation of diluted net loss per share for the periods presented
due to their anti-dilutive effect:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="86%"></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Options to purchase common
stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Common stock subject to
repurchase</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">423,047</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,629,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recently
Adopted Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
January 1, 2019, the Company adopted ASU <font style="WHITE-SPACE: nowrap">No. 2016-02</font><i>, Leases (Topic
842)</i>, which amended existing guidance to require substantially
all leases to be recognized by lessees on their balance sheet as a
ROU asset and corresponding lease liability, including leases
currently accounted for as operating leases, including qualitative
and quantitative disclosures. There was no impact on the
accompanying unaudited condensed consolidated financial statements
as of the adoption date, January 1, 2019.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Other recent
accounting pronouncements issued by the Financial Accounting
Standards Board (“FASB”) (including its Emerging Issues
Task Force), the American Institute of Certified Public
Accountants, and the SEC did not, or are not believed by management
to, have a material impact on the Company’s present or future
consolidated financial position, results of operations or cash
flows.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recent
Accounting Pronouncements Not Yet Adopted</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In June 2016,
the FASB issued ASU No. <font style="WHITE-SPACE: nowrap">2016-13,</font><i> Financial
Instruments—Credit Losses (Topic 326)</i>. The standard
changes how entities will measure credit losses for most financial
assets and certain other instruments that are not measured at fair
value through net income. Financial assets measured at amortized
cost will be presented at the net amount expected to be collected
by using an allowance for credit losses. In April 2019, the FASB
issued ASU <font style="WHITE-SPACE: nowrap">No. 2019-04,</font> <i>Codification
Improvements to Topic 326, Financial Instruments—Credit
Losses, Topic 815, Derivatives and Hedging, and Topic 825,
Financial Instruments,</i> which clarifies and corrects certain
unintended applications of the guidance contained in each of the
amended Topics. Additionally, in May 2019, the FASB issued ASU
<font style="WHITE-SPACE: nowrap">No. 2019-05,</font>
<i>Financial Instruments—Credit Losses (Topic 326),</i> which
provides an option to irrevocably elect to measure certain
individual financial assets at fair value instead of amortized
cost. The standard is effective for fiscal years and interim
periods beginning after December 15, 2019. Early adoption is
permitted for all periods beginning after December 15, 2018.
The Company is currently in the process of evaluating the impact
the standard will have on its unaudited condensed consolidated
financial statements.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In August 2018,
the FASB issued ASU <font style="WHITE-SPACE: nowrap">No. 2018-13,</font> Fair Value
Measurement (Topic 820). The guidance eliminates the requirements
to disclose the amount and reasons for transfers between
Level 1 and Level 2 assets, the policy for timing and
transfers between levels and the valuation process for Level 3
fair value measurements. The guidance modifies disclosure
requirements for investments in certain entities that calculate net
asset value and clarifies the purpose of the measurement
uncertainty disclosure. The guidance adds requirements to disclose
changes in unrealized gains or losses included in other
comprehensive income for recurring Level 3 fair value
measurements and to disclose the range and weighted average used to
develop significant unobservable inputs for Level 3 fair value
measurements. The pronouncement is effective for fiscal years, and
for interim periods within those fiscal years, beginning after
December 15, 2019, with early adoption permitted. The Company
is currently in the process of evaluating the impact the standard
will have on its unaudited condensed consolidated financial
statements.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>11.
Subsequent Events</b></font></p>
<p style="MARGIN-BOTTOM: -6px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On January 1,
2020, the shares of common stock available under each of the 2019
Plan and ESPP were increased by 1,149,499 and 229,899 shares,
respectively, pursuant to the automatic increase provisions of the
respective plans.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In December
2019, the Company entered into an agreement related to its
corporate headquarters to add an additional 5,600 square feet to
its existing leased office space for a term of approximately 5
years as well as extend the term of the existing lease space
entered into in January 2019 by approximately 2 additional
years.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: 400; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In October,
November and December 2019 and January 2020, the Company granted an
aggregate of 260,000 shares of common stock options to its
employees at weighted average exercise price of $14.62 per
share.</font></p>
</div>
80000
-21149000
-25000
43000
0
-122637000
127177000
4003000
0
0
true
The lease term is approximately four years with an option to extend the term for one five-year term, which is not reasonably assured of exercise and therefore, not included in the lease term.
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The preparation
of condensed consolidated financial statements in accordance with
GAAP requires management to make estimates and assumptions that
impact the reported amounts of assets, liabilities and expenses and
the disclosure of contingent assets and liabilities in the
financial statements and accompanying notes. The most significant
estimates in the Company’s unaudited condensed consolidated
financial statements relate to accrued research and development
expenses, the valuation of common stock, equity awards and the
valuation allowance of deferred tax assets resulting from net
operating losses. These estimates and assumptions are based upon
historical experience, knowledge of current events and various
other factors believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the
carrying values of assets and liabilities and the recording of
expenses that are not readily apparent from other sources. Actual
results could differ materially from those estimates.</font></p>
</div>
59977000
67200000
214000
130923000
8500000
-25664000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>9. Leases</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In January
2019, the Company entered into an operating lease agreement for
office space which consists of approximately 5,600 square feet. The
lease term is approximately four years with an option to extend the
term for one five-year term, which is not reasonably assured of
exercise and therefore, not included in the lease term. The lease
additionally contains a tenant improvement allowance of
$0.4 million, which has been recorded in the accompanying
unaudited condensed consolidated balance sheet as of
September 30, 2019 as leasehold improvements with a
corresponding reduction of the ROU asset at inception of the lease.
In connection with this lease, the Company recognized an operating
lease ROU asset of $0.9 million as of September 30, 2019
and an aggregate lease liability of $1.5 million in the
accompanying balance sheet. The remaining lease term is 3.7 years,
and the estimated incremental borrowing rate is 8.0%. Rent payments
began in August 2019.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="87%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; DISPLAY: table-cell">
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Year Ending December 31,</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Undiscounted</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Rent 
Payments</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2019 (remaining three
months)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">108</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">436</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2022</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2023</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">215</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2024</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total undiscounted lease
payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,683</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Less: imputed
interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total lease
liability</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,456</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Rent expense
was $0.1 million and $0.2 million for the three and nine
months ended September 30, 2019, respectively. Variable lease
payments for operating expenses were immaterial for the three and
nine months ended September 30, 2019. There was a total
commitment of $0.4 million at September 30, 2019 related
to the short-term portion of the lease.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>10. Income
Taxes</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company did
not record tax expense for the periods of the three months ended
September 30, 2019 and 2018, the nine months ended
September 30, 2019, and for the period from May 2, 2018
to September 30, 2018, due to the Company’s loss
position and full valuation allowance.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>4. Financial
Instruments</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The fair value
and amortized cost of cash equivalents and <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> investments
by major security type are presented in the following table (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September 30, 2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Amortized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Gain</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Loss</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Estimated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Fair</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cash equivalents and
investments:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
fund</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. treasury
bills</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,966</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Corporate debt
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,471</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">99</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,570</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Commercial paper</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. government
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Asset back
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,926</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total cash equivalents and
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">127</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Classified as:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cash equivalents</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Short-term
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">95,445</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Long-term
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,300</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total cash equivalents and
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company did
not hold investments as of December 31, 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
September 30, 2019, the remaining contractual maturities
of <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> debt
securities were as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="91%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Estimated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Fair 
Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Due within one
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">95,445</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">One to two years</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">23,289</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Three years or
more</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,011</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">122,745</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">During the nine
months ended September 30, 2019, there have been no
significant realized gains or losses on <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> investments.
During the nine months ended September 30, 2019, the Company
did not recognize any other-than-temporary impairment
losses.</font></p>
</div>
-36085000
-4.47
-34503000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Stock-based
compensation expense is reflected in the unaudited condensed
consolidated statements of operations (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Three Months<br />
Ended<br />
September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Nine Months Ended<br />
September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,314</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,464</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">830</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,539</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,144</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,003</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table summarizes stock option activity during the nine months ended
September 30, 2019 (in thousands, except share and per share
data):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="62%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Number of</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Shares</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Weighted-</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Average</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Exercise</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Weighted-</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Average</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Remaining</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Contractual</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Life</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>(in Years)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Aggregate</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Intrinsic</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Outstanding as of
December 31, 2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4.98</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Exercised</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Canceled and
forfeited</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Outstanding as of
September 30, 2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4.98</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,292</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Vested and exercisable as
of September 30, 2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,465</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2.94</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
</div>
36085000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>3. Fair Value
Measurements</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Money market
funds and U.S. treasury bills are measured at fair value on a
recurring basis using quoted prices and are classified as
Level 1. Investments measured at fair value based on inputs
other than quoted prices that are derived from observable market
data are classified as Level 2.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Financial
assets and liabilities subject to fair value measurements on a
recurring basis and the level of inputs used in such measurements
by major security type are presented in the following table (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September 30, 2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Financial
assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
fund</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. treasury
bills</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Corporate debt
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,570</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,570</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Commercial paper</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. government
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Asset backed
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,689</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">108,772</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">There were no
financial assets and liabilities subject to fair value measurements
on a recurring basis as of December 31, 2018.</font></p>
</div>
124000
8079000
-199000
P3M
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recent
Accounting Pronouncements Not Yet Adopted</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In June 2016,
the FASB issued ASU No. <font style="WHITE-SPACE: nowrap">2016-13,</font><i> Financial
Instruments—Credit Losses (Topic 326)</i>. The standard
changes how entities will measure credit losses for most financial
assets and certain other instruments that are not measured at fair
value through net income. Financial assets measured at amortized
cost will be presented at the net amount expected to be collected
by using an allowance for credit losses. In April 2019, the FASB
issued ASU <font style="WHITE-SPACE: nowrap">No. 2019-04,</font> <i>Codification
Improvements to Topic 326, Financial Instruments—Credit
Losses, Topic 815, Derivatives and Hedging, and Topic 825,
Financial Instruments,</i> which clarifies and corrects certain
unintended applications of the guidance contained in each of the
amended Topics. Additionally, in May 2019, the FASB issued ASU
<font style="WHITE-SPACE: nowrap">No. 2019-05,</font>
<i>Financial Instruments—Credit Losses (Topic 326),</i> which
provides an option to irrevocably elect to measure certain
individual financial assets at fair value instead of amortized
cost. The standard is effective for fiscal years and interim
periods beginning after December 15, 2019. Early adoption is
permitted for all periods beginning after December 15, 2018.
The Company is currently in the process of evaluating the impact
the standard will have on its unaudited condensed consolidated
financial statements.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In August 2018,
the FASB issued ASU <font style="WHITE-SPACE: nowrap">No. 2018-13,</font> Fair Value
Measurement (Topic 820). The guidance eliminates the requirements
to disclose the amount and reasons for transfers between
Level 1 and Level 2 assets, the policy for timing and
transfers between levels and the valuation process for Level 3
fair value measurements. The guidance modifies disclosure
requirements for investments in certain entities that calculate net
asset value and clarifies the purpose of the measurement
uncertainty disclosure. The guidance adds requirements to disclose
changes in unrealized gains or losses included in other
comprehensive income for recurring Level 3 fair value
measurements and to disclose the range and weighted average used to
develop significant unobservable inputs for Level 3 fair value
measurements. The pronouncement is effective for fiscal years, and
for interim periods within those fiscal years, beginning after
December 15, 2019, with early adoption permitted. The Company
is currently in the process of evaluating the impact the standard
will have on its unaudited condensed consolidated financial
statements.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>5. Accrued
Expenses</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Accrued
expenses consists of the following (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="78%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September 30,<br />
2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31,<br />
2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued costs for
Shire</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,310</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued clinical
trials</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,484</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued professional
service fees</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,099</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued contract
manufacturing and <font style="WHITE-SPACE: nowrap">non-clinical</font> costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,035</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued compensation and
related benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,294</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total accrued
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,912</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,180</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>7. Stockholders’
Equity (Deficit)</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In connection
with the Company’s IPO, all of the outstanding shares of the
Company’s Series A Preferred Stock automatically converted
into 14,969,118 shares of common stock and the 1,859,151 shares of
the Company’s redeemable common stock classified in mezzanine
equity were reclassified to permanent equity due to the expiration
of the deemed redemption feature associated with the
stock.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Common
Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In August and
October 2018, the Company issued 1,187,500 shares of common stock
as founder shares for services rendered to the Company, valued at
$0.0001 per share for consideration of approximately $950. On
November 5, 2018, in connection with the issuance of the
Series A Preferred Stock, vesting conditions were placed on 562,500
previously issued founder shares. These shares vest over 4 years
and are subject to repurchase by the Company in the event of
termination of services. Shares subject to repurchase are not
deemed, for accounting purposes, to be outstanding until those
shares vest. In April 2019, the Company repurchased 25,782 shares
of the common stock from a former employee in connection with
termination of employment.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
September 30, 2019 and December 31, 2018, 423,047 and
550,781 shares of common stock, respectively, were subject to
repurchase by the Company. The unvested stock liability related to
these shares is immaterial to all periods presented.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Each share of
common stock is entitled to one voting right. Common stockholders
are entitled to dividends when funds are legally available and
declared by the Board.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Common
Stock Reserved for Issuance</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Common stock
reserved for issuance is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of September 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Conversion of Series A
Preferred Stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,488,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Stock options issued and
outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,206,812</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Reserved for future stock
awards or option grants</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,272,443</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,859,151</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Reserved for employee stock
purchase plan</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">500,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,979,255</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,347,681</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Accrued
Research and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accrues and expenses clinical trial activities performed by third
parties based upon estimates of the proportion of work completed
over the life of the individual study and patient enrollment rates
in accordance with agreements established with clinical research
organizations and clinical trial sites. The Company determines the
estimates by reviewing contracts, vendor agreements and purchase
orders and through discussions with internal clinical personnel and
external service providers as to the progress or stage of
completion of trials or services and the agreed-upon fee to be paid
for such services.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
makes estimates of accrued expenses as of each balance sheet date
based on facts and circumstances known to the Company at that time.
If the actual timing of the performance of services or the level of
effort varies from the estimate, the Company will adjust the
accrual accordingly. The Company has not experienced any material
differences between accrued costs and actual costs incurred since
its inception. Nonrefundable advance payments for goods and
services are deferred and recognized as expense in the period that
the related goods are consumed or services are
performed.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>6. Asset
Acquisitions</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Assignment and License Agreement with Shire International
GmbH</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, the Company entered into an Assignment and
License Agreement (the “Shire Agreement”) with Shire
International GmbH (“Shire”). Under the terms of the
Shire Agreement, Shire granted the Company an exclusive, royalty
bearing worldwide license to develop and commercialize its two
product candidates, maralixibat and volixibat. As part of the Shire
Agreement, the Company was assigned license agreements held by
Shire with Satiogen Pharmaceuticals, Inc. (“Satiogen”),
Pfizer Inc. (“Pfizer”) and Sanofi-Aventis Deutschland
GmbH (“Sanofi”). The Company has the right to
sublicense under the Shire Agreement and additionally has the right
to sublicense under the Satiogen, Pfizer and Sanofi licenses
subject to the terms of those license agreements.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In
consideration for the rights granted to the Company under the Shire
Agreement, the Company made an upfront payment to Shire on
November 5, 2018 of $7.5 million and issued Shire
1,859,151 shares of its redeemable common stock with an estimated
fair value of $7.0 million, or $3.76 per share. The fair
value of the shares was determined using an option pricing model
with key assumptions as of the date of issuance including the
probabilities of liquidity scenarios, enterprise value, time to
liquidity, risk-free interest rates, volatility and discount for
lack of marketability.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accounted for the transaction as an asset acquisition as
substantially all of the fair value of the gross assets acquired
were concentrated in a group of similar identifiable assets thus
satisfying the requirements of the screen test in ASU <font style="WHITE-SPACE: nowrap">2017-01.</font> The assets acquired in the
transaction were measured based on the upfront payment to Shire and
the fair value of the common stock shares issued to Shire, as the
fair value of the consideration given was more readily determinable
than the fair value of the assets received. Because the assets had
not yet received regulatory approval and have no alternative future
use, the fair value attributable to these assets were initially
recorded as in process research and development
expenses.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company is
also obligated to pay Shire up to an aggregate of
$109.5 million upon the achievement of certain clinical
development and regulatory milestones for maralixibat in certain
indications and an additional $25.0 million upon regulatory
approval of maralixibat for each and every other indication. In
addition, the Company is required to pay up to an aggregate of
$30.0 million upon the achievement of certain clinical
development and regulatory milestones for volixibat solely for the
first indication sought. Upon commercialization, the Company is
obligated to pay Shire product sales milestones on total licensed
products up to an aggregate of $30.0 million. The Company is
also obligated to pay tiered royalties with rates ranging from low
double-digits to <font style="WHITE-SPACE: nowrap">mid-teens</font>
based upon annual worldwide net sales for all licensed products;
however, these royalties are reduced in part by royalties due under
the Satiogen and Sanofi licenses, as discussed below, related to
maralixibat and volixibat, as applicable. The Company’s
royalty obligations will continue on a licensed <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product and
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">country-by-country</font></font> basis until
the later to occur of the expiration of the last valid claim in a
licensed patent covering the applicable licensed product in such
country, expiration of any regulatory exclusivity for the licensed
product in a country and ten years after the first commercial sale
of a licensed product in such country. In July 2019, the Company
achieved a development milestone related to the initiation of the
Phase 3 MARCH-PFIC clinical trial and made a $2.5 million
payment to Shire. As of September 30, 2019, no additional
milestones had been accrued as there were no other potential
milestones yet considered probable.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Concurrent with
the Shire Agreement, the Company also entered into a Transition
Services Agreement (“TSA”) with Shire, which covers
services provided by Shire to transfer the research and development
activities and the related <font style="WHITE-SPACE: nowrap">know-how</font> from Shire to the Company,
including continuation of work on any existing clinical trials and
manufacturing activities until fully transferred. As of
June 30, 2019, all transition services were completed as well
as settlement of any pass-through costs. The Company recorded
$0.4 million for services provided by Shire under the TSA for
the nine months ended September 30, 2019. Additionally, the
Company recorded a reduction of estimated expenses of
$0.1 million for pass-through costs related to continuation of
work on existing clinical trials and manufacturing activities for
the nine months ended September 30, 2019. The reduction of
estimated expenses for the nine months ended September 30,
2019 was related to a final reconciliation of expenses and
agreement on final amounts due to Shire. There were no expenses for
Shire provided services or pass-through costs recorded for the
three months ended September 30, 2019, September 30, 2018
and for the period from May 2, 2018 to September 30,
2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
September 30, 2019, there was no accrued expenses for these
services. As of December 31, 2018, $2.1 million was
recorded in accrued expenses on the consolidated balance sheets for
these services.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Satiogen
License</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Through the
Shire Agreement, the Company was assigned a license agreement with
Satiogen pursuant to which the Company obtained an exclusive,
worldwide license to certain patents and <font style="WHITE-SPACE: nowrap">know-how,</font> with the right to sublicense
to a third party subject to certain financial considerations. The
Company is obligated to pay to Satiogen up to an aggregate of
$10.5 million upon the achievement of certain milestones, of
which $0.5 million was for initiation of certain development
activities, $5.0 million for the completion of regulatory
approvals and $5.0 million for commercialization activities.
Additionally, the Company will be required to pay a low
single-digit royalty on net sales. The Company’s royalty
obligations continue on a licensed <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product and
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">country-by-country</font></font> basis until
the expiration of the last valid claim in a licensed patent
covering the applicable licensed product in such country. Royalty
obligations under the Satiogen license are creditable against the
royalty obligations to Shire under the Shire Agreement. In July
2019, the Company achieved a development milestone related to the
initiation of the Phase 3 MARCH-PFIC clinical trial and made a
$0.5 million payment to Satiogen. As of September 30,
2019, no additional milestones had been accrued as there were no
other potential milestones yet considered probable.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Pfizer
License</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Through the
Shire Agreement, the Company was assigned a license agreement with
Pfizer pursuant to which the Company obtained an exclusive,
worldwide license to certain Pfizer <font style="WHITE-SPACE: nowrap">know-how</font> with a right to sublicense.
Upon commercialization of any product utilizing the licensed
product, the Company will be required to pay to Pfizer a low
single-digit royalty on net sales of product sold by the Company,
its affiliates or sublicensees. The Company’s royalty
obligations continue on a licensed <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product
basis until the eighth anniversary of the first commercial sale of
such licensed product anywhere in the world.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Sanofi
License</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Through the
Shire Agreement, the Company was assigned a license agreement with
Sanofi pursuant to which the Company obtained an exclusive,
worldwide license to certain patents and <font style="WHITE-SPACE: nowrap">know-how</font> with the right to sublicense
to a third party subject to certain financial considerations. The
Company is obligated to pay up to an aggregate of
$36.0 million upon the achievement of certain regulatory,
commercialization and product sales milestones. Additionally, upon
commercialization, the Company is required to pay tiered royalties
in the mid to high single-digit range based upon net sales of
licensed products sold by the Company and sublicensees in a
calendar year, subject to adjustments in certain circumstances. The
Company’s royalty obligations continue on a licensed
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product and
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">country-by-country</font></font> basis until
the later to occur of the expiration of the last valid claim in a
licensed patent covering the applicable licensed product in such
country and ten years after the first commercial sale of a licensed
product in such country. Royalty obligations under the Sanofi
license are creditable against the royalty obligations to Shire
under the Shire Agreement. As of September 30, 2019, no
milestones had been accrued as there were no potential milestones
yet considered probable.</font></p>
</div>
13000
33000
1485000
6990000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The fair value
and amortized cost of cash equivalents and <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> investments
by major security type are presented in the following table (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>September 30, 2019</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Amortized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Gain</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Loss</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Estimated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Fair</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cash equivalents and
investments:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
fund</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. treasury
bills</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,966</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,973</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Corporate debt
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,471</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">99</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,570</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Commercial paper</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,777</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. government
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,482</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Asset back
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,926</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total cash equivalents and
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">127</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Classified as:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cash equivalents</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">28,716</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Short-term
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">95,445</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Long-term
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,300</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total cash equivalents and
investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">151,461</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
Each share of common stock is entitled to one voting right.
1
100000
400000
0
0
0
P9Y6M
P3Y2M24D
0.00
P9Y7M6D
0.7388
0.7598
0.0146
0.0246
4.98
3206812
0
2.94
15
P9Y7M6D
10.46
P6Y3M18D
6.62
P6Y
P3Y2M12D
101952
500000
1539000
2464000
P5Y
P3Y
1.02
3206812
423047
14.62
260000
2.936
1426875
P4Y
2.936
1426875
P4Y
25782
1320104
500000
2500000
A total of 1,401,443 shares of common stock were approved to be initially reserved for issuance under the 2019 Plan, including 101,443 shares that remained available for issuance under the 2018 Plan as of July 17, 2019. Shares subject to outstanding awards under the 2018 Plan as of the effective date of the 2019 Plan that are subsequently canceled, forfeited or repurchased by the Company will be added to the shares reserved under the 2019 Plan. In addition, the number of shares of common stock available for issuance under the 2019 Plan will be automatically increased on the first day of each calendar year during the ten-year term of the 2019 Plan, beginning with January 1, 2020 and ending with January 1, 2029, by an amount equal to 5% of the outstanding number of shares of the Company’s common stock on December 31st of the preceding calendar year or such lesser amount as determined by the Company’s board of directors. As of September 30, 2019, 1,272,443 shares of common stock were available for issuance under the 2019 Plan.
2029-01-01
P10Y
0.05
2020-01-01
A total of 500,000 shares of common stock were approved to be initially reserved for issuance under the ESPP. In addition, the number of shares of common stock available for issuance under the ESPP will be automatically increased on the first day of each calendar year during the first ten-years of the term of the ESPP, beginning with January 1, 2020 and ending with January 1, 2029, by an amount equal to the lessor of (i) 1% of the outstanding number of shares of common stock on December 31st of the preceding calendar year, (ii) 1,500,000 shares of common stock or (iii) such lesser amount as determined by the Company’s board of directors. The Company had 500,000 shares available for future issuance under the 2019 ESPP as of September 30, 2019.
2029-01-01
P10Y
500000
0.01
2020-01-01
14.62
260000
14.62
260000
14.62
260000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recently
Adopted Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In January
2017, the FASB issued ASU <font style="WHITE-SPACE: nowrap">No. 2017-01,</font> <i>Business
Combinations (Topic 805): Clarifying the</i> <i>Definition of a
Business</i> (“ASU <font style="WHITE-SPACE: nowrap">2017-01”).</font> The amendments in
this update clarify the definition of a business with the objective
of adding guidance to assist entities with evaluating whether
transactions should be accounted for as acquisitions (or disposals)
of assets or businesses. The definition of a business affects many
areas of accounting including acquisitions, disposals, goodwill,
and consolidation. The guidance is effective for fiscal periods
beginning after December 15, 2017, including interim periods
within those periods. The Company adopted ASU <font style="WHITE-SPACE: nowrap">2017-01</font> effective May 2018. The
adoption of this guidance did not have a material impact on its
consolidated financial statements and related
disclosures.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In May 2014,
the FASB issued ASU <font style="WHITE-SPACE: nowrap">No. 2014-09,</font> <i>Revenue from
Contracts with Customers</i>, which created a single,
principle-based revenue recognition model that will supersede and
replace nearly all existing GAAP revenue recognition guidance.
Entities will recognize revenue in a manner that depicts the
transfer of goods or services to customers at an amount that
reflects the consideration to which the entity expects to be
entitled to receive in exchange for those goods or services. The
model provides that entities follow five steps: (i) identify
the contract with a customer, (ii) identify the performance
obligations in the contract, (iii) determine the transaction
price, (iv) allocate the transaction price to the performance
obligations, and (v) recognize revenue. For nonpublic business
entities, the guidance becomes effective for annual reporting
periods beginning after December 15, 2018. The Company adopted
this guidance effective May 2018. The adoption of this guidance did
not have any impact on the accompanying consolidated financial
statements and related disclosures.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Concentrations of Credit Risk and <font style="WHITE-SPACE: nowrap">Off-Balance</font> Sheet
Risk</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
maintains its cash and cash equivalents deposited at financial
institutions in excess of federally insured deposit limits. Cash is
held on deposit in a major financial institution and is considered
subject to minimal credit risk.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Research
and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Research and
development expenses consist primarily of fees paid to contract
research organizations and other vendors for clinical, <font style="WHITE-SPACE: nowrap">non-clinical</font> and manufacturing
services, salaries and benefits, including stock-based compensation
expense, consultant expenses, costs related to acquiring
manufacturing materials, costs related to compliance with
regulatory requirements and license payments related to acquiring
intellectual property rights for the Company’s product
candidates. Research and development expenses are expensed as
incurred.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Income taxes
are recorded using the liability method, under which deferred tax
assets and liabilities are determined based on differences between
financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. Valuation
allowances are provided when the expected realization of the
deferred tax assets does not meet the <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> criteria. As a
result, deferred tax assets at the end of 2018 are subject to a
full valuation allowance.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accounts for uncertain tax positions in accordance with the
provisions of Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification
No. 740, Income Taxes (“ASC 740”). When uncertain
tax positions exist, the Company recognizes the tax benefit of tax
positions to the extent that the benefit would more likely than not
be realized assuming examination by the taxing authority. The
determination as to whether the tax benefit will more likely than
not be realized is based upon the technical merits of the tax
position as well as consideration of the available facts and
circumstances.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Interest and
penalties related to unrecognized tax benefits, if any, are
recorded as a component of income tax expense.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Cash and
Cash Equivalents</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
considers all highly liquid investments with original maturities of
three months or less at the date of purchase to be cash
equivalents. Cash and cash equivalents primarily represent funds
invested in readily available checking and saving accounts. The
carrying amounts reported in the consolidated balance sheet for
cash and cash equivalents are valued at cost, which approximate
their fair value.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Stock-Based Compensation Expense</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
recognizes stock-based compensation expense for all stock-based
awards to employees based on the grant-date fair value of the
award. All stock-based compensation costs are recorded in the
consolidated statement of operations and comprehensive loss based
upon the underlying employee’s role within the
Company.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Basis of
Presentation</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
Company’s consolidated financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) and
include all adjustments necessary for the fair presentation of the
Company’s financial position for the period
presented.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Net Loss
Per Share</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Basic net loss
per share of common stock is computed by dividing net loss
attributable to common stockholders by the weighted-average number
of shares of common stock outstanding for the period, without
consideration for potentially dilutive securities. Diluted net loss
per share is computed by dividing the net loss attributable to
common stockholders by the weighted-average number of shares of
common stock and potentially dilutive securities outstanding for
the period determined using the treasury-stock and <font style="WHITE-SPACE: nowrap">if-converted</font> methods. For purposes of
the diluted net loss per share calculation, shares of Series A
Preferred Stock are considered to be potentially dilutive
securities and are excluded from the calculation of diluted net
loss per share because their effect would be anti-dilutive to the
Company’s net loss. Therefore, basic and diluted net loss per
share were the same for the period presented due to the
Company’s net loss position.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Potentially
dilutive securities as of December 31, 2018 that have been
excluded in the calculation of diluted net loss per share because
to do so would be anti-dilutive are 7,488,530 shares of Series A
Preferred Stock (in common stock equivalent shares).</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Common stock
reserved for issuance is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of<br />
December 31,<br />
2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Conversion of preferred
stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,488,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Authorized for future stock
awards or option grants</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,859,151</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,347,681</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of the Company’s unrecognized tax benefits is
as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Increase related to current
year tax provision</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">116</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at the end of the
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">116</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The net loss
before taxes for the period of May 2, 2018 to
December 31, 2018 is as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Period from<br />
May 2, 2018 to<br />
December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. loss before
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(17,348</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign loss before
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Loss before income
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(17,348</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The accounting
guidance defines fair value, establishes a consistent framework for
measuring fair value and expands disclosure for each major asset
and liability category measured at fair value on either a recurring
or nonrecurring basis. Fair value is defined as an exit price,
representing the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As
a basis for considering such assumptions, the accounting guidance
establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 1:
Observable inputs such as quoted prices in active
markets;</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 2:
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 3:
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The carrying
amounts of all cash equivalents, accounts payable and accrued
liabilities are reasonable estimates of their fair value because of
the short nature of these items.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2018, the Company had $51.5 million in
Level 1 assets consisting of cash equivalents. There were no
Level 2 or 3 balances nor transfers between levels within the
fair value hierarchy during the period presented.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>1. Organization and
Basis of Presentation</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Mirum
Pharmaceuticals, Inc. (the “Company”) was incorporated
in the State of Delaware on May 2, 2018, and is headquartered
in Foster City, California. The Company is a biopharmaceutical
company focused on the development and commercialization of a
late-stage pipeline of novel therapies for debilitating liver
diseases. The Company’s pipeline consists of two
clinical-stage product candidates, maralixibat and volixibat, with
mechanisms of action that have potential utility across a wide
range of orphan liver diseases. The Company commenced operations in
November 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Mirum Pharmaceuticals AG.
All intercompany balances and transactions among the consolidated
entity have been eliminated in consolidation.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In July 2019,
the Company effected a 1-for-8 reverse stock split of its common
stock. The par value and the authorized number of shares of the
common stock were not adjusted as a result of the reverse stock
split. The reverse stock split resulted in an adjustment to the
Series A Preferred Stock conversion price to reflect a proportional
decrease in the number of shares of common stock to be issued upon
conversion. The accompanying consolidated financial statements and
notes to the consolidated financial statements give retroactive
effect to the reverse stock split for all periods
presented.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Liquidity
and Capital Resources</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company has
a limited operating history, has incurred significant operating
losses since its inception and the revenue and income potential of
the Company’s business and market are unproven. As of
December 31, 2018, the Company had an accumulated deficit of
$17.3 million. Since its inception, the Company has funded its
operations primarily through equity financings. The Company raised
net proceeds of $59.8 million in 2018 through an equity
financing involving the sale of the Company’s Series A
redeemable convertible preferred stock (the “Series A
Preferred Stock”). Due to the Company’s continuing
research and development activities, the Company expects to
continue to incur net losses into the foreseeable future and may
never become profitable. As a result, the Company will need to
raise capital through public or private equity or debt financings,
government or other third-party funding, collaborations, strategic
alliances and licensing arrangements or a combination of these.
Successful transition to attaining profitable operations is
dependent upon achieving a level of revenues adequate to support
the Company’s cost structure.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Management
believes that the Company has sufficient working capital on hand to
fund operations through at least the next twelve months from the
date these consolidated financial statements were available to be
issued. There can be no assurance that the Company will be
successful in acquiring additional funding, that the
Company’s projections of its future working capital needs
will prove accurate, or that any additional funding would be
sufficient to continue operations in future years. If the Company
is not able to secure adequate additional funding, the Company may
be forced to make reductions in spending, extend payment terms with
suppliers, liquidate assets where possible, and/or suspend or
curtail planned programs. Any of these actions could materially
harm the Company’s business, results of operations, and
future prospects.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>5. Redeemable
Convertible Preferred Stock, Redeemable Common Stock and
Stockholders’ Deficit</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Series A
Preferred Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, the Company entered into a Series A
Preferred Stock Purchase Agreement with various investors for
issuance of up to 119,752,983 shares of Series A Preferred Stock at
a purchase price of $1.00259507 per share. In an initial closing,
the Company issued 59,908,284 shares of Series A Preferred Stock at
$1.00259507 per share, for approximately $59.8 million in cash
and the conversion of approximately $51,014 in principal and
accrued interest under the Note (see Note 4, Convertible Note
Financing).</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Certain
investors agreed to purchase up to an additional 59,844,699 shares
of Series A Preferred Stock at a subsequent closing under the same
terms (the “Second Closing”) upon the approval of the
Board, including a majority of the directors elected by the holders
of the Series A Preferred Stock. One foreign investor has the right
to defer its participation of 7,480,590 shares in the Second
Closing until certain conditions are met. If any one of the
investors fails to purchase these shares at the Second Closing,
each share of Series A Preferred Stock held by such investor will
automatically be converted into <font style="WHITE-SPACE: nowrap">one-tenth</font> of one share of the
Company’s common stock.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The holders of
the Series A Preferred Stock issued in the initial closing are
precluded from a voluntary conversion into shares of common stock
until the Second Closing except upon the occurrence of a deemed
liquidation event.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
April 12, 2019, the Second Closing of Series A Preferred Stock
was completed for issuance of 59,844,699 shares and cash proceeds
of $60.0 million.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Dividend
Provisions</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The holders of
each outstanding share of Series A Preferred Stock are entitled to
receive annual, noncumulative dividends of 8% of the applicable
original issuance price per share when, as and if declared by the
Board, in preference to any distribution to the holders of the
common stock. Any additional dividends or distributions will be
distributed among all holders of common stock and preferred stock
in proportion to the number of shares of common stock held by each
such holder if all shares of preferred stock were converted to
common stock. No dividends have been declared as of
December 31, 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Liquidation Preference</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In the event of
a liquidation or <font style="WHITE-SPACE: nowrap">winding-up</font> of the affairs of the
Company, including sale or transfer of control of the Company, the
holders of the Series A Preferred Stock are entitled, in preference
to any distribution to the holders of common stock, the greater of
the original issuance price plus declared and unpaid dividends or
such amount per share as would have been payable had all shares
converted to common stock pursuant to the conversion terms of the
Series A Preferred Stock. Thereafter, the remaining assets of the
Company legally available for distribution, if any, shall be
distributed ratably to the holders of the common stock.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Conversion</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Each share of
preferred stock is convertible, at the option of the stockholder,
into shares of common stock at any time after the date of issuance
into a number of shares of common stock as is determined by
dividing (a) the original issue price by (b) the
applicable conversion price as such values are set forth in the
Company’s certificate of incorporation. The resulting initial
per share conversion rate is one share of common stock for each
share of Series A Preferred Stock, as adjusted for stock splits,
recapitalizations and certain other events.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Each share
shall automatically convert upon (1) the closing of a
firm-commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933,
as amended, resulting in at least $50.0 million of gross
proceeds to the Company and a price of $16.0415 per share, as
adjusted for stock splits, recapitalizations and certain other
events or (2) an election of holders of a majority of the then
outstanding shares of the Series A Preferred Stock on an
<font style="WHITE-SPACE: nowrap">as-converted</font>
basis.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Voting</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The holder of
each of share of Series A Preferred Stock is entitled to one vote
for each share of common stock into which it would
convert.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Presentation of Series A Preferred
Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Series A
Preferred Stock has been classified outside of stockholders’
equity (deficit) as temporary equity on the accompanying
consolidated balance sheet because the shares contain certain
redemption features that are not solely within the control of the
Company. The Series A Preferred Stock is not generally redeemable;
however, upon certain change in control events that are outside of
the Company’s control, including liquidation, sale or
transfer of control of the Company, holders of the Series A
Preferred Stock may have the right to receive its liquidation
preference under the terms of the Company’s certificate of
incorporation. The Company is not adjusting the carrying value of
the Series A Preferred Stock as it is uncertain whether or when a
redemption event will occur.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Redeemable Common Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In connection
with the Shire License Agreement, the Company entered into a common
stock issuance agreement (the “Common Stock Agreement”)
with Shire and issued 1,859,151 shares of the Company’s
common stock (the “Shire Stock”), or 15% of the
Company’s outstanding fully diluted shares issued as of
December 31, 2018. Pursuant to the terms of the Common Stock
Agreement, (1) in the event of an initial public offering
prior to the occurrence of certain liquidation events, if
Shire’s ownership of the Company’s common stock is less
than 5% of the outstanding fully diluted shares of common stock
immediately prior to the consummation of the IPO, the Company will
issue additional shares of common stock to increase Shire’s
ownership to 5% of the then-outstanding fully diluted shares, and
(2) in the event that certain liquidation events occur prior
to an initial public offering and Shire’s ownership is less
than 5% of the then outstanding fully diluted shares of common
stock, Shire is entitled to receive additional proceeds, if needed,
to equal 5% of proceeds available for distribution to the Companies
security holders.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Shire Stock
has been classified outside of stockholders’ equity (deficit)
as temporary equity on the accompanying consolidated balance sheet
because these features are deemed for accounting purposes to
contain certain redemption features that may be triggered in the
event of certain liquidation events that are not solely in the
control of the Company. The Company is not adjusting the carrying
value of the redeemable common stock as it is uncertain whether or
when a redemption event will occur.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Common
Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In August and
October 2018, the Company issued 1,187,500 shares of common stock
as founder shares for services rendered to the Company, valued at
$0.0001 per share for consideration of approximately $950. On
November 5, 2018, in connection with the issuance of the
Series A Preferred Stock, vesting conditions were placed on 562,500
previously issued founder shares. These shares vest over 4 years
and are subject to repurchase by the Company in the event of
termination of services. Shares subject to repurchase are not
deemed, for accounting purposes, to be outstanding until those
shares vest. As of December 31, 2018, 550,781 shares of common
stock were subject to repurchase by the Company. The unvested stock
liability related to these shares is immaterial as of
December 31, 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Each share of
common stock is entitled to one voting right. Common stock holders
are entitled to dividends when funds are legally available and
declared by the Board.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Common
Stock Reserved for Issuance</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Common stock
reserved for issuance is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>As of<br />
December 31,<br />
2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Conversion of preferred
stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,488,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Authorized for future stock
awards or option grants</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,859,151</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,347,681</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of the federal statutory income tax rate to the
Company’s effective income tax rate is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Period from<br />
May 2, 2018 to<br />
December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal statutory income
tax rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Tax credits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Change in valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(29.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total tax
benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of income tax expense for period of May 2, 2018
to December 31, 2018 is as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Period from<br />
May 2, 2018 to<br />
December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Current:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total current income tax
expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total deferred income tax
expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total income tax
expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>6. Stock
Options</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Equity
Incentive Plans</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, the Company adopted the 2018 Equity
Incentive Plan (the “2018 Plan”) which authorizes up to
1,859,151 stock awards and incentive and nonstatutory stock options
to employees, directors and consultants of the Company. Contingent
upon the Second Closing of the Series A Preferred Stock, the shares
reserved for issuance under the 2018 Plan will automatically
increase by 1,320,104 shares for a total of 3,179,255 shares. As of
December 31, 2018, no awards had been granted under the 2018
Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Restricted Stock</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, in connection with the issuance of the
Series A Preferred Stock, the Company placed vesting conditions on
562,500 previously issued founder shares with four year vesting and
a measurement date fair value of $2.936 per share. For the period
of May 2, 2018 to December 31, 2018, 11,719 vested and
the Company recognized $34,000 in stock-based compensation expense
of which $26,000 and $8,000 were recorded as general and
administrative and research and development expenses, respectively.
At December 31, 2018, the total unrecognized compensation
expense related to unvested restricted stock was $1.6 million
expected to be recognized over a weighted-average period of
approximately 3.9 years.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>2. Summary of
Significant Accounting Policies</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Basis of
Presentation</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
Company’s consolidated financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) and
include all adjustments necessary for the fair presentation of the
Company’s financial position for the period
presented.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The preparation
of consolidated financial statements in accordance with GAAP
requires management to make estimates and assumptions that impact
the reported amounts of assets, liabilities and expenses and the
disclosure of contingent assets and liabilities in the financial
statements and accompanying notes. The most significant estimates
in the Company’s consolidated financial statements relate to
accrued research and development expenses, the valuation of common
stock, equity awards and the valuation allowance of deferred tax
assets resulting from net operating losses. These estimates and
assumptions are based on the historical experience, knowledge of
current events and various other factors believed to be reasonable
under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and
liabilities and the recording of expenses that are not readily
apparent from other sources. Actual results could differ materially
from those estimates.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Segment
Reporting</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Operating
segments are identified as components of an enterprise about which
separate discrete financial information is available for evaluation
by the chief operating decision-maker in making decisions regarding
resource allocation and assessing performance. The Company views
its operations and manages its business in one operating
segment.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Cash and
Cash Equivalents</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
considers all highly liquid investments with original maturities of
three months or less at the date of purchase to be cash
equivalents. Cash and cash equivalents primarily represent funds
invested in readily available checking and saving accounts. The
carrying amounts reported in the consolidated balance sheet for
cash and cash equivalents are valued at cost, which approximate
their fair value.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Concentrations of Credit Risk and <font style="WHITE-SPACE: nowrap">Off-Balance</font> Sheet
Risk</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
maintains its cash and cash equivalents deposited at financial
institutions in excess of federally insured deposit limits. Cash is
held on deposit in a major financial institution and is considered
subject to minimal credit risk.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The accounting
guidance defines fair value, establishes a consistent framework for
measuring fair value and expands disclosure for each major asset
and liability category measured at fair value on either a recurring
or nonrecurring basis. Fair value is defined as an exit price,
representing the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As
a basis for considering such assumptions, the accounting guidance
establishes a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 1:
Observable inputs such as quoted prices in active
markets;</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 2:
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Level 3:
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The carrying
amounts of all cash equivalents, accounts payable and accrued
liabilities are reasonable estimates of their fair value because of
the short nature of these items.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2018, the Company had $51.5 million in
Level 1 assets consisting of cash equivalents. There were no
Level 2 or 3 balances nor transfers between levels within the
fair value hierarchy during the period presented.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Accrued
Research and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accrues and expenses clinical trial activities performed by third
parties based upon estimates of the proportion of work completed
over the life of the individual study and patient enrollment rates
in accordance with agreements established with clinical research
organizations and clinical trial sites. The Company determines the
estimates by reviewing contracts, vendor agreements and purchase
orders and through discussions with internal clinical personnel and
external service providers as to the progress or stage of
completion of trials or services and the agreed-upon fee to be paid
for such services.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
makes estimates of accrued expenses as of each balance sheet date
based on facts and circumstances known to the Company at that time.
If the actual timing of the performance of services or the level of
effort varies from the estimate, the Company will adjust the
accrual accordingly. The Company has not experienced any material
differences between accrued costs and actual costs incurred since
its inception. Nonrefundable advance payments for goods and
services, including fees for process development or manufacturing
and distribution of clinical supplies that will be used in future
research and development activities, are deferred and recognized as
expense in the period that the related goods are consumed or
services are performed.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Research
and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Research and
development expenses consist primarily of fees paid to contract
research organizations and other vendors for clinical, <font style="WHITE-SPACE: nowrap">non-clinical</font> and manufacturing
services, salaries and benefits, including stock-based compensation
expense, consultant expenses, costs related to acquiring
manufacturing materials, costs related to compliance with
regulatory requirements and license payments related to acquiring
intellectual property rights for the Company’s product
candidates. Research and development expenses are expensed as
incurred.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Stock-Based Compensation Expense</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
recognizes stock-based compensation expense for all stock-based
awards to employees based on the grant-date fair value of the
award. All stock-based compensation costs are recorded in the
consolidated statement of operations and comprehensive loss based
upon the underlying employee’s role within the
Company.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Income taxes
are recorded using the liability method, under which deferred tax
assets and liabilities are determined based on differences between
financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. Valuation
allowances are provided when the expected realization of the
deferred tax assets does not meet the <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> criteria. As a
result, deferred tax assets at the end of 2018 are subject to a
full valuation allowance.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accounts for uncertain tax positions in accordance with the
provisions of Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification
No. 740, Income Taxes (“ASC 740”). When uncertain
tax positions exist, the Company recognizes the tax benefit of tax
positions to the extent that the benefit would more likely than not
be realized assuming examination by the taxing authority. The
determination as to whether the tax benefit will more likely than
not be realized is based upon the technical merits of the tax
position as well as consideration of the available facts and
circumstances.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Interest and
penalties related to unrecognized tax benefits, if any, are
recorded as a component of income tax expense.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Net Loss
Per Share</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Basic net loss
per share of common stock is computed by dividing net loss
attributable to common stockholders by the weighted-average number
of shares of common stock outstanding for the period, without
consideration for potentially dilutive securities. Diluted net loss
per share is computed by dividing the net loss attributable to
common stockholders by the weighted-average number of shares of
common stock and potentially dilutive securities outstanding for
the period determined using the treasury-stock and <font style="WHITE-SPACE: nowrap">if-converted</font> methods. For purposes of
the diluted net loss per share calculation, shares of Series A
Preferred Stock are considered to be potentially dilutive
securities and are excluded from the calculation of diluted net
loss per share because their effect would be anti-dilutive to the
Company’s net loss. Therefore, basic and diluted net loss per
share were the same for the period presented due to the
Company’s net loss position.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Potentially
dilutive securities as of December 31, 2018 that have been
excluded in the calculation of diluted net loss per share because
to do so would be anti-dilutive are 7,488,530 shares of Series A
Preferred Stock (in common stock equivalent shares).</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recent
Accounting Pronouncements—To Be Adopted</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In February
2016, FASB issued Accounting Standards Update (“ASU”)
<font style="WHITE-SPACE: nowrap">2016-02</font><i>, Leases (Topic
842)</i> (“ASU <font style="WHITE-SPACE: nowrap">2016-02”),</font> which amends existing
guidance to require substantially all leases to be recognized by
lessees on their balance sheet as a <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">right-of-use</font></font> asset and
corresponding lease liability, including leases currently accounted
for as operating leases, including qualitative and quantitative
disclosures. ASU <font style="WHITE-SPACE: nowrap">2016-02</font>
is effective January 1, 2019 for the Company and will apply to
all annual and interim reporting periods thereafter. Early adoption
is permitted. The Company will adopt the new guidance beginning in
2019 and currently believes the most significant impact will be
related to the recognition of right of use assets and lease
liabilities on the Company’s consolidated balance sheet for
real estate operating leases.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recently
Adopted Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In January
2017, the FASB issued ASU <font style="WHITE-SPACE: nowrap">No. 2017-01,</font> <i>Business
Combinations (Topic 805): Clarifying the</i> <i>Definition of a
Business</i> (“ASU <font style="WHITE-SPACE: nowrap">2017-01”).</font> The amendments in
this update clarify the definition of a business with the objective
of adding guidance to assist entities with evaluating whether
transactions should be accounted for as acquisitions (or disposals)
of assets or businesses. The definition of a business affects many
areas of accounting including acquisitions, disposals, goodwill,
and consolidation. The guidance is effective for fiscal periods
beginning after December 15, 2017, including interim periods
within those periods. The Company adopted ASU <font style="WHITE-SPACE: nowrap">2017-01</font> effective May 2018. The
adoption of this guidance did not have a material impact on its
consolidated financial statements and related
disclosures.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In May 2014,
the FASB issued ASU <font style="WHITE-SPACE: nowrap">No. 2014-09,</font> <i>Revenue from
Contracts with Customers</i>, which created a single,
principle-based revenue recognition model that will supersede and
replace nearly all existing GAAP revenue recognition guidance.
Entities will recognize revenue in a manner that depicts the
transfer of goods or services to customers at an amount that
reflects the consideration to which the entity expects to be
entitled to receive in exchange for those goods or services. The
model provides that entities follow five steps: (i) identify
the contract with a customer, (ii) identify the performance
obligations in the contract, (iii) determine the transaction
price, (iv) allocate the transaction price to the performance
obligations, and (v) recognize revenue. For nonpublic business
entities, the guidance becomes effective for annual reporting
periods beginning after December 15, 2018. The Company adopted
this guidance effective May 2018. The adoption of this guidance did
not have any impact on the accompanying consolidated financial
statements and related disclosures.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>8. Subsequent
Events</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">For purposes of
the financial statements as of December 31, 2018 and the year
then ended, the Company evaluated subsequent events for recognition
and measurement purposes through April 18, 2019, the date the
financial statements were issued. Except as described below, the
Company has concluded that no events or transactions have occurred
that require disclosure.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
January 22, 2019, the Company entered into a four-year
agreement for the Company’s corporate headquarters for
approximately 5,600 square feet of office space. The lease term,
and allocated minimum lease payments which aggregate
$1.6 million over the initial term of four years, is expected
to commence <font style="WHITE-SPACE: nowrap">mid-May</font>
2019.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In March and
April 2019, the Company granted 1,426,875 shares of common stock
options to its employees at an exercise price of $2.936 per share.
The stock options generally vest over a four-year
period.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In connection
with the Second Closing, the common stock reserved for issuance
under the 2018 Plan increased by 1,320,104 shares to a total of
3,179,255 shares.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In April 2019,
the Company repurchased 25,782 shares of common stock from a former
employee in connection with termination of employment.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Significant
components of the Company’s deferred tax assets are as
follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred tax
assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net operating
losses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">602</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Tax credit
carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">346</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">148</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Intangibles</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,085</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net deferred tax assets
before valuation allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(5,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Use of
Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The preparation
of consolidated financial statements in accordance with GAAP
requires management to make estimates and assumptions that impact
the reported amounts of assets, liabilities and expenses and the
disclosure of contingent assets and liabilities in the financial
statements and accompanying notes. The most significant estimates
in the Company’s consolidated financial statements relate to
accrued research and development expenses, the valuation of common
stock, equity awards and the valuation allowance of deferred tax
assets resulting from net operating losses. These estimates and
assumptions are based on the historical experience, knowledge of
current events and various other factors believed to be reasonable
under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and
liabilities and the recording of expenses that are not readily
apparent from other sources. Actual results could differ materially
from those estimates.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>7. Income
Taxes</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
Company’s loss before income taxes was entirely generated
from its U.S. operations. The net loss before taxes for the period
of May 2, 2018 to December 31, 2018 is as follows (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Period from<br />
May 2, 2018 to<br />
December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">U.S. loss before
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(17,348</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign loss before
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Loss before income
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(17,348</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of income tax expense for period of May 2, 2018
to December 31, 2018 is as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Period from<br />
May 2, 2018 to<br />
December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Current:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total current income tax
expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total deferred income tax
expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total income tax
expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of the federal statutory income tax rate to the
Company’s effective income tax rate is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Period from<br />
May 2, 2018 to<br />
December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal statutory income
tax rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Tax credits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Change in valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(29.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total tax
benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Significant
components of the Company’s deferred tax assets are as
follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred tax
assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net operating
losses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">602</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Tax credit
carryforwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">346</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">148</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Intangibles</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,085</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net deferred tax assets
before valuation allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(5,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The valuation
allowance increased by $5.2 million for the period from
May 2, 2018 to December 31, 2018. The tax benefit of
deductible temporary differences or carryforwards is recorded as a
deferred tax asset to the extent that management assesses the
realization is “more likely than not.” Future
realization of the tax benefit ultimately depends on the existence
of sufficient taxable income within the period available under the
tax law. At December 31, 2018, the Company has set up
valuation allowances against all federal and state deferred tax
assets because based on all available evidence, these deferred tax
assets are not more likely than not to be realizable.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">At
December 31, 2018, the Company had federal and California net
operating loss carryforwards of approximately $2.2 million and
$2.2 million, respectively. Federal losses do not expire, and
California net operating losses will begin to expire in 2038. The
Company also has federal and California research and development
credit carryforwards totaling $0.5 million and $12,000,
respectively. The federal research and development credit
carryforwards will begin to expire in 2038, unless previously
utilized. The California research credits do not expire.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In general, if
the Company experiences a greater than 50 percentage point
aggregate change in ownership of certain significant stockholders
over a three-year period (a “Section 382 ownership
change”), utilization of its <font style="WHITE-SPACE: nowrap">pre-change</font> NOL carryforwards and the
R&D credit carryforwards is subject to an annual limitation
under Sections 382 and 383 of the Internal Revenue Code of 1986, as
amended, and similar state laws. The annual limitation generally is
determined by multiplying the value of the Company’s stock at
the time of such ownership change, subject to certain adjustments,
by the applicable long-term <font style="WHITE-SPACE: nowrap">tax-exempt</font> rate. Such limitations may
result in expiration of a portion of the NOL carryforwards and
R&D credit carryforwards before utilization and may be
material. As of December 31, 2018, the Company has not
determined to what extent a potential ownership change will impact
the annual limitation that may be placed on the Company’s
utilization of its NOL carryovers and R&D credit
carryforwards.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
recognizes the financial statements effects of a tax position when
it is more likely than not, based on technical merits, that the
position will be sustained upon examination.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of the Company’s unrecognized tax benefits is
as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="85%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31, 2018</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Increase related to current
year tax provision</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">116</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at the end of the
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">116</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company has
considered the amounts and probabilities of the outcomes that can
be realized upon ultimate settlement with the tax authorities and
determined unrecognized tax benefits primarily related to credits
should be established as noted in the summary rollforward above.
The unrecognized tax benefits, if recognized and in absence of full
valuation allowance, would impact the income tax provision by
$0.1 million and the Company’s effective income tax rate
would not be impacted if the unrecognized tax benefits are
recognized in the period from May 2, 2018 to December 31,
2018. Additional amounts in the summary rollforward could impact
the Company’s effective tax rate if it did not maintain a
full valuation allowance on its net deferred tax assets. As of
December 31, 2018, the Company does not believe that it is
reasonably possible that its unrecognized tax benefits would
significantly change in the following 12 months.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company is
subject to taxation in the United States, California and
Switzerland. Due to the Company’s losses incurred, the
Company is subject to the income tax examination by authorities
since inception on May 2, 2018. The Company’s policy is
to recognize interest expense and penalties related to income tax
matters as tax expense. As of December 31, 2018, there were no
significant accruals for interest related to unrecognized tax
benefits or tax penalties.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Segment
Reporting</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Operating
segments are identified as components of an enterprise about which
separate discrete financial information is available for evaluation
by the chief operating decision-maker in making decisions regarding
resource allocation and assessing performance. The Company views
its operations and manages its business in one operating
segment.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>4. Convertible Note
Financing</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
August 3, 2018, the Company issued a convertible promissory
note (the “Note”) in an amount of $50,000 to an
affiliated entity of the Company’s then-Chief Executive
Officer and member of its board of directors (the
“Board”). The Note accrued interest at 8% per year and
had a maturity date of December 31, 2019. The Note was subject
to an automatic conversion upon a qualified equity financing
defined as a raise in aggregate of at least $5.0 million,
excluding the conversion of the Note and other indebtedness. The
conversion was equal to the outstanding principal amount of the
Note plus all accrued and previously unpaid interest thereon,
divided by 80% of the lowest price per share paid by investor for
qualified equity financing. On November 5, 2018, the Note
converted into 63,585 shares of Series A Preferred Stock. For the
period from May 2, 2018 to December 31, 2018, the Company
recorded the accretion of the discount and aggregate interest
expense of $14,000.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Recent
Accounting Pronouncements—To Be Adopted</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In February
2016, FASB issued Accounting Standards Update (“ASU”)
<font style="WHITE-SPACE: nowrap">2016-02</font><i>, Leases (Topic
842)</i> (“ASU <font style="WHITE-SPACE: nowrap">2016-02”),</font> which amends existing
guidance to require substantially all leases to be recognized by
lessees on their balance sheet as a <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">right-of-use</font></font> asset and
corresponding lease liability, including leases currently accounted
for as operating leases, including qualitative and quantitative
disclosures. ASU <font style="WHITE-SPACE: nowrap">2016-02</font>
is effective January 1, 2019 for the Company and will apply to
all annual and interim reporting periods thereafter. Early adoption
is permitted. The Company will adopt the new guidance beginning in
2019 and currently believes the most significant impact will be
related to the recognition of right of use assets and lease
liabilities on the Company’s consolidated balance sheet for
real estate operating leases.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Accrued
Research and Development Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accrues and expenses clinical trial activities performed by third
parties based upon estimates of the proportion of work completed
over the life of the individual study and patient enrollment rates
in accordance with agreements established with clinical research
organizations and clinical trial sites. The Company determines the
estimates by reviewing contracts, vendor agreements and purchase
orders and through discussions with internal clinical personnel and
external service providers as to the progress or stage of
completion of trials or services and the agreed-upon fee to be paid
for such services.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
makes estimates of accrued expenses as of each balance sheet date
based on facts and circumstances known to the Company at that time.
If the actual timing of the performance of services or the level of
effort varies from the estimate, the Company will adjust the
accrual accordingly. The Company has not experienced any material
differences between accrued costs and actual costs incurred since
its inception. Nonrefundable advance payments for goods and
services, including fees for process development or manufacturing
and distribution of clinical supplies that will be used in future
research and development activities, are deferred and recognized as
expense in the period that the related goods are consumed or
services are performed.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>3. Asset
Acquisitions</b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Assignment and License Agreement with Shire International
GmbH</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
November 5, 2018, the Company entered into an Assignment and
License Agreement (the “Shire Agreement”) with Shire
International GmbH (“Shire”). Under the terms of the
Shire Agreement, Shire granted the Company an exclusive, royalty
bearing worldwide license to develop and commercialize its two
product candidates, maralixibat and volixibat. As part of the Shire
Agreement, the Company was assigned license agreements held by
Shire with Satiogen Pharmaceuticals, Inc. (“Satiogen”),
Pfizer Inc. (“Pfizer”) and Sanofi-Aventis Deutschland
GmbH (“Sanofi-Aventis”). The Company has the right to
sublicense under the Shire Agreement and additionally has the right
to sublicense under the Satiogen, Pfizer and Sanofi licenses
subject to the terms of those license agreements.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In
consideration for the rights granted to the Company under the Shire
Agreement, the Company made an upfront payment to Shire on
November 5, 2018 of $7.5 million and issued Shire
1,859,151 shares of its redeemable common stock with an estimated
fair value of $7.0 million, or $3.76 per share. The fair value
of the shares was determined using an option pricing model with key
assumptions as of the date of issuance including the probabilities
of liquidity scenarios, enterprise value, time to liquidity,
risk-free interest rates, volatility and discount for lack of
marketability.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company
accounted for the transaction as an asset acquisition as
substantially all of the fair value of the gross assets acquired
were concentrated in a group of similar identifiable assets thus
satisfying the requirements of the screen test in ASU <font style="WHITE-SPACE: nowrap">2017-01.</font> The assets acquired in the
transaction were measured based on the upfront payment to Shire and
the fair value of the common stock shares issued to Shire, as the
fair value of the consideration given was more readily determinable
than the fair value of the assets received. Because the assets had
not yet received regulatory approval and have no alternative future
use, the fair value attributable to these assets was recorded as in
process research and development expenses in the Company’s
consolidated statement of operations and comprehensive loss for the
period from May 2, 2018 to December 31, 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The Company is
also obligated to pay Shire up to an aggregate of
$109.5 million upon the achievement of certain clinical
development and regulatory milestones for maralixibat in certain
indications and an additional $25.0 million upon regulatory
approval of maralixibat for each and every other indication. In
addition, the Company is required to pay up to an aggregate of
$30.0 million upon the achievement of certain clinical
development and regulatory milestones for volixibat solely for the
first indication sought. Upon commercialization, the Company is
obligated to pay Shire product sales milestones on total licensed
products up to an aggregate of $30.0 million. The Company is
also obligated to pay tiered royalties with rates ranging from low
double-digits to <font style="WHITE-SPACE: nowrap">mid-teens</font>
based upon annual worldwide net sales for all licensed products;
however, these royalties are reduced in part by royalties due under
the Satiogen and Sanofi-Aventis licenses, as discussed below,
related to maralixibat and volixibat, as applicable. The
Company’s royalty obligations will continue on a licensed
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product and
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">country-by-country</font></font> basis until
the later to occur of the expiration of the last valid claim in a
licensed patent covering the applicable licensed product in such
country, expiration of any regulatory exclusivity for the licensed
product in a country and ten years after the first commercial sale
of a licensed product in such country. As of December 31,
2018, no milestones had been accrued as there were no potential
milestones yet considered probable.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Concurrent with
the Shire Agreement, the Company also entered into a Transition
Services Agreement (“TSA”) with Shire, which covers
services provided by Shire to transfer the research and development
activities and the related <font style="WHITE-SPACE: nowrap">know-how</font> from Shire to the Company,
including continuation of work on any existing clinical trials and
manufacturing activities until fully transferred. For the period
from November 5, 2018 to December 31, 2018, the Company
recorded research and development expense of $0.5 million for
Shire provided services and $1.6 million for pass through
expenses in its consolidated statement of operations and
comprehensive loss. As of December 31, 2018, $2.1 million
was recorded in accrued expenses on the consolidated balance sheet
for these services.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Satiogen
License</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Through the
Shire Agreement, the Company was assigned a license agreement with
Satiogen pursuant to which the Company obtained an exclusive,
worldwide license to certain patents and <font style="WHITE-SPACE: nowrap">know-how,</font> with the right to sublicense
to a third party subject to certain financial considerations. The
Company is obligated to pay to Satiogen up to an aggregate of
$10.5 million upon the achievement of certain milestones, of
which $0.5 million was for initiation of certain development
activities, $5.0 million for the completion of regulatory
approvals and $5.0 million for commercialization activities.
Additionally, the Company will be required to pay a low
single-digit royalty on net sales. The Company’s royalty
obligations continue on a licensed <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product and
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">country-by-country</font></font> basis until
the expiration of the last valid claim in a licensed patent
covering the applicable licensed product in such country. Royalty
obligations under the Satiogen license are creditable against the
royalty obligations to Shire under the Shire Agreement. As of
December 31, 2018, no milestones had been accrued as there
were no potential milestones yet considered probable.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Pfizer
License</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Through the
Shire Agreement, the Company was assigned a license agreement with
Pfizer pursuant to which the Company obtained an exclusive,
worldwide license to certain Pfizer <font style="WHITE-SPACE: nowrap">know-how</font> with a right to sublicense.
Upon commercialization of any product utilizing the licensed
product, the Company will be required to pay to Pfizer a low
single-digit royalty on net sales of product sold by the Company,
its affiliates or sublicensees. The Company’s royalty
obligations continue on a licensed <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product
basis until the eighth anniversary of the first commercial sale of
such licensed product anywhere in the world.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Sanofi-Aventis License</i></b></font></p>
<p style="MARGIN-BOTTOM: -6px; MARGIN-TOP: 0px"><font size="1"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Through the
Shire Agreement, the Company was assigned a license agreement with
Sanofi-Aventis pursuant to which the Company obtained an exclusive,
worldwide license to certain patents and <font style="WHITE-SPACE: nowrap">know-how</font> with the right to sublicense
to a third party subject to certain financial considerations. The
Company is obligated to pay up to an aggregate of
$36.0 million upon the achievement of certain regulatory,
commercialization and product sales milestones. Additionally, upon
commercialization, the Company is required to pay tiered royalties
in the mid to high single-digit range based upon net sales of
licensed products sold by the Company and sublicensees in a
calendar year, subject to adjustments in certain circumstances. The
Company’s royalty obligations continue on a licensed
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">product-by-licensed</font></font> product and
<font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">country-by-country</font></font> basis until
the later to occur of the expiration of the last valid claim in a
licensed patent covering the applicable licensed product in such
country and ten years after the first commercial sale of a licensed
product in such country. Royalty obligations under the
Sanofi-Aventis license are creditable against the royalty
obligations to Shire under the Shire Agreement. As of
December 31, 2018, no milestones had been accrued as there
were no potential milestones yet considered probable.</font></p>
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