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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Nov. 08, 2019
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Trading Symbol	PHAS
Entity Registrant Name	PhaseBio Pharmaceuticals Inc
Entity Central Index Key	0001169245
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock Shares Outstanding		28,766,332
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-38697
Entity Tax Identification Number	03-0375697
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1 Great Valley Parkway
Entity Address, Address Line Two	Suite 30
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	610
Local Phone Number	981-6500
Security Exchange Name	NASDAQ
Title of 12(b) Security	Common Stock
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

CONDENSED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 81,771	$ 61,031
Restricted cash		20
Other receivable	583	233
Prepaid expenses and other assets	1,015	1,344
Total current assets	83,369	62,628
Property and equipment, net	1,022	355
Operating lease right-of-use assets	1,780
Other assets	32	43
Total assets	86,203	63,026
Current liabilities:
Current portion of long-term debt	1,990
Accounts payable	1,659	1,806
Accrued expenses and other current liabilities	2,313	2,771
Total current liabilities	5,962	4,577
Long-term debt	7,740	7,500
Operating lease liabilities	1,577
Other long-term liabilities	120
Deferred rent		22
Total liabilities	15,399	12,099
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2019 and December 31, 2018; zero shares issued and outstanding at September 30, 2019 and December 31, 2018
Common stock, $0.001 par value; 200,000,000 shares authorized; 28,782,811 shares issued and 28,752,844 shares outstanding at September 30, 2019; 24,528,242 shares issued and 24,498,275 shares outstanding at December 31, 2018	29	25
Treasury stock, at cost, 29,967 shares as of September 30, 2019 and December 31, 2018	(24)	(24)
Additional paid-in capital	221,626	173,837
Accumulated deficit	(150,827)	(122,911)
Total stockholders’ equity	70,804	50,927
Total liabilities and stockholders' equity	$ 86,203	$ 63,026

CONDENSED BALANCE SHEETS (Parenthetical) (unaudited) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	28,782,811	24,528,242
Common stock, shares outstanding	28,752,844	24,498,275
Treasury stock, shares	29,967	29,967

CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue:
Total revenue	$ 241	$ 411	$ 1,597	$ 411
Operating expenses:
Research and development	9,028	4,354	22,530	9,779
General and administrative	2,803	1,056	7,523	2,616
Total operating expenses	11,831	5,410	30,053	12,395
Loss from operations	(11,590)	(4,999)	(28,456)	(11,984)
Other income (expense):
Interest income	451	60	1,259	132
Interest expense	(266)	(890)	(711)	(3,741)
Foreign exchange gain (loss)	14		(8)
Change in fair value of warrant liability		(1,713)		(2,709)
Change in fair value of derivative liability		(359)		(676)
Total other income (expense)	199	(2,902)	540	(6,994)
Net loss	$ (11,391)	$ (7,901)	$ (27,916)	$ (18,978)
Net loss per common share, basic and diluted	$ (0.40)	$ (10.45)	$ (1.03)	$ (25.33)
Weighted average common shares outstanding, basic and diluted	28,719,932	755,908	27,065,774	749,198
Grant Revenue
Revenue:
Total revenue	$ 241	$ 411	$ 1,097	$ 411
Collaborative Agreement
Revenue:
Total revenue			$ 500

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS (DEFICIT) (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Redeemable Convertible Preferred Stock
Redeemable convertible preferred stock, beginning balance at Dec. 31, 2017						$ 89,634
Redeemable convertible preferred stock, beginning balance, shares at Dec. 31, 2017						9,131,999
Temporary equity, Accretion of redeemable preferred stock to redemption value						$ 16
Redeemable convertible preferred stock, ending balance at Mar. 31, 2018						$ 89,650
Redeemable convertible preferred stock, ending balance, shares at Mar. 31, 2018						9,131,999
Beginning balance at Dec. 31, 2017	$ (97,416)	$ 1	$ (24)	$ 1,672	$ (99,065)
Beginning balance, shares at Dec. 31, 2017		775,755	(29,967)
Stock-based compensation	104			104
Accretion of redeemable preferred stock to redemption value	(16)			(16)
Net loss	(4,403)				(4,403)
Ending balance at Mar. 31, 2018	(101,731)	$ 1	$ (24)	1,760	(103,468)
Ending balance, shares at Mar. 31, 2018		775,755	(29,967)
Redeemable convertible preferred stock, beginning balance at Dec. 31, 2017						$ 89,634
Redeemable convertible preferred stock, beginning balance, shares at Dec. 31, 2017						9,131,999
Redeemable convertible preferred stock, ending balance at Sep. 30, 2018						$ 125,609
Redeemable convertible preferred stock, ending balance, shares at Sep. 30, 2018						13,200,115
Beginning balance at Dec. 31, 2017	(97,416)	$ 1	$ (24)	1,672	(99,065)
Beginning balance, shares at Dec. 31, 2017		775,755	(29,967)
Net loss	(18,978)
Ending balance at Sep. 30, 2018	(116,174)	$ 1	$ (24)	1,892	(118,043)
Ending balance, shares at Sep. 30, 2018		795,640	(29,967)
Redeemable convertible preferred stock, beginning balance at Mar. 31, 2018						$ 89,650
Redeemable convertible preferred stock, beginning balance, shares at Mar. 31, 2018						9,131,999
Temporary equity, Accretion of redeemable preferred stock to redemption value						$ 17
Redeemable convertible preferred stock, ending balance at Jun. 30, 2018						$ 89,667
Redeemable convertible preferred stock, ending balance, shares at Jun. 30, 2018						9,131,999
Beginning balance at Mar. 31, 2018	(101,731)	$ 1	$ (24)	1,760	(103,468)
Beginning balance, shares at Mar. 31, 2018		775,755	(29,967)
Stock-based compensation	62			62
Accretion of redeemable preferred stock to redemption value	(17)			(17)
Net loss	(6,674)				(6,674)
Ending balance at Jun. 30, 2018	(108,360)	$ 1	$ (24)	1,805	(110,142)
Ending balance, shares at Jun. 30, 2018		775,755	(29,967)
Issuance of redeemable preferred stock						$ 14,890
Issuance of redeemable preferred stock, shares						1,842,959
Issuance of redeemable preferred stock upon conversion of promissory notes						$ 19,778
Issuance of redeemable preferred stock upon conversion of promissory notes, shares						2,080,209
Exercises of warrants						$ 1,212
Exercise of warrants, shares						144,948
Temporary equity, Accretion of redeemable preferred stock to redemption value						$ 62
Redeemable convertible preferred stock, ending balance at Sep. 30, 2018						$ 125,609
Redeemable convertible preferred stock, ending balance, shares at Sep. 30, 2018						13,200,115
Exercises of stock options	53			53
Exercises of stock options, shares		19,885
Stock-based compensation	96			96
Accretion of redeemable preferred stock to redemption value	(62)			(62)
Net loss	(7,901)				(7,901)
Ending balance at Sep. 30, 2018	(116,174)	$ 1	$ (24)	1,892	(118,043)
Ending balance, shares at Sep. 30, 2018		795,640	(29,967)
Beginning balance at Dec. 31, 2018	$ 50,927	$ 25	$ (24)	173,837	(122,911)
Beginning balance, shares at Dec. 31, 2018	24,498,275	24,528,242	(29,967)
Issuance of common stock warrants	$ 210			210
Exercises of stock options, shares		150
Stock-based compensation	238			238
Net loss	(7,293)				(7,293)
Ending balance at Mar. 31, 2019	44,082	$ 25	$ (24)	174,285	(130,204)
Ending balance, shares at Mar. 31, 2019		24,528,392	(29,967)
Beginning balance at Dec. 31, 2018	$ 50,927	$ 25	$ (24)	173,837	(122,911)
Beginning balance, shares at Dec. 31, 2018	24,498,275	24,528,242	(29,967)
Net loss	$ (27,916)
Ending balance at Sep. 30, 2019	$ 70,804	$ 29	$ (24)	221,626	(150,827)
Ending balance, shares at Sep. 30, 2019	28,752,844	28,782,811	(29,967)
Beginning balance at Mar. 31, 2019	$ 44,082	$ 25	$ (24)	174,285	(130,204)
Beginning balance, shares at Mar. 31, 2019		24,528,392	(29,967)
Issuance of common stock warrants	86			86
Issuance of common stock in public offering, net	46,277	$ 4		46,273
Issuance of common stock in public offering, net, shares		4,124,475
Exercises of stock options	126			126
Exercises of stock options, shares		74,740
Stock-based compensation	270			270
Net loss	(9,232)				(9,232)
Ending balance at Jun. 30, 2019	81,609	$ 29	$ (24)	221,040	(139,436)
Ending balance, shares at Jun. 30, 2019		28,727,607	(29,967)
Exercises of stock options	95			95
Exercises of stock options, shares		55,204
Stock-based compensation	491			491
Net loss	(11,391)				(11,391)
Ending balance at Sep. 30, 2019	$ 70,804	$ 29	$ (24)	$ 221,626	$ (150,827)
Ending balance, shares at Sep. 30, 2019	28,752,844	28,782,811	(29,967)

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net loss	$ (27,916)	$ (18,978)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	124	82
Stock-based compensation	999	262
Non-cash interest expense	354	3,580
Change in fair value warrant liability		2,709
Change in fair value derivative liability		676
Changes in operating assets and liabilities:
Other receivable	(350)	(411)
Prepaid expenses and other assets	340	130
Accounts payable	(114)	558
Accrued expenses	(556)	1,182
Deferred rent	14	(5)
Net cash used in operating activities	(27,105)	(10,215)
Investing activities
Purchases of property and equipment	(824)	(31)
Net cash used in investing activities	(824)	(31)
Financing activities
Proceeds from issuance of redeemable convertible preferred stock, net		17,712
Proceeds from issuance of common stock in public offering, net	46,277
Long-term borrowings, net	3,089	3,995
Payments of initial public offering costs		(595)
Proceeds from exercise of stock options	221	53
Proceeds from exercise of warrants		16
Repayments of long-term debt	(938)
Net cash provided by financing activities	48,649	21,181
Net increase in cash and cash equivalents	20,720	10,935
Cash, cash equivalents and restricted cash at the beginning of the period	61,051	13,406
Cash, cash equivalents and restricted cash at the end of the period	81,771	24,341
Supplemental disclosure for cash flow
Cash paid for interest	357	161
Supplemental disclosure of non-cash investing and financing activities
Accrued interest on term loan refinanced to principal	308
Conversion of convertible promissory notes into redeemable convertible preferred stock		19,778
Issuance of warrants in conjunction with debt	296	2,822
Debt refinanced with new term loan	6,563
Initial recognition of operating lease right-of-use assets and operating lease liabilities	1,991
Accretion of redeemable convertible preferred stock		95
Warrant liability converted to redeemable convertible preferred stock upon the exercise of warrants		1,196
Deferred initial public offering costs included in accounts payable and accrued expenses		$ 1,623
Purchases of property and equipment included in accounts payable	$ 6

Organization and Description of Business

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Description of Business

1.	Organization and Description of Business

Description of Business

PhaseBio Pharmaceuticals, Inc. (the “Company”) was incorporated as a Delaware corporation on January 10, 2002. The Company is a clinical-stage biopharmaceutical company focused on the development and commercialization of novel therapies to treat orphan diseases, with an initial focus on cardiopulmonary indications. The Company’s lead product candidate, PB2452, is a novel reversal agent for the antiplatelet drug ticagrelor, which the Company is developing for the treatment of patients on ticagrelor who are experiencing a major bleeding event or those who require urgent surgery. The Company’s second product candidate, PB1046, is a once-weekly fusion protein currently in a Phase 2b clinical trial for the treatment of pulmonary arterial hypertension. PB1046 utilizes the Company’s proprietary half-life extending elastin-like polypeptide technology, which also serves as an engine for the Company’s preclinical pipeline.

Reverse Stock Split

In October 2018, in connection with its initial public offering (“IPO”), the Company effected a 11.0634-for-1 reverse split of its outstanding common stock and redeemable convertible preferred stock. No fractional shares were issued in connection with the stock split, and the par value and other terms of the common stock were not affected by the stock split. All share and per share amounts, including stock options, have been retroactively adjusted in these condensed financial statements for all periods presented to reflect the reverse stock split. Further, exercise prices of stock options have been retroactively adjusted in these condensed financial statements for all periods presented to reflect the reverse stock split.

Liquidity

The Company has experienced net losses and negative cash flows from operations since its inception and, as of September 30, 2019, had an accumulated deficit of $150.8 million. The Company expects to continue to incur net losses for at least the next several years. As of September 30, 2019, the Company had cash and cash equivalents of $81.8 million and working capital of $77.4 million. Management believes that its cash and cash equivalents as of September 30, 2019, in addition to $5.0 million of proceeds from the October 2019 borrowing under its term loan (see Note 14), are sufficient to fund the Company’s operating expenses and capital requirements into the first quarter of 2021.

Basis of Presentation

The accompanying condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying condensed financial statements have been made. Although these interim condensed financial statements do not include all of the information and footnotes required for complete annual financial statements, management believes the disclosures are adequate to make the information presented not misleading. The unaudited interim results of operations and cash flows for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the full year. The unaudited interim condensed financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 26, 2019, wherein a more complete discussion of significant accounting policies and certain other information can be found.

Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”). Certain non-significant reclassifications have been made to conform the prior period presentation.

The Company manages its operations as a single reportable segment for the purposes of assessing performance and making operating decisions.

Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

2.	Significant Accounting Policies

Use of Estimates

The preparation of the Company’s condensed financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates in the Company’s condensed financial statements relate to the valuation of redeemable convertible preferred stock warrants prior to the IPO, the conversion option on the convertible notes prior to conversion and clinical trial accruals. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results could differ materially from those estimates and assumptions.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains certain deposit accounts and money market funds in federally insured financial institutions in excess of federally insured limits. The Company could experience losses on the money market funds in the future.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts.

Restricted Cash

The Company had restricted cash of $20,000 as of December 31, 2018, which was held in a certificate of deposit at the Company’s bank to secure the Company’s corporate credit card. The restriction was removed in June 2019.

Fair Value of Financial Instruments

The carrying amounts of other receivable, prepaid expenses and other assets, accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair value because of the short maturity of these items. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair values of the term loan and operating lease liabilities and corresponding right-of-use assets approximate their respective carrying values.

Property and Equipment

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the assets (three to five years) using the straight-line method. Leasehold improvements are amortized over the shorter of their estimated useful lives or the lease term.

Leases

At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term including any options to extend the lease that the Company is reasonably certain to exercise. The Company calculates the present value of lease payments using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease commencement date, the Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For Short-Term Leases, the Company records the rent expense on a straight-line basis and does not record the leases on the condensed balance sheet. The Company had no Short-Term Leases as of September 30, 2019 or December 31, 2018.

After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term.

Long-Lived Assets

The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment and right-of-use assets to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate net positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Should an impairment exist, the impairment loss would be measured based on the extent that the estimated fair value is less than its carrying value. The Company did not recognize any impairment losses in either the nine months ended September 30, 2019 or the year ended December 31, 2018.

Preferred Stock Warrant Liability

The Company previously issued freestanding warrants to purchase shares of its redeemable convertible preferred stock. Since the underlying redeemable convertible preferred stock was classified outside of permanent equity, those warrants were classified as liabilities in the accompanying condensed balance sheet. Warrants classified as liabilities were recorded at their estimated fair value on the date of issuance and were revalued at each subsequent balance sheet date, with fair value changes recognized as increases or reductions to other income (expense) in the accompanying condensed statements of operations. The Company estimated the fair value of these warrants using the Black-Scholes option-pricing model.

In connection with the Company’s IPO in October 2018, all warrants were either exercised or converted into warrants to purchase common stock, at which time the liability was reclassified to stockholders’ equity.

Preclinical and Clinical Trial Accruals

The Company accrues and expenses amounts incurred in connection with preclinical studies and clinical trial activities performed by third parties based upon estimates of the proportion of work completed over the life of the individual trial and subject enrollment rates in accordance with agreements with clinical research organizations, contract manufacturing 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. However, actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending upon a number of factors, including the Company’s clinical development plan.

Management makes estimates of the Company’s accrued expenses as of each balance sheet date in the Company’s condensed financial statements 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. 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.

Research and Development Expense

Research and development costs are expensed as incurred.

Stock-Based Compensation

The Company measures and recognizes compensation expense for all stock-based compensation based on the estimated fair value at the date of grant. Currently, the Company’s stock-based awards consist only of stock options; however, future grants under the Company’s equity compensation plan may also consist of shares of restricted stock, restricted stock units, stock appreciation rights, performance awards and performance units. The Company also maintains an employee stock purchase program under which it may issue shares. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, which requires the use of estimates. The Company recognizes stock-based compensation cost for ratably vesting stock options on a straight-line basis over the requisite service period of the award and records forfeitures in the period in which they occur.

The Black-Scholes option-pricing model requires the input of subjective assumptions, including the risk-free interest rate, the fair value of the underlying common stock (for option grants prior to the IPO), the expected dividend yield of the Company’s common stock, the expected volatility of the price of the Company’s common stock, and the expected term of the option. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the condensed financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits, if any, within income tax expense, and any accrued interest and penalties are included within the related tax liability line.

Grant Revenue

Grant revenue is derived from government grants that support the Company’s efforts on specific research projects. The Company has determined that the government agencies providing grants to the Company are not customers. The Company recognizes grant revenue when there is reasonable assurance of compliance with the conditions of the grant and reasonable assurance that the grant revenue will be received.

Revenue Under Collaborative Agreement

The Company generates revenues from payments received under a collaborative agreement. Under such collaboration agreements, the Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identifies the promised goods or services in the contract; (ii) identifies the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determines the transaction price, including the constraint on variable consideration; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when (or as) the Company satisfies the performance obligations.

For revenue from such collaborative agreements, the Company generally collects an upfront license payment from the collaboration partner and is also entitled to receive event-based payments subject to the collaboration partner's achievement of specified development, regulatory and sales-based milestones. In addition, the Company is generally entitled to royalties if products under the collaboration are commercialized. Although such agreements are in form structured as collaborative agreements, for accounting purposes they represent contracts with customers that are not subject to accounting literature on collaborative arrangements. If the Company grants to collaboration partners a license to the Company’s intellectual property, the Company does not develop assets jointly with the collaboration partner and does not share in significant risks of their development or commercialization activities.

Transaction price for a contract represents the amount to which the Company is entitled in exchange for providing goods and services to the customer. Transaction price does not include amounts subject to uncertainties unless it is probable that there will be no significant reversal of revenue when the uncertainty is resolved. Apart from the upfront license payment, all other fees the Company may earn under such collaborative agreements are subject to significant uncertainties of product development. Achievement of many of the event-based development and regulatory milestones may not be probable until such milestones are actually achieved. This generally relates to milestones such as obtaining marketing authorization approvals and successful completion of clinical trials. With respect to other development milestones, e.g. dosing of a first patient in a clinical trial, achievement could be considered probable prior to its actual occurrence, based on the progress towards commencement of the trial. The Company does not include any amounts subject to uncertainties into the transaction price until it is probable that the amount will not result in a significant reversal of revenue in the future. At the end of each reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the estimate of the overall transaction price.

Because such agreements generally only have one type of performance obligation, a license, which is generally all transferred at the same time as agreement inception, allocation of the transaction price among multiple performance obligations is not required.

Upfront amounts allocated to licenses are recognized as revenue when the licenses are transferred to the collaboration partners. Development milestones and other fees are recognized in revenue when their occurrence becomes probable.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities, which include redeemable convertible preferred stock, warrants and outstanding stock options under the Company’s stock option plan, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position.

The following table sets forth the outstanding, potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

	As of September 30,
	2019		2018
Redeemable convertible preferred stock		—		13,200,115
Common stock options		2,481,403		1,315,625
Warrants to purchase common stock		125,333		—
Warrants to purchase redeemable convertible preferred stock		—		708,484
Total		2,606,736		15,224,224

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases. This update amended the current accounting guidance for lease transactions. Under the new guidance, a lessee is required to recognize both assets and liabilities for any leases with terms in excess of twelve months. Additionally, certain qualitative and quantitative disclosures are required in the condensed financial statements. The Company adopted ASU 2016-02 in the first quarter of 2019 using a modified retrospective transition method as of the effective date as permitted by the amendments in ASU 2018-11. As a result, the Company was not required to adjust comparative prior period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption. The Company elected to adopt the package of transition practical expedients and, therefore, did not reassess (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, the Company does not expect the amendments in ASU 2018-01, Land Easement Practical Expedient to have an effect on its condensed financial statements because the Company does not enter into land easement arrangements. The adoption of the new leasing standards did not affect retained earnings and other components of equity as of December 31, 2018. Upon adoption in the first quarter of 2019, the Company recorded right-of-use assets and corresponding lease liabilities of $2.0 million.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement. The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions.

Fair Value Measurement

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurement

3.	Fair Value Measurement

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 at the measurement date. 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 a liability.

The Company classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1:

Quoted prices in active markets for identical assets or liabilities.

Level 2:

Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3:

Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

The Company’s cash equivalents are classified using Level 1 inputs within the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

The following table summarizes the Company’s assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):

			Fair Value Measurements at Reporting Date
	Total		Level 1		Level 2		Level 3
As of September 30, 2019:
Assets
Cash equivalents	$	81,521	$	81,521	$	—	$	—
As of December 31, 2018:
Assets
Cash equivalents	$	59,357	$	59,357	$	—	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment

9 Months Ended

Sep. 30, 2019

Property Plant And Equipment [Abstract]

Property and Equipment

4.	Property and Equipment

The following table presents the composition of property and equipment, net as of September 30, 2019 and December 31, 2018 (in thousands):

	As of			As of
	September 30, 2019			December 31, 2018
Lab equipment	$	2,105		$	1,764
Computer hardware, software and telephone		273			228
Furniture and fixtures		104			98
Leasehold improvements		67			50
Construction in progress		382			—
		2,931			2,140
Less accumulated depreciation		(1,909	)		(1,785	)
Property and equipment, net	$	1,022		$	355

Accrued Expenses

9 Months Ended

Sep. 30, 2019

Payables And Accruals [Abstract]

Accrued Expenses

5.	Accrued Expenses

The following table presents the composition of accrued expenses as of September 30, 2019 and December 31, 2018 (in thousands):

	As of		As of
	September 30, 2019		December 31, 2018
Accrued clinical and related costs	$	765	$	1,358
Accrued compensation and related costs		960		914
Accrued interest		54		194
Operating lease liability, short-term		239		—
Accrued other		295		305
Accrued expenses and other current liabilities	$	2,313	$	2,771

Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt

Convertible Promissory Notes

In January 2017 and October 2017, the Company issued $14.7 million of convertible promissory notes (the “2017 Notes”) to holders of Series C-1 redeemable convertible preferred stock (“Series C-1”). The 2017 Notes bore interest at the rate of 8% per annum. Upon a subsequent equity financing of at least $10.0 million prior to the stated maturity date, the 2017 Notes plus accrued interest would automatically convert into shares of the stock issued by the Company in such financing at a price equal to 80% of the lowest issue price.

The 2017 Notes could have converted into a variable number of shares of preferred stock, and accordingly, the Company determined the conversion provision to be a redemption feature. The redemption feature was evaluated as an embedded derivative and bifurcated from the convertible promissory notes due to the substantial premium paid upon redemption and accounted for as a derivative instrument. Upon bifurcating the redemption feature, the Company recorded a debt discount of $3.0 million that was recognized in interest expense over the term of the 2017 Notes.

In connection with the 2017 Notes, the Company issued warrants to the noteholders to purchase 304,397 shares of Series C-1. The warrants were exercisable for $0.12 per share and would expire upon the earlier of (1) the date of the initial closing of a liquidation event, as defined, (2) the closing of a firm commitment underwritten initial public offering, or (3) January 2024. All warrants were exercised in connection with the closing of the Company’s IPO. The Company recorded a debt discount of $1.7 million, which represents the estimated fair value of the warrants, upon issuance of the 2017 Notes, which was being amortized to interest expense over the term of the 2017 Notes using the effective-interest method.

In August 2018, the Company sold 1,842,959 shares of Series D redeemable preferred stock (“Series D”) to new and existing investors at a price of $9.659 per share for net proceeds of $17.7 million and issued warrants to purchase 368,582 shares of Series C-1 at an exercise price of $0.12 (the “Series D Financing”). Concurrent with the Series D Financing, all of the Company’s previously outstanding 2017 Notes, including accrued interest thereon, were converted into 2,080,209 shares of Series D.

Interest expense, including the debt discount related to the 2017 Notes, was zero and $0.7 million for the three months ended September 30, 2019 and 2018, respectively, and zero and $3.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Term Loans

October 2017 Loan Agreement with Silicon Valley Bank

In October 2017, the Company entered into a Loan and Security Agreement (“SVB Loan”) with Silicon Valley Bank (“SVB”), pursuant to which the Company could borrow up to $7.5 million, issuable in three separate tranches (“Growth Capital Advances”) of $3.5 million (“Tranche A”), $2.0 million (“Tranche B”) and $2.0 million (“Tranche C”). Each of the Growth Capital Advances would become available upon the achievement of certain clinical and regulatory milestones. Under the original terms of the SVB Loan, the Company was to make interest-only payments through June 30, 2018 at a rate equal to the Prime Rate as defined per the SVB Loan. The interest-only period would be extended to December 31, 2018 if the Company borrowed the remaining tranches, followed by an amortization period of 24 months of equal monthly payments of principal plus interest amounts until paid in full. In connection with the SVB Loan, the Company issued to SVB a warrant to purchase 49,713 shares of Series C-1 at an exercise price of $9.659 per share, which is now exercisable for common stock following the IPO. The warrant is immediately exercisable and expires on October 18, 2027. The Company was required to make a final payment equal to 7% of the original aggregate principal amount of the Growth Capital Advances at maturity. In November 2017, the Company drew $3.5 million from Tranche A.

The Company had the option to prepay all, but not less than all, of the borrowed amounts, provided that the Company would have been obligated to pay a prepayment fee equal to (a) 3.0% of the outstanding principal balance of the applicable Growth Capital Advances if prepayment was made prior to the first anniversary of the effective date of the SVB Loan, (b) 2.0% of the outstanding principal balance of the applicable Growth Capital Advances if prepayment was made by the second anniversary of the effective date of the SVB Loan or (c) 1.0% of the outstanding principal balance of the applicable Growth Capital Advances if prepayment was made after the second anniversary of the effective date of the SVB Loan.

In April 2018, the SVB Loan was amended to extend the draw period of Tranche B and Tranche C to April 30, 2018 and July 31, 2018, respectively, as well as to extend the interest-only period through July 31, 2018, which would be extended to December 31, 2018 if the Company borrowed Tranche B and Tranche C. Additionally, all Capital Growth Advances would mature on June 1, 2020; however, if the Company were to draw Tranche B and Tranche C, the maturity date would be December 31, 2020. On April 30, 2018, the Company borrowed $2.0 million under Tranche B.

In July 2018, the SVB Loan was amended to further extend the draw period of Tranche C to August 31, 2018, as well as to extend the interest-only period of the SVB Loan through August 31, 2018, which would be extended to December 31, 2018 if the Company were to draw Tranche C. In August 2018, the Company borrowed $2.0 million under Tranche C.

March 2019 Loan Agreement with Silicon Valley Bank and WestRiver Innovation Lending Fund VIII, L.P.

In March 2019, the Company entered into a new term loan agreement (the “2019 Loan”) with SVB and WestRiver Innovation Lending Fund VIII, L.P. (“WestRiver”), pursuant to which the Company may borrow up to $15.0 million, issuable in three separate tranches (“Advances”), of $7.5 million (“Tranche 1”), which was issued upon execution of the 2019 Loan, $2.5 million, which was issued in May 2019 (“Tranche 2”) and $5.0 million (“Tranche 3”), which the Company was required to draw upon the achievement of certain regulatory milestones (the “Tranche 3 Milestones”).

The maturity date of the 2019 Loan is March 1, 2023. Under the terms of the 2019 Loan, the Company is to make interest-only payments through December 31, 2019 with respect to Tranche 1 and Tranche 2 at a rate equal to the greater of the Prime Rate plus 1.00%, as defined in the 2019 Loan, or 6.5%, followed by an amortization period of 39 months of equal monthly payments of principal plus interest until paid in full. The interest-only period was automatically extended to June 30, 2020 upon achievement of the Tranche 3 Milestones, followed by an amortization period of 33 months of equal monthly payments of principal plus interest until paid in full. In addition to and not in substitution for the Company’s regular monthly payments of principal plus accrued interest, the Company is required to make a final payment equal to 6% of the aggregate principal amount of the advances (“Final Payment”) on the maturity date.

Upon execution of the 2019 Loan and the draw of Tranche 1, the Company issued to SVB and WestRiver warrants to purchase an aggregate of 37,606 shares of common stock with an exercise price of $4.73 per share. In May 2019, upon the draw of Tranche 2, the Company issued to SVB and WestRiver warrants to purchase an aggregate of 12,130 shares of common stock with an exercise price of $10.86 per share.

Upon execution of the 2019 Loan, the Company drew $7.5 million from Tranche 1 and repaid the outstanding principal balance and the accrued portion of the Final Payment of the SVB Loan. In May 2019, the Company drew $2.5 million from Tranche 2.

The Company’s obligations under the 2019 Loan are secured by a first priority security interest in substantially all of the Company’s current and future assets, excluding intellectual property. The Company is also obligated to comply with various other customary covenants, including restrictions on the Company’s ability to encumber its intellectual property assets.

The Company recorded a debt discount of $0.3 million for the estimated fair value of warrants and debt issuance costs upon the borrowings of Tranche 1 and Tranche 2, which is being amortized to interest expense over the term of the 2019 Loan using the effective-interest method. Interest expense under the SVB Loan and the 2019 Loan, including amortization of the debt discount related to the term debt, totaled $0.3 million and $0.2 million for the three months ended September 30, 2019 and 2018, respectively, and $0.7 million and $0.4 million for the nine months ended September 30, 2019 and 2018, respectively. The balance of the Final Payment liability was $0.1 million as of September 30, 2019 and is included in long-term debt on the condensed balance sheet. The Company is in compliance with all covenants under the 2019 Loan as of September 30, 2019.

Based on a 39-month amortization of the outstanding principal amounts for the 2019 Loan, the following table sets forth by year the Company’s required future principal payments as of September 30, 2019 (in thousands):

Years Ending December 31,
2019 (remaining three months)	$	—
2020		2,852
2021		3,047
2022		3,255
2023		846
Thereafter		—
	$	10,000

In October 2019, the Company drew $5.0 million from Tranche 3 and issued to SVB and WestRiver warrants to purchase an aggregate of 24,262 shares of common stock with an exercise price of $3.88 per share. For more information, refer to Note 14.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

7.	Commitments and Contingencies

Legal Proceedings

The Company is not currently a party to any litigation, nor is management aware of any pending or threatened litigation against the Company, that it believes would materially affect the Company’s business, operating results, financial condition or cash flows.

Supply Agreement

The Company entered into a master services agreement (“Supply Agreement”) with BioVectra Inc., (“BioVectra”). BioVectra will manufacture and supply cGMP-grade quantities of PB2452 for the Company’s potential Phase 3 clinical trial as well as any work required to support the marketing authorization filing of PB2452. The Company plans to put a commercial supply agreement in place for PB2452 if it is approved by the FDA.

BioVectra is responsible for the facility, including performing all work related to the procurement, design, project management, installation, assembly, commissioning and validation of the facility and all equipment, and for financing a majority of the costs associated with building out the facility. The Company will be responsible for the purchase of certain equipment and raw materials for the production process.

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Operating Leases

The Company leases office and research and development facilities and equipment under various non-cancellable operating lease agreements.

In January 2010, the Company entered into a lease for office and laboratory space in Malvern, Pennsylvania (the “Malvern Lease”). The Malvern Lease commenced in March 2010 and was amended to extend its term to July 31, 2018 and again to September 30, 2023, with an option to extend the lease for an additional three years. This lease contains escalating rent payments. In December 2018, the Company entered into a lease for office space in San Diego, California, which expires in October 2022. As of September 30, 2019, the weighted average remaining lease term for the Company’s leases was 6.3 years, and the weighted average discount rate used to determine the right-of-use assets and corresponding operating lease liabilities was 6.4%.

Maturities of operating lease liabilities as of September 30, 2019 are as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	72
2020		372
2021		377
2022		363
2023		272
Thereafter		776
Total future lease payments		2,232
Less: Present value adjustment		(416	)
Operating lease liabilities	$	1,816

The Company recognizes rent expense for the operating leases on a straight-line basis. The Company accounts for the cumulative difference between the minimum lease payments and the straight-line amount as deferred rent and records it as an offset to operating lease right-of-use assets. Rent expense was $0.2 million and $0.1 million for the three months ended September 30, 2019 and 2018, respectively, and $0.4 million and $0.3 million for the nine months ended September 30, 2019 and 2018, respectively.

Stockholders’ Equity

9 Months Ended

Sep. 30, 2019

Stockholders Equity Note [Abstract]

Stockholders’ Equity

9.	Stockholders’ Equity

Preferred Stock

The Company issued Series 1 redeemable convertible preferred stock, Series 2 redeemable preferred stock, Series AA redeemable convertible preferred stock, Series B redeemable convertible preferred stock, Series C-1 redeemable convertible preferred stock, Series C-2 redeemable convertible preferred stock, Series C-3 redeemable convertible preferred stock, and Series D convertible preferred stock (collectively, “Preferred Stock”). Upon the closing of the IPO on October 22, 2018, all shares of Preferred Stock were automatically converted into an aggregate of 13,200,115 shares of common stock.

Initial Public Offering

In October 2018, the Company completed an IPO of its common stock, which resulted in the issuance and sale of an aggregate of 9,864,666 shares of common stock at a public offering price of $5.00 per share, generating net proceeds of $43.0 million after deducting underwriting discounts and commissions and other offering costs. In connection with the completion of the IPO, all then-outstanding shares of the Company’s redeemable convertible preferred stock were converted into an aggregate of 13,200,115 shares of common stock.

Upon completion of the IPO, the Company’s certificate of incorporation was amended and restated. Under the amended and restated certificate of incorporation, the Company’s authorized capital stock consists of 200,000,000 shares of common stock with a par value of $0.001 per share and 10,000,000 shares of preferred stock with a par value of $0.001 per share.

April 2019 Offering

In April 2019, the Company completed an underwritten public offering of its common stock, which resulted in the issuance and sale of an aggregate of 4,124,475 shares of common stock at a public offering price of $12.00 per share, generating net proceeds of $46.3 million after deducting underwriting discounts and commissions and other offering costs.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

10.	Stock-Based Compensation

Stock-based compensation expense has been reported in the Company’s condensed statements of operations for the three and nine months ended September 30, 2019 and 2018 as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
General and administrative	$	395	$	65	$	792	$	119
Research and development		96		31		207		143
Total stock-based compensation	$	491	$	96	$	999	$	262

As of September 30, 2019, the total unrecognized compensation expense related to unvested employee and non-employee stock option awards was $3.4 million, which was expected to be recognized in expense over a weighted-average period of approximately 2.8 years.

License Agreements

9 Months Ended

Sep. 30, 2019

License Agreements [Abstract]

License Agreement

11.	License Agreements

MedImmune Limited

In November 2017, the Company entered into a license agreement (“MedImmune License”) with MedImmune Limited (“MedImmune”). MedImmune is a wholly owned subsidiary of AstraZeneca plc (“AstraZeneca”). Pursuant to the terms of the MedImmune License, MedImmune granted the Company exclusive global rights for the purpose of developing and commercializing products under the MedImmune License (“MedImmune licensed product”). In consideration of the license and other rights granted by MedImmune, the Company made an upfront payment of $0.1 million, which was included as research and development expense for the year ended December 31, 2017. The Company is also obligated to make a series of contingent milestone payments totaling up to an aggregate of $18.0 million upon the achievement of clinical development and regulatory milestones. During the nine months ended September 30, 2019, the Company made a $1.0 million milestone payment to MedImmune, which was recorded as a research and development expense. In addition, the Company will pay MedImmune tiered royalties ranging from mid-single-digit to low-teen percentages of net sales of any MedImmune licensed products and additional payments of up to $50.0 million in aggregate commercial milestones. The Company also must pay quarterly fees relating to technical services provided by MedImmune. The MedImmune License requires the Company to cooperate with MedImmune on commercial messaging of PB2452 and provides MedImmune with the return of rights to PB2452 if certain commercial diligence requirements are not achieved by the Company. In addition, the MedImmune License offers an option for third-party product storage costs. As of December 31, 2018, the Company had incurred and reimbursed MedImmune $0.5 million for such third-party product storage costs. The Company incurred an insignificant amount of third-party product storage costs in the nine months ended September 30, 2019 and 2018. AstraZeneca is a stockholder of the Company.

Duke University

In October 2006, the Company entered into a license agreement with Duke University (“Duke”) (as amended, the “Duke License”). Pursuant to the Duke License, Duke granted to the Company an exclusive, worldwide license under certain patent rights and a non-exclusive license to know-how owned or controlled by Duke to develop and commercialize any products or processes covered under the Duke License (the “Duke licensed products”). The Duke License was amended in February 2016 to allow Duke to use the Company’s technology in the area of small-molecule oncologics. The Duke License is a worldwide, sublicensable agreement and remains in full effect for the life of the last-to-expire patents included in the patent rights, which is estimated to be 2029. The Company is required to apply for, prosecute and maintain all U.S. and foreign patent rights under the Duke License.

The Company is obligated to pay up to $2.2 million upon the achievement of clinical development and regulatory milestones and up to $0.4 million upon the achievement of commercial milestones. The Duke License may be terminated by Duke if the Company fails to meet certain clinical development and regulatory milestones within specified timeframes. As of September 30, 2019, the Company was in compliance with its development obligations.

The Company is required to use commercially reasonable efforts to develop one or more products or processes and introduce them into commercial markets. Duke will receive low single-digit royalty percentages on net sales of Duke licensed products by the Company or its sublicensee, with minimum aggregate royalties of $0.2 million payable following the Company’s achievement of certain commercial milestones. No sales of Duke licensed products or services have occurred since the effective date through September 30, 2019.

Certain alliance fee payments up to the greater of $0.3 million or a low double-digit percentage of the fees the Company receives from a third party in consideration of forming a strategic alliance may be required depending upon how the patent rights are commercialized. The Company must pay Duke the first $1.0 million of non-royalty payments it receives from a sublicensee, and thereafter a specified percentage of any additional nonroyalty payments it receives, subject to certain conditions. If Duke receives revenue as a result of a license or sublicense to a third-party in the field of small-molecule oncologics, it will pay the Company a specified percentage of the amount of such revenue in excess of $0.1 million. Duke is also a stockholder of the Company.

Wacker

In April 2019, the Company entered into a license agreement (“Wacker License Agreement”), with Wacker Biotech GmbH (“Wacker”), pursuant to which Wacker granted the Company an exclusive license under certain of Wacker’s intellectual property rights to use Wacker’s proprietary E. coli strain for the manufacture of PB2452 worldwide outside of specified Asian countries, and to commercialize PB2452, if approved, manufactured by the Company or on the Company’s behalf using Wacker’s proprietary E. coli strain throughout the world. The Company has the right to grant sublicenses under the license, subject to certain conditions as specified in the Wacker License Agreement. Under the terms of the agreement, the Company is required to pay a fixed, nominal per-unit royalty, which is subject to adjustment, and an annual license fee in a fixed Euro amount in the low to mid six digits. The agreement will be in force for an indefinite period of time, and upon the expiration of the Company’s royalty obligations, the license will be considered fully paid and will convert to a non-exclusive license. Either party may terminate the Wacker License Agreement for breach if such breach is not cured within a specified number of days. The Company incurred $82,000 in costs under the Wacker License Agreement for the three and nine months ended September 30, 2019.

Revenue

9 Months Ended

Sep. 30, 2019

Revenue From Contract With Customer [Abstract]

Revenue

12.

Revenue

Grant revenue

In February 2018, the Company received Small Business Innovation Research (“SBIR”) grants from the National Institutes of Health in an aggregate amount of $2.8 million to support the clinical development of PB1046 for the treatment of pulmonary arterial hypertension for the period from February 17, 2018 to July 31, 2020. In connection with the SBIR grants, the U.S. government will receive a non-exclusive, royalty-free license to use any technology the Company develops under such grants. The Company recognized $0.2 million and $1.1 million of revenue under the SBIR grants in the three and nine months ended September 30, 2019, respectively, and $0.4 million of revenue in the three and nine months ended September 30, 2018.

Revenue Under Collaborative Agreement

In April 2019, the Company entered into an agreement with ImmunoForge Co., Ltd. (“ImmunoForge”) for the exclusive, worldwide license of PB1023, a long-acting, recombinant glucagon-like peptide-1 analogue, for the treatment of certain diseases, including conditions related to sarcopenia. The Company received an upfront payment of $0.2 million upon execution of the contract and is entitled to receive $0.3 million within one year of the effective date of the agreement. The Company is eligible to receive milestone-based payments and mid-single digit royalty payments on net sales of licensed products, a percentage of which Duke University is entitled to receive pursuant to the Duke License. For the three and nine months ended September 30, 2019, the Company recognized zero and $0.5 million in revenue related to the upfront fee received from ImmunoForge upon the execution of the contract, respectively.

Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions

13.	Related Party Transactions

As described above in Note 11, the Company is party to the MedImmune License. AstraZeneca, the parent company of MedImmune, is a related party of the Company.

Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

14.	Subsequent Events

In October 2019, the Company drew $5.0 million from Tranche 3 of the 2019 Loan and concurrently issued to SVB and WestRiver warrants to purchase an aggregate of 24,262 shares of common stock with an exercise price of $3.88. Upon the draw of Tranche 3, the interest-only period of the 2019 Loan was extended to June 30, 2020, followed by an amortization period of 33 months of equal monthly payments of principal plus interest until paid in full.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

The Company manages its operations as a single reportable segment for the purposes of assessing performance and making operating decisions.

Use of Estimates

Concentrations of Credit Risk

Cash and Cash Equivalents

Restricted Cash

Fair Value of Financial Instruments

Property and Equipment

Leases

Long-Lived Assets

Preferred Stock Warrant Liability

Preclinical and Clinical Trial Accruals

Research and Development Expense

Research and development costs are expensed as incurred.

Stock-Based Compensation

Income Taxes

Grant Revenue

Revenue Under Collaborative Agreement

Net Loss Per Share

	As of September 30,
	2019		2018
Redeemable convertible preferred stock		—		13,200,115
Common stock options		2,481,403		1,315,625
Warrants to purchase common stock		125,333		—
Warrants to purchase redeemable convertible preferred stock		—		708,484
Total		2,606,736		15,224,224

Recent Accounting Pronouncements

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Schedule Of Outstanding Potentially Dilutive Securities Excluded In Calculation Of Diluted Net Loss Per Share

	As of September 30,
	2019		2018
Redeemable convertible preferred stock		—		13,200,115
Common stock options		2,481,403		1,315,625
Warrants to purchase common stock		125,333		—
Warrants to purchase redeemable convertible preferred stock		—		708,484
Total		2,606,736		15,224,224

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

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

			Fair Value Measurements at Reporting Date
	Total		Level 1		Level 2		Level 3
As of September 30, 2019:
Assets
Cash equivalents	$	81,521	$	81,521	$	—	$	—
As of December 31, 2018:
Assets
Cash equivalents	$	59,357	$	59,357	$	—	$	—

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2019

Property Plant And Equipment [Abstract]

Composition of Property and Equipment, Net

The following table presents the composition of property and equipment, net as of September 30, 2019 and December 31, 2018 (in thousands):

	As of			As of
	September 30, 2019			December 31, 2018
Lab equipment	$	2,105		$	1,764
Computer hardware, software and telephone		273			228
Furniture and fixtures		104			98
Leasehold improvements		67			50
Construction in progress		382			—
		2,931			2,140
Less accumulated depreciation		(1,909	)		(1,785	)
Property and equipment, net	$	1,022		$	355

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Payables And Accruals [Abstract]

Schedule of Composition of Accrued Expenses

The following table presents the composition of accrued expenses as of September 30, 2019 and December 31, 2018 (in thousands):

	As of		As of
	September 30, 2019		December 31, 2018
Accrued clinical and related costs	$	765	$	1,358
Accrued compensation and related costs		960		914
Accrued interest		54		194
Operating lease liability, short-term		239		—
Accrued other		295		305
Accrued expenses and other current liabilities	$	2,313	$	2,771

Debt (Tables)

9 Months Ended

Sep. 30, 2019

SVB and WestRiver

Summary of Future Principal Payments

Years Ending December 31,
2019 (remaining three months)	$	—
2020		2,852
2021		3,047
2022		3,255
2023		846
Thereafter		—
	$	10,000

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities as of September 30, 2019 are as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	72
2020		372
2021		377
2022		363
2023		272
Thereafter		776
Total future lease payments		2,232
Less: Present value adjustment		(416	)
Operating lease liabilities	$	1,816

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation Expense

Stock-based compensation expense has been reported in the Company’s condensed statements of operations for the three and nine months ended September 30, 2019 and 2018 as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
General and administrative	$	395	$	65	$	792	$	119
Research and development		96		31		207