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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	May 04, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Trading Symbol	DNLI
Entity Registrant Name	Denali Therapeutics Inc.
Entity Central Index Key	0001714899
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		94,441,892

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 44,001	$ 218,375
Short-term marketable securities	329,401	187,851
Prepaid expenses and other current assets	4,020	3,381
Total current assets	377,422	409,607
Long-term marketable securities	219,406	60,750
Property and equipment, net	14,860	14,923
Other non-current assets	2,265	1,441
Total assets	613,953	486,721
Current liabilities:
Accounts payable	1,377	2,716
Accrued liabilities	4,425	5,364
Accrued compensation	1,994	5,166
Contract liability	8,434
Deferred rent	874	855
Other current liabilities	63	63
Total current liabilities	17,167	14,164
Contract liability, less current portion	51,519
Deferred rent, less current portion	6,051	6,294
Other non-current liabilities	188	467
Total liabilities	74,925	20,925
Commitments and contingencies (Note 5)
Stockholders' equity:
Convertible preferred stock, $0.01 par value; 40,000,000 shares authorized as of March 31, 2018 and December 31, 2017; 0 shares issued and outstanding as of March 31, 2018 and December 31, 2017	0	0
Common stock, $0.01 par value; 400,000,000 shares authorized as of March 31, 2018 and December 31, 2017; 92,588,989 shares and 87,480,362 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively	1,252	1,201
Additional paid-in capital	754,438	656,660
Accumulated other comprehensive loss	(1,287)	(368)
Accumulated deficit	(215,375)	(191,697)
Total stockholders' equity	539,028	465,796
Total liabilities and stockholders' equity	$ 613,953	$ 486,721

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized	40,000,000	40,000,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	92,588,989	87,480,362
Common stock, shares outstanding	92,588,989	87,480,362

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Collaboration revenue	$ 641
Operating expenses:
Research and development	20,819	$ 18,470
General and administrative	5,570	3,274
Total operating expenses	26,389	21,744
Loss from operations	(25,748)	(21,744)
Interest income, net	2,070	424
Net loss	(23,678)	(21,320)
Other comprehensive loss:
Net unrealized loss on marketable securities, net of tax	(919)	(22)
Comprehensive loss	$ (24,597)	$ (21,342)
Net loss per share, basic and diluted	$ (0.26)	$ (2.36)
Weighted average number of shares outstanding, basic and diluted	89,560,576	9,017,425

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net loss	$ (23,678)	$ (21,320)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	854	731
Stock-based compensation expense	2,925	765
Net amortization of premiums and discounts on marketable securities	(387)	227
Gain on disposal of property and equipment	(44)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(1,613)	1,959
Accounts payable	(951)	(718)
Accrued and other current liabilities	(3,257)	(943)
Deferred rent	(225)	78
Contract liability	59,953
Other non-current liabilities		412
Net cash provided by (used in) operating activities	33,577	(18,809)
Investing activities
Purchase of marketable securities	(328,036)	(16,949)
Purchase of property and equipment	(537)	(868)
Maturities and sales of marketable securities	27,299	33,200
Net cash provided by (used in) investing activities	(301,274)	15,383
Financing activities
Issuance of common stock in connection with collaboration agreement	94,406
Proceeds from exercise of common stock options	219	324
Net cash provided by financing activities	93,239	324
Net decrease in cash, cash equivalents and restricted cash	(174,458)	(3,102)
Cash, cash equivalents and restricted cash at beginning of period	218,910	40,388
Cash, cash equivalents and restricted cash at end of period	44,452	37,286
Supplemental disclosures of cash flow information
Property and equipment purchases accrued but not yet paid	246	$ 98
Common Stock [Member]
Financing activities
Payments of issuance costs related to issuance of stock	(1,342)
Preferred Stock [Member]
Financing activities
Payments of issuance costs related to issuance of stock	$ (44)

Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

1.	Significant Accounting Policies

Organization and Description of Business

Denali Therapeutics Inc. (“Denali” or the “Company”) is a biopharmaceutical company, incorporated in Delaware, that discovers and develops therapeutics to defeat neurodegenerative diseases. The Company is headquartered in South San Francisco, California.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

Initial Public Offering

On December 7, 2017, the Company’s Registration Statement on Form S-1 was declared effective by the SEC for Denali’s initial public offering (“IPO”) of common stock. In connection with the IPO, the Company sold an aggregate of 15,972,221 shares of common stock, including 2,083,333 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a price to the public of $18.00 per share. The aggregate net proceeds received by the Company from the offering, net of underwriting discounts and commissions and offering expenses, were $264.3 million. Upon the closing of the IPO, all then-outstanding shares of Company convertible preferred stock converted into 60,365,020 shares of common stock. The related carrying value of $378.6 million was reclassified to common stock and additional paid-in capital.

Principles of Consolidation

These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. This subsidiary was dissolved in September 2016. All intercompany balances and transactions have been eliminated on consolidation.

The Company assesses whether it is the primary beneficiary of any variable interest entity (“VIE”) in which it has a variable interest at the inception of the arrangement and at each reporting date. This assessment is based on the Company’s power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the Company’s obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material to the condensed consolidated financial position and results of operations.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. Substantially all of the Company’s cash and cash equivalents are deposited in accounts with financial institutions that management believes are of high credit quality. Such deposits have and will continue to exceed federally insured limits. The Company maintains its cash with accredited financial institutions and accordingly, such funds are subject to minimal credit risk. The Company has not experienced any losses on its cash deposits.

The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and marketable securities and issuers of marketable securities to the extent recorded on the consolidated balance sheets. As of March 31, 2018 and December 31, 2017, the Company had no off-balance sheet concentrations of credit risk.

The Company is subject to a number of risks similar to other early-stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain regulatory and marketing approvals for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, protection of proprietary technology, the ability to make milestone, royalty or other payments due under any license or collaboration agreements, and the need to secure and maintain adequate manufacturing arrangements with third parties. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

Segments

The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources.

Restricted Cash

The Company’s restricted cash consists of the letter of credit for the Company’s headquarters building lease, and is included within other non-current assets on the accompanying condensed consolidated balance sheets.

Revenue Recognition

License and Collaboration Revenues

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of Topic 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606. The accounting treatment pursuant to Topic 606 is outlined below.

The terms of licensing and collaboration agreements entered into typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Amounts received prior to satisfying the revenue recognition criteria are recorded as contract liabilities in the Company’s consolidated balance sheets. If the related performance obligation is expected to be satisfied within the next twelve months this will be classified in current liabilities. Amounts recognized as revenue prior to receipt are recorded as contract assets in the Company’s consolidated balance sheets. If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer.

At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right.

The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices. The relative selling price for each deliverable is estimated using objective evidence if it is available. If objective evidence is not available, the Company uses its best estimate of the selling price for the deliverable.

Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the good or service promised to the customer.

After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception.

Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.

Net Loss per Share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the net loss for each period presented.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014–09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606), and further updated through ASU 2016-12 (“ASU 2016-12”), which amends the existing accounting standards for revenue recognition. ASU 2014–09 is based on principles that govern the recognition of revenue at an amount to which an entity expects to be entitled when products are transferred to customers. This guidance is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2017, for public entities. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. This standard was adopted on January 1, 2018 using a full retrospective application. There was no impact to the consolidated financial statements upon adoption of ASU 2014-09 as the Company had not recognized any revenue through December 31, 2017.

In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842), which supersedes the guidance in former ASC 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this standard on January 1, 2019. ASU 2016-02 is expected to impact the Company’s consolidated financial statements as the Company has certain operating lease arrangements for which the Company is the lessee. Management is currently evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position and results of operations. Management expects that the adoption of this standard will result in the recognition of an asset for the right to use a leased facility on the Company’s balance sheet, as well as the recognition of a liability for the lease payments remaining on the lease. While the balance sheet presentation is expected to change, management does not expect a material change to the consolidated statement of operations.

In November 2016, the FASB issued ASU No. 2016-18 (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash. The purpose of ASU 2016-18 is to clarify the guidance for and presentation of restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted. This standard was adopted on January 1, 2018, the condensed consolidated statements of cash flows have been updated to reconcile cash, cash equivalents and restricted cash, and Note 3 includes a reconciliation of cash, cash equivalents and restricted cash for all periods presented.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective for annual and interim periods beginning after December 15, 2017 and application is prospective. Early adoption was permitted. This standard was adopted as of January 1, 2018 and will be applied prospectively to any award modified after the adoption date.

Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

2.	Fair Value Measurements

Assets measured at fair value at each balance sheet date are as follows (in thousands):


	March 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	32,718	$	—	$	—	$	32,718
U.S. government treasuries		1,500		—		—		1,500
Corporate debt securities		—		2,000		—		2,000
Short-term:
U.S. government treasuries		141,048		—		—		141,048
U.S. government agency securities		—		115,433		—		115,433
Corporate debt securities		—		62,213		—		62,213
Commercial paper		—		10,707		—		10,707
Long-term:
U.S. government treasuries		110,845		—		—		110,845
U.S. government agency securities		—		48,992		—		48,992
Corporate debt securities		—		59,569		—		59,569

Total marketable securities		251,893		296,914		—		548,807

Total fair value measurements	$	286,111	$	298,914	$	—	$	585,025


	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	212,868	$	—	$	—	$	212,868
Short-term:
U.S. government treasuries		42,587		—		—		42,587
U.S. government agency securities		—		106,139		—		106,139
Corporate debt securities		—		39,125		—		39,125
Long-term:
U.S. government treasuries		39,848		—		—		39,848
U.S. government agency securities		—		19,911		—		19,911
Corporate debt securities		—		991		—		991

Total marketable securities		82,435		166,166		—		248,601

Total fair value measurements	$	295,303	$	166,166	$	—	$	461,469

The carrying amounts of accounts payable and accrued liabilities approximate their fair values due to their short-term maturities.

The Company’s Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly.

There were no transfers of assets or liabilities between the fair value measurement levels during the three months ended March 31, 2018 or 2017.

- 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

Cash and Marketable Securities

3 Months Ended

Mar. 31, 2018

Cash and Cash Equivalents [Abstract]

Cash and Marketable Securities

3.	Cash and Marketable Securities

Cash, cash equivalents and restricted cash

A reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the amount reported within the condensed consolidated statements of cash flows is shown in the table below (in thousands):


	March 31, 2018		December 31, 2017		March 31, 2017
Cash and cash equivalents	$	44,001	$	218,375	$	36,751
Restricted cash included within prepaid expenses and other current assets		—		84		84
Restricted cash included within other non-current assets		451		451		451

Total cash, cash equivalents, and restricted cash	$	44,452	$	218,910	$	37,286

Marketable Securities

All marketable securities were considered available-for-sale at March 31, 2018 and December 31, 2017. The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the tables below (in thousands):


	March 31, 2018
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses			Aggregate Fair Value
Short-term marketable securities:
U.S. government treasuries	$	141,217	$	—	$	(169	)	$	141,048
U.S. government agency securities		115,687		—		(254	)		115,433
Corporate debt securities		62,371		—		(158	)		62,213
Commercial paper		10,707		—		—			10,707

Total short-term marketable securities		329,982		—		(581	)		329,401
Long-term marketable securities:
U.S. government treasuries		111,054		—		(209	)		110,845
U.S. government agency securities		49,188		—		(196	)		48,992
Corporate debt securities		59,869		—		(300	)		59,569

Total long-term marketable securities		220,111		—		(705	)		219,406

Total	$	550,093	$	—	$	(1,286	)	$	548,807


	December 31, 2017
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses			Aggregate Fair Value
Short-term marketable securities:
U.S. government treasuries	$	42,614	$	—	$	(27	)	$	42,587
U.S. government agency securities		106,368		—		(229	)		106,139
Corporate debt securities		39,197		—		(72	)		39,125

Total short-term marketable securities		188,179		—		(328	)		187,851
Long-term marketable securities:
U.S. government treasuries		39,868		—		(20	)		39,848
U.S. government agency securities		19,931		—		(20	)		19,911
Corporate debt securities		991		—		—			991

Total long-term marketable securities		60,790		—		(40	)		60,750

Total	$	248,969	$	—	$	(368	)	$	248,601

As of March 31, 2018 and December 31, 2017, certain of the Company’s marketable securities were in an unrealized loss position. The Company determined that it had the ability and intent to hold all marketable securities that have been in a continuous loss position until maturity or recovery, thus there has been no recognition of any other-than-temporary impairment for the three months ended March 31, 2018. All marketable securities with unrealized losses as of each balance sheet date have been in a loss position for less than twelve months or the loss is not material.

All of the Company’s marketable securities have an effective maturity of less than two years.

License and Collaboration Agreements

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

License and Collaboration Agreements

4.	License and Collaboration Agreements

Takeda

On January 3, 2018, the Company entered into a Collaboration and Option Agreement (“Takeda Collaboration Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”), pursuant to which the Company granted Takeda an option in respect of three programs to develop and commercialize, jointly with the Company, certain biologic products that are enabled by Denali’s blood-brain barrier (BBB) delivery technology and intended for the treatment of neurodegenerative disorders. The three programs are Denali’s ATV:BACE1/Tau and ATV: TREM2 programs, as well as a third identified discovery stage program. The Takeda Collaboration Agreement became effective on February 12, 2018 when the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 were satisfied.

Under the Takeda Collaboration Agreement and unless otherwise agreed jointly between both parties, Denali will be responsible, at its cost, for conducting activities relating to pre-IND development of biologic products directed to the three identified targets and enabled by its BBB delivery technology targeting transferrin receptor during the applicable research period. The period through which the option can be exercised continues for each target until the first biologic product directed to the relevant target is IND-ready or about five years after selection of the target, whichever is earlier.

The Takeda Collaboration Agreement provided that Takeda pay a $40.0 million upfront payment, and up to an aggregate of $25.0 million with respect to each program directed to a target and based upon the achievement of certain preclinical milestone events, up to $75.0 million in total. The upfront payment of $40.0 million was received in February 2018, as well as the first preclinical milestone payment of $5.0 million related to one of the programs.

If Takeda exercises its option with respect to a particular target, then Takeda will have the right to develop and commercialize, jointly with the Company, a specified number of biologic products enabled by its BBB delivery technology that were developed during the research period and which are directed to the relevant target, and the Company will grant to Takeda a co-exclusive license under the intellectual property the Company controls related to those biologic products.

Takeda is obligated to pay Denali a $5.0 million option fee for each target for which Takeda exercises its option, up to $15.0 million in total.

In addition, Takeda may be obligated to pay Denali up to an aggregate of $707.5 million upon achievement of certain clinical and regulatory milestone events if Takeda exercises its option for all three collaboration programs. Takeda may also be obligated to pay Denali up to $75.0 million per biologic product upon achievement of a certain sales-based milestone, or an aggregate of $225.0 million if one biologic product from each program achieves the milestone.

If Takeda exercises its option for a particular target, Denali and Takeda will share equally the development and commercialization costs, and, if applicable, the profits, for each collaboration program. However, for each collaboration program, the Company may elect not to continue sharing development and commercialization costs, or Takeda may elect to terminate Denali’s cost-profit sharing rights and obligations if, following notice from Takeda and a cure period, the Company fails to satisfy its cost sharing obligations with respect to the relevant collaboration program. After such an election by the Company or termination by Takeda becomes effective, Denali will no longer be obligated to share in the development and commercialization costs for the relevant collaboration program, and will not share in any profits from that collaboration program. Instead the Company will be entitled to receive tiered royalties. The royalty rates will be in the low- to mid-teen percentages on net sales, or low- to high-teen percentages on net sales if certain co-funding thresholds have been met at the time of the Company’s election to opt out of co-development or Takeda’s termination of Denali’s cost-profit sharing rights and obligations, and, in each case, these royalty rates will be subject to certain reductions specified in the Takeda Collaboration Agreement. Takeda will pay these royalties for each biologic product included in the relevant collaboration program, on a country-by-country basis, until the latest of (i) the expiration of certain patents covering the relevant biologic product, (ii) the expiration of all regulatory exclusivity for that biologic product, and (iii) an agreed period of time after the first commercial sale of that biologic product in the applicable country, unless biosimilar competition in excess of a significant level specified in the Takeda Collaboration Agreement occurs earlier, in which case Takeda’s royalty obligations in the applicable country would terminate.

For each collaboration program for which costs and profits are shared with Takeda, Denali will lead the conduct of clinical activities for each indication through the first Phase 2 trial with a clinical outcomes-based efficacy endpoints, and Takeda will lead the conduct of all subsequent clinical activities for that indication. Further, Denali and Takeda will jointly commercialize biologic products included in the relevant collaboration program in the United States and China. Unless Denali has opted out of cost-sharing for two collaboration programs, it has the right to lead commercialization activities in the United States for one collaboration program and Takeda will lead commercialization activities in the United States for all collaboration programs for which Denali does not lead commercialization activities. Further, Takeda will lead commercialization activities in China and will solely conduct commercialization activities in all other countries. The Company has the right to lead all manufacturing activities for all collaboration programs for which the parties are sharing costs and profits.

Each party may terminate the Takeda Collaboration Agreement in its entirety, or with respect to a particular collaboration program, as applicable, if the other party remains in material breach of the Takeda Collaboration Agreement following a cure period to remedy the material breach. Takeda may terminate the Takeda Collaboration Agreement in its entirety or with respect to any particular collaboration program, for convenience and after giving a specified amount of prior notice, but Takeda may not do so for a certain period of time after the Effective Date of the Takeda Collaboration Agreement. Takeda may also terminate the Takeda Collaboration Agreement with respect to any collaboration program if the joint steering committee (“JSC”) established under the Takeda Collaboration Agreement unanimously agrees that a material safety event has occurred with respect to the applicable collaboration program. Denali may terminate the Takeda Collaboration Agreement with respect to a particular collaboration program if Takeda fails to conduct material development and commercial activities for a specified period of time with respect to a collaboration program, unless Takeda cures such failure within a certain period of time. Denali and Takeda may each terminate the Takeda Collaboration Agreement in its entirety if the other party is declared insolvent or in similar financial distress or if, subject to a specified cure period, the other party challenges any patents licensed to it under the Takeda Collaboration Agreement.

Pursuant to the terms of the Takeda Collaboration Agreement, the Company entered into a common stock purchase agreement (the “Stock Purchase Agreement”) with Takeda on January 3, 2018, pursuant to which Takeda purchased 4,214,559 shares of Denali’s common stock (the “Shares”) for an aggregate purchase price of $110.0 million. The sale of the Shares closed on February 23, 2018. The fair market value of the common stock sold to Takeda was $94.4 million, based on the closing stock price of $22.40 on the date of issuance, resulting in a $15.6 million premium paid to the Company above the fair value of the Company’s common stock which was credited to contract liability in our condensed consolidated balance sheet.

The Company believes that the Takeda Collaboration Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Agreements. Further, during the research period, the Company believes that the arrangement is a contract with a customer as defined in ASC 606 Revenue From Contracts With Customers. The Takeda Collaboration Agreement and the Stock Purchase Agreement are being accounted for as one arrangement because they were entered into at the same time with interrelated financial terms.

The Company identified performance obligations during the research period consisting of the license, the development options, and JSC participation together with the research services for each collaboration program. The license rights, JSC involvement, option and research services are considered to be a single performance obligation for each program since the research services are highly interrelated with the option and JSC involvement and will significantly modify the license. The performance obligations under each of the three programs are separate since the activities and risks under the programs are distinct.

The Company has determined that all other goods or services which are contingent upon Takeda exercising its option for each program are not considered performance obligations at the inception of the arrangement.

The transaction price at inception includes fixed consideration consisting of the upfront fee of $40.0 million, the $15.6 million premium on the sale of common stock, and the first preclinical milestone payment of $5.0 million. It also included variable consideration of $26.0 million relating to future milestones that are not constrained. The amount of variable consideration was estimated using the most likely amount method. The remaining $44.0 million of preclinical milestones are considered constrained at the inception of the arrangement since the Company could not conclude it is probable that a significant reversal in the amount recognized will not occur. Additionally, cost and profit sharing income, and the development and commercial milestones as outlined above, have not been considered given Takeda has not exercised its options for the development and commercial phases for each program. This will be reassessed at each reporting period.

The transaction price has been ascribed in its entirety to the three performance obligations identified in the research term of the Takeda Collaboration Agreement.

Revenue is recognized when, or as, the Company satisfies its performance obligations by transferring the promised services to Takeda. Revenue will be recognized over time using the input method, based on costs incurred to perform the research services, since the level of costs incurred over time is thought to best reflect the transfer of services to Takeda.

A contract liability of $60.0 million is recorded on the balance sheet at March 31, 2018, which relates to the three performance obligations identified, with such amounts to be recognized over the period of the pre-IND research services, which is expected to be several years.

Revenue recognized relating to future milestone payments of approximately $0.2 million, for which the Company concluded that it is probable that a significant reversal in the amount recognized will not occur, is presented net of contract liability on the balance sheet.

Significant changes in the net contract liability balance during the period are as follows (in thousands):


	Contract liability
Balance at January 1, 2018	$	—
Increases due to cash received, excluding amounts recognized as revenue during the period		60,173
Decreases due to revenue recognized in the period for which cash has not yet been received		(220	)

Balance at March 31, 2018	$	59,953

There are no receivables or net contract assets as of March 31, 2018 associated with this arrangement.

In assessing this arrangement, management was required to exercise considerable judgment in estimating revenue to be recognized. Management applied judgment in determining the separate performance obligations in the research period, estimating variable consideration, and estimating total future costs when using the input method.

F-star

In August 2016, the Company entered into a License and Collaboration Agreement (“F-star Collaboration Agreement”) with F-star Gamma Limited (“F-star Gamma”), F-star Biotechnologische Forschungs-Und Entwicklungsges M.B.H and F-star Biotechnology Limited (collectively, “F-star”). The goal of the collaboration is the development of certain constant Fc-domains of an antibody with non-native antigen binding activity (“Fcabs”), to enhance delivery of therapeutics across the BBB into the brain. The collaboration leverages F-star’s modular antibody technology and the Company’s expertise in the development of therapies for neurodegenerative diseases.

Under the terms of the F-star Collaboration Agreement, the Company can nominate up to three Fcab targets (“Accepted Fcab Targets”), within the first three years of the date of the F-star Collaboration Agreement; and the Company has selected transferrin receptor (“TfR”) as the first Accepted Fcab Target. With respect to each Accepted Fcab Target, the Company can nominate up to eight Fab targets (“Accepted Fab Targets”), which are targets bound by the variable domains of an antibody or other therapeutic modalities (“Fabs”). For each accepted Fcab target, the Company is obligated to use commercially reasonable efforts during the research term to perform development activities in accordance with certain specified development plans. Under the terms of the F-star Collaboration Agreement, the Company received non-exclusive licenses under certain intellectual property to conduct technology development to discover and develop Fcabs. The Company is obligated to assign to F-star certain patents and know-how that the Company generates under the F-star Collaboration Agreement related to F-star’s platform technology or certain Fcabs identified solely by F-star and the Company received a non-exclusive license under certain of F-star Biotechnology’s platform patents and know-how to develop and commercialize products in connection with the delivery of therapeutics across the BBB, subject to certain specified restrictions. F-star retains the right to use its intellectual property, including any intellectual property that the Company and F-star jointly own pursuant to the terms of the F-star Collaboration Agreement, outside the scope of the licenses granted to the Company.

Under the terms of the F-star Collaboration Agreement, the Company paid F-star Gamma an upfront fee of $5.5 million, which includes selection of the first Accepted Fcab Target. The Company is obligated to pay a one-time fixed fee in the low single-digit millions for each additional Accepted Fcab Target the Company selects, technical milestone payments for each Accepted Fcab Target, up to a maximum of $15.0 million in the aggregate for all Accepted Fcab Targets, and, at specified times, monthly exclusivity fees for Accepted Fcab Targets and Accepted Fab Targets, which may be eliminated in certain circumstances. The Company is also responsible for certain research costs incurred by F-star in conducting activities under each agreed development plan, for up to 24 months. These research costs for the agreed TfR development plan will be up to $2.1 million.

Either party may terminate the agreement if the other party materially breaches the agreement, subject to specified notice and cure provisions, or for the other party’s bankruptcy or insolvency. In addition, F-star Gamma may terminate the agreement if the Company challenges any of the patent rights licensed to it by F-star. The Company is able to terminate the agreement for convenience, either in its entirety or on an Accepted Fcab Target-by-Accepted Fcab Target basis or an Accepted Fab Target-by-Accepted Fab Target basis, on 90 days’ prior written notice to F-star. Unless earlier terminated, the agreement with F-star will remain in effect until all royalty and milestone payment obligations to F-star Gamma expire.

In connection with the entry into the F-star Collaboration Agreement, the Company also purchased an option for an upfront option fee of $0.5 million (the “buy-out-option”), to acquire all of the outstanding shares of F-star Gamma pursuant to a pre-negotiated buy-out option agreement (the “Option Agreement”). The Company must elect whether to exercise its buy-out option before the earlier of (i) dosing of the fifth patient dosed in the first Phase 1 trial of an antibody that binds to an Accepted Fab Target and an Accepted Fcab Target, (ii) the fourth anniversary of the first delivery by F-star of an Fcab meeting certain delivery criteria, and (iii) five and one half years after the delivery by the Company of a notice that it is progressing an Fcab identified from the Company’s library that binds to an Accepted Fcab Target. If the Company exercises this buy-out option, it will be obligated to make initial exercise payments ranging from $18.0 million to $50.0 million in the aggregate, plus the estimated net cash held by F-star Gamma at the time of such exercise. In addition, it will be required to make certain contingent payments upon the achievement of certain preclinical, clinical, regulatory and commercial milestones, up to a maximum amount of $447.0 million in the aggregate. The amount of the initial exercise and contingent payments varies based on whether F-star delivers an Fcab that meets pre-defined criteria, whether the Fcab has been identified solely by the Company or solely by F-star or jointly by the Company and F-star and the timing of the Company’s exercise of the buy-out option. Following exercise of the buy-out option, the Company will not be required to make any further milestone or royalty payments under the F-star Collaboration Agreement. If the Company exercises the buy-out option, then F-star Biotechnologische Forschungs-Und Entwicklungsges M.B.H and F-star Biotechnology continue to be prohibited from developing, commercializing and manufacturing any antibody or other molecule that incorporates any Selected Fcab, or any Selected Fcab as a standalone product, and from authorizing any third party to take any such action. If the Company does not exercise its option to acquire F-star Gamma prior to the expiration of the buy-out option period, then, from the lapse of the buy-out option period until the Company’s rights with respect to an Accepted Fab Target expire or terminate, F-star isprohibited from developing, commercializing and manufacturing any antibody or other molecule that contains both a Selected Fcab and a Fab that specifically binds to the relevant Accepted Fab Target.

If the Company does not exercise the buy-out option, then with respect to each Accepted Fab Target, the Company has the right to obtain from F-star an exclusive, worldwide license to certain intellectual property to develop and commercialize licensed products that contain (i) a Fab that specifically binds to such Accepted Fab Target and (ii) an Fcab that the Company or F-star identifies, either solely or jointly, and that specifically binds to an Accepted Fcab Target, for up to eight Accepted Fab Targets per each Accepted Fcab Target. Each time the Company exercises such license option, it will be obligated to pay F-star Gamma (i) a one-time fixed fee in the low single-digit millions, (ii) milestone payments upon the achievement of certain clinical development and commercial milestones, up to a maximum of $362.5 million in the aggregate; (iii) additional sales-based milestones if net sales of licensed products achieve certain specified levels, up to a maximum amount payable to F-star of $650.0 million in the aggregateand (iv) low-to-mid single-digit percentage royalties on net sales of licensed products. Such amounts may be reduced by a specified percentage depending on the origin of the Fcab incorporated in the applicable licensed product and whether F-star delivers to the Company an Fcab that meets pre-defined criteria. The Company has the right to credit a certain amount of royalty payments that it pays to third parties with respect to certain licensed products against the Company’s royalty obligation to F-star Gamma, up to a maximum reduction of fifty percent. The Company’s royalty payment obligations will expire on a country-by-country and licensed product-by-licensed product basis upon the later of (a) the expiration of the last valid claim of a licensed patent covering such licensed product in such country, (b) the expiration of regulatory exclusivity for such licensed product in such country and (c) the twelfth anniversary of the first commercial sale of such licensed product in such country.

The Company recognized the upfront option fee of $0.5 million within other non-current assets recorded at cost. This asset will be assessed for potential impairment on an ongoing basis. No impairment charge was recognized during the three months ended March 31, 2018, and 2017, respectively.

The Company determined that F-star Gamma is and continues to be a variable interest entity and that the Company holds a variable interest in F-star Gamma’s intellectual property assets and the related potential future product candidates these assets may produce through the F-star Collaboration Agreement and the Option Agreement. However, the Company concluded that its governance role in the collaboration, which is specified by the terms of a joint steering committee, does not provide the Company the power to direct the activities of F-star Gamma that most significantly impact F-star Gamma’s economic performance. Based on this conclusion, the Company is not considered to be the primary beneficiary of F-star Gamma; and therefore F-star Gamma is not subject to consolidation by the Company.

The Company recognized $0.3 million of research and development expense related to the funding of F-star Gamma research costs during each of the three months ended March 31, 2018 and 2017.

The $0.5 million option fee recorded in other non-current assets on the Company’s balance sheet is the only asset or liability recorded that relates to the Company’s variable interest in F-star Gamma at March 31, 2018 and December 31, 2017. The upfront payments of $0.5 million and $5.5 million, along with 1) the obligation to fund certain future research costs, 2) any future Fcab selection fee, technical milestone payments or monthly exclusivity fees and 3) any future license fees or pre-commercial milestone payments represent the Company’s maximum exposure to loss under the arrangements with F-star. The ultimate expense that the Company incurs under the arrangements with F-Star cannot be quantified at this time as the amount will vary based on the timing and outcome of future research activities.

Genentech

In June 2016, the Company entered into an Exclusive License Agreement with Genentech, Inc. (“Genentech”). The agreement gives the Company access to Genentech’s LRRK2 small molecule program for Parkinson’s disease. Under the agreement, Genentech granted the Company (i) an exclusive, worldwide, sublicenseable license under Genentech’s rights to certain patents and patent applications directed to small molecule compounds which bind to and inhibit LRRK2 and (ii) a non-exclusive, worldwide, sublicenseable license to certain related know-how, in each case, to develop and commercialize certain compounds and licensed products incorporating any such compound. The Company is obligated to use commercially reasonable efforts during the first three years of the agreement to research, develop and commercialize at least one licensed product.

As consideration, the Company paid an upfront fee of $8.5 million and a technology transfer fee of $1.5 million, both of which were recognized as research and development expense for the year ended December 31, 2016.

The Company may owe Genentech milestone payments upon the achievement of certain development, regulatory, and commercial milestones, up to a maximum of $315.0 million in the aggregate, as well as royalties on net sales of licensed products ranging from low to high single-digit percentages, with the exact royalty rate dependent on various factors, including (i) whether the compound incorporated in the relevant licensed product is a Genentech-provided compound or a compound acquired or developed by the Company, (ii) the date a compound was first discovered, derived or optimized by the Company, (iii) the existence of patent rights covering the relevant licensed product in the relevant country, (iv) the existence of orphan drug exclusivity covering a licensed product that is a Genentech-provided compound and (v) the level of annual net sales of the relevant licensed product. The Company also has the right to credit a certain amount of third-party royalty and milestone payments against royalty and milestone payments owed to Genentech, up to a maximum reduction of fifty percent. The Company’s royalty payment obligations will expire on a country-by-country and licensed product-by-licensed product basis upon the later of (a) ten years after the first commercial sale of such licensed product in such country and (b) the expiration of the last valid claim of a licensed patent covering such licensed product in such country.

Genentech may terminate the agreement if the Company challenges any of the patent rights licensed to the Company by Genentech, or if the Company materially breaches the agreement, subject to specified notice and cure provisions, or enters into bankruptcy or insolvency proceedings. If Genentech terminates the agreement for the Company’s material breach, bankruptcy or insolvency after the Company has made a milestone payment to Genentech, then the Company is obligated to grant to Genentech an exclusive right of first negotiation with respect to certain of the Company’s patents, know-how and regulatory filings directed to Genentech-provided compounds. The Company does not have the right to terminate the agreement without cause, but may terminate the agreement for Genentech’s material breach, subject to specified notice and cure provisions.

Unless earlier terminated, the agreement with Genentech will continue in effect until all of the Company’s royalty and milestone payment obligations to Genentech expire. Following expiration of the agreement, the Company will retain the licenses under the intellectual property Genentech licensed to the Company on a non-exclusive, royalty-free basis.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5.	Commitments and Contingencies

Lease Obligations

In September 2015, the Company entered into a non-cancelable operating lease for its corporate headquarters comprising 38,109 of rentable square feet in a building in South San Francisco (“Headquarters Lease”). The Headquarters Lease commenced on August 1, 2016 with a lease term of eight years. The Company has an option to extend the lease term for a period of five years by giving the landlord written notice of the election to exercise the option at least nine months, but not more than twelve months, prior to the original expiration of the lease term. The Headquarters Lease provides for monthly base rent amounts escalating over the term of the lease. In addition, the Headquarters Lease provides both a tenant improvement allowance (“TIA”) of up to $7.4 million, of which $1.9 million will be repaid to the landlord in the form of additional monthly rent with interest applied. This additional monthly rent commenced in November 2016 when the entire TIA was utilized, and results in an increase of base rent of $0.4 million per year over the eight year lease term.

The total $7.4 million TIA has been recorded as leasehold improvements and deferred rent liability on the condensed consolidated balance sheet. The Company is amortizing the deferred rent liability as a reduction of rent expense and the leasehold improvement through an increase of depreciation expense of leasehold improvements ratably over the lease term. Under the terms of the Headquarters Lease, the Company was required to pay a security deposit of $0.5 million, which is recorded as other non-current assets in the accompanying condensed consolidated balance sheets.

The Company recognizes rent expense on a straight-line basis over the non-cancelable lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Where leases contain escalation clauses, rent abatements, and/or concessions such as rent holidays and landlord or tenant incentives or allowances, the Company applies them in the determination of straight-line rent expense over the lease term. The Company records tenant improvement allowances as deferred rent and associated expenditures as leasehold improvements that are being amortized over the shorter of their estimated useful life or the term of the lease. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed by management to be reasonably assured at lease inception.

As of March 31, 2018, the future minimum lease payments under the Headquarters Lease are as follows (in thousands):


Year Ended December 31:
2018 (nine months)	$	1,947
2019		2,664
2020		2,745
2021		2,829
2022		2,915
2023 and later		4,790

	$17,890

Rent expense for the three months ended March 31, 2018 and 2017 was $0.4 million and $0.6 million, respectively.

Indemnification

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, lessors, business partners, board members, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company, negligence or willful misconduct of the Company, violations of law by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s balance sheet, statements of comprehensive loss, or statements of cash flows.

Commitments

Effective September 2017, the Company entered into a Development and Manufacturing Services Agreement as amended (“DMSA”) with Lonza Sales AG (“Lonza”) for the development and manufacture of biologic products. Under the DMSA, the Company will execute purchase orders based on project plans authorizing Lonza to provide development and manufacturing services with respect to certain of the Company’s antibody and enzyme products, and will pay for the services provided and batches delivered in accordance with the DMSA and project plan. As of March 31, 2018, the Company had executed the First Amendment to the DMSA (“First Amendment”) and the Second Amendment to the DMSA (“Second Amendment”), totaling $0.8 million and $11.8 million, respectively, for the development and manufacture of biologic products. The activities under both the First Amendment and the Second Amendment commenced in January 2018 and are expected to be completed in May 2019 and April 2024, respectively. During the three months ended March 31, 2018, the Company incurred costs of $0.1 million and made payments of $0.1 million for the development and manufacturing services rendered under the agreement. As of March 31, 2018, the Company had total non-refundable purchase commitments of $4.6 million under the DMSA.

Stock-Based Awards

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Awards

6.	Stock-Based Awards

2017 Equity Incentive Plan

In December 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan”), which initially reserved 6,379,238 shares for the issuance of stock options, restricted stock and other stock awards, to employees, non-employee directors, and consultants under terms and provisions established by the Board of Directors and approved by the stockholders. Awards granted under the 2017 Plan expire no later than ten years from the date of grant. For stock options, the option price shall not be less than 100% of the estimated fair value on the day of grant. Options granted typically vest over a four-year period but may be granted with different vesting terms.

2015 Stock Incentive Plan

In May 2015, the Company adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which as amended, reserved 8,325,000 shares for the issuance of stock options, non-qualified stock options, restricted stock and other stock awards, to employees, non-employee directors, and consultants under terms and provisions established by the Board of Directors and approved by the stockholders. Awards granted under the 2015 Plan expire no later than ten years from the date of grant. For incentive stock options and non-statutory stock options, the option price shall not be less than 100% of the estimated fair value on the day of grant. For all stock options granted between August 2015 and February 2016 with an exercise price of $0.68, a deemed fair value of $1.20 per share was used in calculating stock-based compensation expense, which was determined using management hindsight. Options granted typically vest over a four-year period but may be granted with different vesting terms.

Upon adoption of the 2017 Plan, no new awards or grants are permitted under the 2015 Plan, and the 169,238 shares that were then unissued and available for future award under the 2015 Plan became available under the 2017 Plan. The 2015 Plan will continue to govern restricted stock awards and option awards previously granted thereunder.

As of March 31, 2018, there were 3,522,964 shares available for the Company to grant under the 2017 Plan.

Stock Option Activity

The following table summarizes option award activity under the 2017 Plan and the 2015 Plan:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average remaining contractual life		Aggregate Intrinsic Value
						(years)		(in thousands)
Balance at December 31, 2017		6,689,479		$	4.08		8.37	$	77,317
Options granted		2,555,504			22.10
Options exercised		(81,735	)		2.67
Options forfeited		(65,970	)		3.48

Balance at March 31, 2018		9,097,278		$	9.16		8.71	$	95,790

Options vested and expected to vest at March 31, 2018		7,352,546		$	11.17		9.02	$	62,622

Options exercisable at March 31, 2018		1,468,625		$	3.32		8.26	$	24,040

Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding options. The total intrinsic value of options exercised was $1.3 million and $1.8 million for the three months ended March 31, 2018 and 2017, respectively. During the three months ended March 31, 2018 and 2017, the weighted-average grant-date fair value of the options vested was $2.90 and $1.06 per share, respectively. The weighted-average grant date fair value of options granted during the three months ended March 31, 2018 and 2017 was $16.36 and $3.98 per share, respectively.

Stock Options Granted to Employees with Service-Based Vesting

The estimated fair value of stock options granted to employees were calculated using the Black-Scholes option-pricing model using the following assumptions:


	Three Months Ended March 31,
	2018	2017
Expected term (in years)	6.08	6.08
Volatility	86.0% - 87.5%	90.5% - 91.3%
Risk-free interest rate	2.6% - 2.7%	2.0% - 2.3%
Dividend yield	—	—

Expected Term: The expected term represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term).

Expected Volatility: The Company uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry that were deemed to be representative of future stock price trends as the Company does not have sufficient trading history for its common stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-Free Interest Rate: The Company based the risk-free interest rate over the expected term of the options based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of the grant.

Expected Dividend: The Company has not paid and does not anticipate paying any dividends in the near future. Therefore, the expected dividend yield was zero.

Early Exercise of Stock Options

The Company permits early exercise of certain stock options prior to vesting by certain directors and officers. Any shares issued pursuant to unvested options are restricted and subject to repurchase by the Company until the conditions for vesting are met. The amounts paid for shares purchased under an early exercise of stock options and subject to repurchase by the Company are reported in stockholders’ equity once those shares vest. Upon termination of employment of an option holder, the Company has the right to repurchase, at the original purchase price, any unvested restricted shares.

A total of $0.3 million and $31,874 was reclassified from other non-current liabilities to stockholders’ equity during the three months ended March 31, 2018 and 2017, respectively, related to vesting of early exercised options. $0.2 million and $0.5 million related to unvested early exercised options remained in other non-current liabilities as of March 31, 2018 and December 31, 2017, respectively.

Performance and Market Contingent Stock Options Granted to Employees

In August and November 2015, the Board of Directors granted 1,619,738 and 125,000 performance- and market- contingent awards to members of the senior management team, respectively. These awards have an exercise price of $0.68 per share.

These awards have two separate market triggers for vesting based upon either (i) the successful achievement of stepped target closing prices on a national securities exchange for 90 consecutive trading days later than 180 days after the Company’s initial public offering for its common stock, or (ii) stepped target prices for a change in control transaction. By definition, the market condition in these awards can only be achieved after the performance condition of a liquidity event has been achieved. As such, the requisite service period is based on the estimated period over which the market condition can be achieved. When a performance goal is deemed to be probable of achievement, time-based vesting and recognition of stock-based compensation expense commences. In the event any the milestones are not achieved by the specified timelines, such award will terminate and no longer be exercisable with respect to that portion of the shares. The maximum potential expense associated with the performance- and market- contingent awards is $6.2 million ($5.8 million and $0.4 million of general and administrative and research and development expense, respectively) if all of the performance and market conditions are achieved as stated in the option agreement.

The Company uses a lattice model with a Monte Carlo simulation to value stock options with performance and market conditions. This valuation methodology utilizes the estimated fair value of the Company’s common stock on grant date and several key assumptions, including expected volatility of the Company’s stock price based on comparable public companies, risk-free rates of return and expected dividend yield.

Stock Options Granted to Non-Employees with Service-Based Vesting Valuation Assumptions

Stock-based compensation related to stock options granted to non-employees is recognized as the stock options are earned. The estimated fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option-pricing model with the following assumptions:


	Three Months Ended March 31,
	2018	2017
Expected term (in years)	7.39 - 8.11	8.25 - 9.45
Volatility	89.1% - 90.5%	95.5% - 98.0%
Risk-free interest rate	2.7% - 2.7%	2.3% - 2.4%
Dividend yield	—	—

Restricted Stock Activity

The following table summarizes restricted stock activity:


	Shares			Weighted- Average Fair Value at Date of Grant per Share
Unvested at December 31, 2017		2,293,788		$	0.18
Granted		—			—
Vested		(718,584	)		0.18
Forfeited		—			—

Unvested at March 31, 2018		1,575,204		$	0.18

Vested and expected to vest – March 31, 2018		1,575,204		$	0.18

At March 31, 2018, there was $0.3 million of total unrecognized compensation cost related to unvested restricted stock, all which is expected to be recognized over a remaining weighted-average vesting period of 0.9 years.

Employee Stock Purchase Plan

In December 2017, the Company adopted the 2017 Employee Stock Purchase Plan (the “2017 ESPP”), which initially reserved 1,000,000 shares of the Company’s common stock for employee purchases under terms and provisions established by the Board of Directors. Under the 2017 ESPP, employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of common stock on the first trading day of each offering period or on the exercise date. The 2017 ESPP provides for consecutive, overlapping 12-month offering periods. The offering periods are scheduled to start on the first trading day on or after May 31 or November 30 of each year, except for the first offering period which commenced on December 8, 2017, the first trading day after the effective date of the Company’s registration statement. Contributions under the 2017 ESPP are limited to a maximum of 15% of an employee’s eligible compensation.

The Company did not issue any new stock purchase rights under the 2017 ESPP during the three months ended March 31, 2018.

Stock-Based Compensation Expense

The Company’s results of operations include expenses relating to employee and non-employee stock option and restricted stock awards, as follows (in thousands):


	Three Months Ended March 31,
	2018		2017
Research and development	$	1,686	$	513
General and administrative		1,239		252

Total	$	2,925	$	765

As of March 31, 2018 and December 31, 2017, total unamortized stock-based compensation expense related to unvested employee stock-based awards that are expected to vest was $56.0 million and $17.2 million, respectively. As of March 31, 2018 and December 31, 2017, total unamortized stock-based compensation related to unvested non-employee stock-based awards that are expected to vest was $0.9 million and $0.5 million, respectively. The weighted-average periods over which such stock-based compensation expense will be recognized are approximately 3.6 years and 3.2 years, respectively.

The Company recorded stock-based compensation expense for options issued to non-employees of $0.3 million and $0.1 million for the three months ended March 31, 2018 and 2017, respectively.

Net Loss and Net Loss Per Share

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Net Loss and Net Loss Per Share

7.	Net Loss and Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share data):


	Three Months Ended March 31,
	2018			2017
Numerator:
Net loss	$	(23,678	)	$	(21,320	)
Denominator:
Weighted average common shares outstanding		89,560,576			9,017,425
Net loss per share, basic and diluted	$	(0.26	)	$	(2.36	)

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	March 31,
	2018		2017
Series A-1 convertible preferred stock		—		46,114,423
Series A-2 convertible preferred stock		—		4,361,527
Series B-1 convertible preferred stock		—		8,124,365
Options issued and outstanding and ESPP shares issuable and outstanding		9,243,112		5,877,804
Restricted shares subject to future vesting		1,575,204		3,515,405
Early exercised common stock subject to future vesting		276,047		510,419
Shares to be issued under Incro acquisition agreement		—		81,164

Total		11,094,363		68,585,107

Income Taxes

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

8.	Income Taxes

The Company has a history of losses, and expects to record a loss in 2018, and therefore has not recorded a provision for income taxes.

In December 2017, the U.S. government enacted the Tax Act (the “Act”). The Act reduces the corporate tax rate to 21 percent, effective January 1, 2018. In the consolidated financial statements in its annual report on Form 10-K, the Company calculated its best estimate of the impact of the Act in accordance with the Company’s understanding of the Act and guidance available at the time of filing. The tax rate decrease resulted in a reduction of $23.5 million in the Company’s deferred tax assets, and a corresponding decrease of the same amount in the valuation allowance, as substantially all of its deferred tax assets, net of deferred tax liabilities, are subject to a full valuation allowance. As of March 31, 2018, management has completed its assessment and does not expect to record any future changes resulting from the Act. Further, no changes to provisional amounts as of December 31, 2017 were recorded during the quarter ended March 31, 2018.

Subsequent Event

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

Subsequent Event

9.	Subsequent Event

On May 2, 2018, the Company entered into an amendment to the Headquarters Lease described in Note 5, (the “Headquarters Lease Amendment”) to relocate and expand its headquarters to 148,020 rentable square feet in a to-be-constructed building located in South San Francisco, California (the “New Premises”). The Headquarters Lease Amendment has a term of ten years from the commencement date, which is the later of February 1, 2019 or the date that the premises are ready for occupancy. The Company has an option to extend the lease term for a period of ten years by giving the landlord written notice of the election to exercise the option at least nine months, but not more than twelve months, prior to the expiration of the Headquarters Lease Amendment lease term.

Under the terms of the Headquarters Lease Amendment, the Company was required to increase the security deposit of $0.5 million described in Note 5 to $1.5 million. The Headquarters Lease Amendment provides for monthly base rent amounts escalating over the term of the lease. In addition, the Headquarters Lease Amendment provides a tenant improvement allowance (“TIA”) of up to $25.9 million, of which $4.4 million, if utilized, would be repaid to the landlord in the form of additional monthly rent with interest applied. Base rent will be approximately $0.4 million per month for the first six months following the commencement of the lease as to the replacement premises, and will increase to approximately $0.7 million per month in month seven and $0.8 million per month after the first year, with 3.5% annual increases thereafter to approximately $12.5 million in the final year of the term. The Company will also be required to pay the Company’s share of operating expenses for the New Premises.

Significant Accounting Policies (Policies)	3 Months Ended
Significant Accounting Policies (Policies)	Mar. 31, 2018
Accounting Policies [Abstract]
Organization and Description of Business	*Organization and Description of Business* Denali Therapeutics Inc. (“Denali” or the “Company”) is a biopharmaceutical company, incorporated in Delaware, that discovers and develops therapeutics to defeat neurodegenerative diseases. The Company is headquartered in South San Francisco, California.
Basis of Presentation	*Basis of Presentation* The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.
Initial Public Offering	*Initial Public Offering* On December 7, 2017, the Company’s Registration Statement on Form S-1 was declared effective by the SEC for Denali’s initial public offering (“IPO”) of common stock. In connection with the IPO, the Company sold an aggregate of 15,972,221 shares of common stock, including 2,083,333 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a price to the public of $18.00 per share. The aggregate net proceeds received by the Company from the offering, net of underwriting discounts and commissions and offering expenses, were $264.3 million. Upon the closing of the IPO, all then-outstanding shares of Company convertible preferred stock converted into 60,365,020 shares of common stock. The related carrying value of $378.6 million was reclassified to common stock and additional paid-in capital.
Principles of Consolidation	*Principles of Consolidation* These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. This subsidiary was dissolved in September 2016. All intercompany balances and transactions have been eliminated on consolidation. The Company assesses whether it is the primary beneficiary of any variable interest entity (“VIE”) in which it has a variable interest at the inception of the arrangement and at each reporting date. This assessment is based on the Company’s power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the Company’s obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.
Use of Estimates	*Use of Estimates* The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material to the condensed consolidated financial position and results of operations.
Concentration of Credit Risk and Other Risks and Uncertainties	*Concentration of Credit Risk and Other Risks and Uncertainties* Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. Substantially all of the Company’s cash and cash equivalents are deposited in accounts with financial institutions that management believes are of high credit quality. Such deposits have and will continue to exceed federally insured limits. The Company maintains its cash with accredited financial institutions and accordingly, such funds are subject to minimal credit risk. The Company has not experienced any losses on its cash deposits. The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and marketable securities and issuers of marketable securities to the extent recorded on the consolidated balance sheets. As of March 31, 2018 and December 31, 2017, the Company had no off-balance sheet concentrations of credit risk. The Company is subject to a number of risks similar to other early-stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain regulatory and marketing approvals for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, protection of proprietary technology, the ability to make milestone, royalty or other payments due under any license or collaboration agreements, and the need to secure and maintain adequate manufacturing arrangements with third parties. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.
Segments	*Segments* The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources.
Restricted Cash	*Restricted Cash* The Company’s restricted cash consists of the letter of credit for the Company’s headquarters building lease, and is included within other non-current assets on the accompanying condensed consolidated balance sheets.
Revenue Recognition	*Revenue Recognition* License and Collaboration Revenues The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of Topic 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606. The accounting treatment pursuant to Topic 606 is outlined below. The terms of licensing and collaboration agreements entered into typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Amounts received prior to satisfying the revenue recognition criteria are recorded as contract liabilities in the Company’s consolidated balance sheets. If the related performance obligation is expected to be satisfied within the next twelve months this will be classified in current liabilities. Amounts recognized as revenue prior to receipt are recorded as contract assets in the Company’s consolidated balance sheets. If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer. At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right. The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices. The relative selling price for each deliverable is estimated using objective evidence if it is available. If objective evidence is not available, the Company uses its best estimate of the selling price for the deliverable. Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the good or service promised to the customer. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception. Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.
Net Loss per Share	*Net Loss per Share* Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the net loss for each period presented.
Recent Accounting Pronouncements	*Recent Accounting Pronouncements* In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014–09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606), and further updated through ASU 2016-12 (“ASU 2016-12”), which amends the existing accounting standards for revenue recognition. ASU 2014–09 is based on principles that govern the recognition of revenue at an amount to which an entity expects to be entitled when products are transferred to customers. This guidance is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2017, for public entities. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. This standard was adopted on January 1, 2018 using a full retrospective application. There was no impact to the consolidated financial statements upon adoption of ASU 2014-09 as the Company had not recognized any revenue through December 31, 2017. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases (Topic 842), which supersedes the guidance in former ASC 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this standard on January 1, 2019. ASU 2016-02 is expected to impact the Company’s consolidated financial statements as the Company has certain operating lease arrangements for which the Company is the lessee. Management is currently evaluating the impact the adoption of ASU 2016-02 will have on the Company’s financial position and results of operations. Management expects that the adoption of this standard will result in the recognition of an asset for the right to use a leased facility on the Company’s balance sheet, as well as the recognition of a liability for the lease payments remaining on the lease. While the balance sheet presentation is expected to change, management does not expect a material change to the consolidated statement of operations. In November 2016, the FASB issued ASU No. 2016-18 (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash. The purpose of ASU 2016-18 is to clarify the guidance for and presentation of restricted cash in the statement of cash flows. The amendment requires beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include cash and cash equivalents as well as restricted cash and restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. Early adoption is permitted. This standard was adopted on January 1, 2018, the condensed consolidated statements of cash flows have been updated to reconcile cash, cash equivalents and restricted cash, and Note 3 includes a reconciliation of cash, cash equivalents and restricted cash for all periods presented. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective for annual and interim periods beginning after December 15, 2017 and application is prospective. Early adoption was permitted. This standard was adopted as of January 1, 2018 and will be applied prospectively to any award modified after the adoption date.

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value

Assets measured at fair value at each balance sheet date are as follows (in thousands):


	March 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	32,718	$	—	$	—	$	32,718
U.S. government treasuries		1,500		—		—		1,500
Corporate debt securities		—		2,000		—		2,000
Short-term:
U.S. government treasuries		141,048		—		—		141,048
U.S. government agency securities		—		115,433		—		115,433
Corporate debt securities		—		62,213		—		62,213
Commercial paper		—		10,707		—		10,707
Long-term:
U.S. government treasuries		110,845		—		—		110,845
U.S. government agency securities		—		48,992		—		48,992
Corporate debt securities		—		59,569		—		59,569

Total marketable securities		251,893		296,914		—		548,807

Total fair value measurements	$	286,111	$	298,914	$	—	$	585,025


	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	212,868	$	—	$	—	$	212,868
Short-term:
U.S. government treasuries		42,587		—		—		42,587
U.S. government agency securities		—		106,139		—		106,139
Corporate debt securities		—		39,125		—		39,125
Long-term:
U.S. government treasuries		39,848		—		—		39,848
U.S. government agency securities		—		19,911		—		19,911
Corporate debt securities		—		991		—		991

Total marketable securities		82,435		166,166		—		248,601

Total fair value measurements	$	295,303	$	166,166	$	—	$	461,469

Cash and Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2018

Cash and Cash Equivalents [Abstract]

Schedule of Restricted Cash and Cash Equivalents


	March 31, 2018		December 31, 2017		March 31, 2017
Cash and cash equivalents	$	44,001	$	218,375	$	36,751
Restricted cash included within prepaid expenses and other current assets		—		84		84
Restricted cash included within other non-current assets		451		451		451

Total cash, cash equivalents, and restricted cash	$	44,452	$	218,910	$	37,286

Summary of Available for Sale Securities


	March 31, 2018
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses			Aggregate Fair Value
Short-term marketable securities:
U.S. government treasuries	$	141,217	$	—	$	(169	)	$	141,048
U.S. government agency securities		115,687		—		(254	)		115,433
Corporate debt securities		62,371		—		(158	)		62,213
Commercial paper		10,707		—		—			10,707

Total short-term marketable securities		329,982		—		(581	)		329,401
Long-term marketable securities:
U.S. government treasuries		111,054		—		(209	)		110,845
U.S. government agency securities		49,188		—		(196	)		48,992
Corporate debt securities		59,869		—		(300	)		59,569

Total long-term marketable securities		220,111		—		(705	)		219,406

Total	$	550,093	$	—	$	(1,286	)	$	548,807


	December 31, 2017
	Amortized Cost		Unrealized Holding Gains		Unrealized Holding Losses			Aggregate Fair Value
Short-term marketable securities:
U.S. government treasuries	$	42,614	$	—	$	(27	)	$	42,587
U.S. government agency securities		106,368		—		(229	)		106,139
Corporate debt securities		39,197		—		(72	)		39,125

Total short-term marketable securities		188,179		—		(328	)		187,851
Long-term marketable securities:
U.S. government treasuries		39,868		—		(20	)		39,848
U.S. government agency securities		19,931		—		(20	)		19,911
Corporate debt securities		991		—		—			991

Total long-term marketable securities		60,790		—		(40	)		60,750

Total	$	248,969	$	—	$	(368	)	$	248,601

- Definition

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

+ References + Details

License and Collaboration Agreements (Tables)

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Changes in the Net Contract Liability Balance

Significant changes in the net contract liability balance during the period are as follows (in thousands):


	Contract liability
Balance at January 1, 2018	$	—
Increases due to cash received, excluding amounts recognized as revenue during the period		60,173
Decreases due to revenue recognized in the period for which cash has not yet been received		(220	)

Balance at March 31, 2018	$	59,953

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Summary of Company's Future Minimum Lease Commitments

As of March 31, 2018, the future minimum lease payments under the Headquarters Lease are as follows (in thousands):


Year Ended December 31:
2018 (nine months)	$	1,947
2019		2,664
2020		2,745
2021		2,829
2022		2,915
2023 and later		4,790

	$17,890

Stock-Based Awards (Tables)

3 Months Ended

Mar. 31, 2018

Summary of Stock Option Activity

The following table summarizes option award activity under the 2017 Plan and the 2015 Plan:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average remaining contractual life		Aggregate Intrinsic Value
						(years)		(in thousands)
Balance at December 31, 2017		6,689,479		$	4.08		8.37	$	77,317
Options granted		2,555,504			22.10
Options exercised		(81,735	)		2.67
Options forfeited		(65,970	)		3.48

Balance at March 31, 2018		9,097,278		$	9.16		8.71	$	95,790

Options vested and expected to vest at March 31, 2018		7,352,546		$	11.17		9.02	$	62,622

Options exercisable at March 31, 2018		1,468,625		$	3.32		8.26	$	24,040

Summary of Assumptions Used for Estimating the Fair Value of Stock Options Granted

The estimated fair value of stock options granted to employees were calculated using the Black-Scholes option-pricing model using the following assumptions:


	Three Months Ended March 31,
	2018	2017
Expected term (in years)	6.08	6.08
Volatility	86.0% - 87.5%	90.5% - 91.3%
Risk-free interest rate	2.6% - 2.7%	2.0% - 2.3%
Dividend yield	—	—

Summary of Stock-Based Compensation Expense

The Company’s results of operations include expenses relating to employee and non-employee stock option and restricted stock awards, as follows (in thousands):


	Three Months Ended March 31,
	2018		2017
Research and development	$	1,686	$	513
General and administrative		1,239		252

Total	$	2,925	$	765

Restricted Stock [Member]

Summary of Assumptions Used for Estimating the Fair Value of Stock Options Granted

The estimated fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option-pricing model with the following assumptions:


	Three Months Ended March 31,
	2018	2017
Expected term (in years)	7.39 - 8.11	8.25 - 9.45
Volatility	89.1% - 90.5%	95.5% - 98.0%
Risk-free interest rate	2.7% - 2.7%	2.3% - 2.4%
Dividend yield	—	—

Restricted Stock Activity

The following table summarizes restricted stock activity:


	Shares			Weighted- Average Fair Value at Date of Grant per Share
Unvested at December 31, 2017		2,293,788		$	0.18
Granted		—			—
Vested		(718,584	)		0.18
Forfeited		—			—

Unvested at March 31, 2018		1,575,204		$	0.18

Vested and expected to vest – March 31, 2018		1,575,204		$	0.18

Net Loss and Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share data):


	Three Months Ended March 31,
	2018			2017
Numerator:
Net loss	$	(23,678	)	$	(21,320	)
Denominator:
Weighted average common shares outstanding		89,560,576			9,017,425
Net loss per share, basic and diluted	$	(0.26	)	$	(2.36	)

Schedule of Dilutive Securities Not Included in Diluted Per Share Calculations

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	March 31,
	2018		2017
Series A-1 convertible preferred stock		—		46,114,423
Series A-2 convertible preferred stock		—		4,361,527
Series B-1 convertible preferred stock		—		8,124,365
Options issued and outstanding and ESPP shares issuable and outstanding		9,243,112		5,877,804
Restricted shares subject to future vesting		1,575,204		3,515,405
Early exercised common stock subject to future vesting		276,047		510,419
Shares to be issued under Incro acquisition agreement		—		81,164

Total		11,094,363		68,585,107

Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Millions		3 Months Ended
	Dec. 07, 2017 USD ($) $ / shares shares	Mar. 31, 2018 Segment
Significant Accounting Policies [Line Items]
Number of operating segments \| Segment		1
IPO [Member]
Significant Accounting Policies [Line Items]
Shares sold during initial public offering	15,972,221
Share price \| $ / shares	$ 18.00
Proceeds from issuance of common stock net of underwriting discounts and commissions and offering expenses \| $	$ 264.3
Convertible preferred stock converted into shares of common stock	60,365,020
Amount reclassified to common stock and additional paid-in capital \| $	$ 378.6
Over-Allotment Option [Member]
Significant Accounting Policies [Line Items]
Shares sold during initial public offering	2,083,333

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Transfers of assets between the fair value measurement levels, level 1 to level 2	$ 0	$ 0
Transfers of assets between the fair value measurement levels, level 2 to level 1	0	0
Transfers of assets between the fair value measurement levels, level 1 to level 3	0	0
Transfers of assets between the fair value measurement levels, level 3 to level 1	0	0
Transfers of assets between the fair value measurement levels, level 2 to level 3	0	0
Transfers of assets between the fair value measurement levels, level 3 to level 2	0	0
Transfers of liabilities between the fair value measurement levels, level 1 to level 2	0	0
Transfers of liabilities between the fair value measurement levels, level 2 to level 1	0	0
Transfers of liabilities between the fair value measurement levels, level 1 to level 3	0	0
Transfers of liabilities between the fair value measurement levels, level 3 to level 1	0	0
Transfers of liabilities between the fair value measurement levels, level 2 to level 3	0	0
Transfers of liabilities between the fair value measurement levels, level 3 to level 2	$ 0	$ 0

Cash and Marketable Securities - Schedule of Restricted Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Restricted Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 44,001	$ 218,375	$ 36,751
Restricted cash included within prepaid expenses and other current assets		84	84
Restricted cash included within other non-current assets	451	451	451
Total cash, cash equivalents, and restricted cash	$ 44,452	$ 218,910	$ 37,286	$ 40,388

Marketable Securities - Summary of Available for Sale Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 550,093	$ 248,969
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(1,286)	(368)
Aggregate Fair Value	548,807	248,601
Short-term Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	329,982	188,179
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(581)	(328)
Aggregate Fair Value	329,401	187,851
Short-term Marketable Securities [Member] \| U.S. Government Treasuries [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	141,217	42,614
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(169)	(27)
Aggregate Fair Value	141,048	42,587
Short-term Marketable Securities [Member] \| U.S. Government Agency Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	115,687	106,368
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(254)	(229)
Aggregate Fair Value	115,433	106,139
Short-term Marketable Securities [Member] \| Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	62,371	39,197
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(158)	(72)
Aggregate Fair Value	62,213	39,125
Short-term Marketable Securities [Member] \| Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	10,707
Unrealized Holding Gains	0
Aggregate Fair Value	10,707
Long-term Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	220,111	60,790
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(705)	(40)
Aggregate Fair Value	219,406	60,750
Long-term Marketable Securities [Member] \| U.S. Government Treasuries [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	111,054	39,868
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(209)	(20)
Aggregate Fair Value	110,845	39,848
Long-term Marketable Securities [Member] \| U.S. Government Agency Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	49,188	19,931
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(196)	(20)
Aggregate Fair Value	48,992	19,911
Long-term Marketable Securities [Member] \| Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	59,869	991
Unrealized Holding Gains	0	0
Unrealized Holding Losses	(300)
Aggregate Fair Value	$ 59,569	$ 991

License and Collaboration Agreements - Takeda - Additional Information (Detail)			3 Months Ended
	Feb. 23, 2018 USD ($) shares	Jan. 03, 2018 USD ($) Program $ / shares	Mar. 31, 2018 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Current contract liability balance			$ 8,434,000
Takeda Pharmaceutical Company Limited [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration agreement, target option period description			The initial research period continues for each target until the first biologic product directed to the relevant target is IND-ready or about five years after selection of the target, whichever is earlier.
Collaborative Arrangement [Member] \| Takeda Pharmaceutical Company Limited [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of programs to develop and commercialize \| Program		3
Upfront payment	$ 40,000,000
Preclinical milestone payment received	$ 5,000,000
Option fee		$ 5,000,000
Premium on sale of common stock			$ 15,600,000
Variable consideration relating to future milestones			26,000,000
Remaining preclinical milestones, cost and profit sharing income, and the development and commercial milestones			44,000,000
Revenue recognized			200,000
Receivables or net contract assets associated with arrangement			0
Collaborative Arrangement [Member] \| Takeda Pharmaceutical Company Limited [Member] \| United States [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of collaborations programs \| Program		1
Collaborative Arrangement [Member] \| Share Purchase Agreement [Member] \| Takeda Pharmaceutical Company Limited [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of common stock shares \| shares	4,214,559
Purchase price, shares		$ 110,000,000
Fair market value of common stock		$ 94,400,000
Closing stock price \| $ / shares		$ 22.40
Premium on sale of common stock		$ 15,600,000
Collaborative Arrangement [Member] \| Maximum [Member] \| Takeda Pharmaceutical Company Limited [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Preclinical milestone payments per program	$ 25,000,000
Total aggregate payments due upon achievement of certain preclinical milestone events.		75,000,000
Aggregated option exercise fee		15,000,000
Total aggregate payments due upon achievement of certain clinical and regulatory milestone events		707,500,000
Milestone payments per biologic product upon achievement of a certain sales-based milestone		75,000,000
Milestone payments upon achievement of biologic product from each program		$ 225,000,000
Relates to Research Services [Member] \| Takeda Pharmaceutical Company Limited [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Current contract liability balance			$ 60,000,000

License and Collaboration Agreements - Summary of Significant Changes in the Net Contract Liability Balance (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
Change in Contract with Customer, Liability [Abstract]
Balance at January 1, 2018	$ 0
Increases due to cash received, excluding amounts recognized as revenue during the period	60,173
Decreases due to revenue recognized in the period for which cash has not yet been received	(220)
Balance at March 31, 2018	$ 59,953

License and Collaboration Agreements - F-star - Additional Information (Detail)		3 Months Ended
	Aug. 24, 2016 USD ($) Targets	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Research and development expense		$ 20,819,000	$ 18,470,000
Upfront option fee recognized within other non-current assets recorded at cost		2,265,000		$ 1,441,000
Collaborative Arrangement [Member] \| F-star [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of Fcab targets \| Targets	3
Number of Fab targets \| Targets	8
Upfront fee paid	$ 5,500,000
Maximum aggregate Fcab selection fee	$ 15,000,000
Maximum development plan period for research costs	24 months
Research and development expense		$ 300,000	300,000
Notice period for terminating the agreement	90 days
Upfront option fee	$ 500,000
Royalty payment obligations, description		The Company's royalty payment obligations will expire on a country-by-country and licensed product-by-licensed product basis upon the later of (a) the expiration of the last valid claim of a licensed patent covering such licensed product in such country, (b) the expiration of regulatory exclusivity for such licensed product in such country and (c) the twelfth anniversary of the first commercial sale of such licensed product in such country.
Upfront option fee recognized within other non-current assets recorded at cost		$ 500,000
Impairment charge		$ 0	$ 0
Collaborative Arrangement [Member] \| No Exercise of Buy-out Option [Member] \| F-star [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of maximum reduction as credit for third-party royalty and milestone payments	50.00%
Collaborative Arrangement [Member] \| Maximum [Member] \| F-star [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Research and development expense	$ 2,100,000
Collaborative Arrangement [Member] \| Maximum [Member] \| Exercise of Buy-out Option [Member] \| F-star [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Initial option exercise payments	50,000,000
Contingent payments upon the achievement of milestones	447,000,000
Collaborative Arrangement [Member] \| Maximum [Member] \| No Exercise of Buy-out Option [Member] \| F-star [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Milestone payments upon achievement of specified clinical and regulatory milestones	362,500,000
Additional sales-based payment on achievement of milestone	650,000,000
Collaborative Arrangement [Member] \| Minimum [Member] \| Exercise of Buy-out Option [Member] \| F-star [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Initial option exercise payments	$ 18,000,000

License and Collaboration Agreements - Genentech - Additional Information (Detail) - Genentech Inc [Member] - USD ($)		3 Months Ended	12 Months Ended
	Jun. 17, 2016	Mar. 31, 2018	Dec. 31, 2016
Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Milestone payments upon achievement of specified clinical and regulatory milestones	$ 315,000,000
License Agreement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of maximum reduction as credit for third-party royalty and milestone payments	50.00%
Royalty payment obligations, description		The Company's royalty payment obligations will expire on a country-by-country and licensed product-by-licensed product basis upon the later of (a) ten years after the first commercial sale of such licensed product in such country and (b) the expiration of the last valid claim of a licensed patent covering such licensed product in such country.
License Agreement [Member] \| Research and Development [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront fee paid			$ 8,500,000
Technology transfer fee			$ 1,500,000

Commitments and Contingencies - Additional Information (Detail)		1 Months Ended	3 Months Ended
	Nov. 30, 2016 USD ($)	Nov. 30, 2016 USD ($)	Mar. 31, 2018 USD ($) ft²	Mar. 31, 2017 USD ($)	Aug. 01, 2016 USD ($)
Loss Contingencies [Line Items]
Rent expense			$ 400,000	$ 600,000
Headquarters Lease [Member]
Loss Contingencies [Line Items]
Area under lease \| ft²			38,109
Lease period			8 years
Increase in base rent		$ 400,000
Operating lease description			In September 2015, the Company entered into a non-cancelable operating lease for its corporate headquarters comprising 38,109 of rentable square feet in a building in South San Francisco (“Headquarters Lease”). The Headquarters Lease commenced on August 1, 2016 with a lease term of eight years. The Company has an option to extend the lease term for a period of five years by giving the landlord written notice of the election to exercise the option at least nine months, but not more than twelve months, prior to the original expiration of the lease term.
Security deposit			$ 500,000
Landlord Funded Tenant Improvements [Member] \| Headquarters Lease [Member]
Loss Contingencies [Line Items]
TIA repayable in rent	$ 1,900,000
DMSA [Member]
Loss Contingencies [Line Items]
Costs incurred			100,000
Payments for development and manufacturing services			100,000
Non-refundable purchase commitments			4,600,000
DMSA First Amendment [Member]
Loss Contingencies [Line Items]
Purchase order executed			800,000
DMSA Second Amendment [Member]
Loss Contingencies [Line Items]
Purchase order executed			$ 11,800,000
Maximum [Member] \| Landlord Funded Tenant Improvements [Member] \| Headquarters Lease [Member]
Loss Contingencies [Line Items]
Tenant improvements					$ 7,400,000

Commitments and Contingencies - Summary of Company's Future Minimum Lease Commitments (Detail) - Headquarters Lease [Member] $ in Thousands	Mar. 31, 2018 USD ($)
Loss Contingencies [Line Items]
2018 (nine months)	$ 1,947
2019	2,664
2020	2,745
2021	2,829
2022	2,915
2023 and later	4,790
Total	$ 17,890

Stock-Based Awards - Additional Information (Detail) - USD ($)	1 Months Ended				3 Months Ended		12 Months Ended
	Dec. 31, 2017	Nov. 30, 2015	Aug. 31, 2015	May 31, 2015	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 08, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price					$ 2.67
Estimated fair value of option					$ 16.36	$ 3.98
Aggregate intrinsic value of options exercised					$ 1,300,000	$ 1,800,000
Weighted average grant date fair value of options vested					$ 2.90	$ 1.06
Performance and market contingent stock options granted					2,555,504
Expected weighted average period					3 years 7 months 6 days		3 years 2 months 12 days
Share based compensation cost recognized					$ 2,925,000	$ 765,000
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation cost recognized					1,239,000	252,000
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation cost recognized					$ 1,686,000	513,000
Performance and Market Contingent Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price					$ 0.68
Performance and market contingent stock options granted		125,000	1,619,738
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, vested					718,584
Unamortized stock- based compensation expense related to unvested stock options					$ 300,000
Expected weighted average period					10 months 24 days
2017 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance								1,000,000
Common stock purchase discounted rate for employees (in percentage)							85.00%
Maximum employee contribution to ESPP, percent of base compensation	15.00%						15.00%
Options Issued and Outstanding and ESPP Shares Issuable and Outstanding [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized stock- based compensation expense related to unvested stock options	$ 17,200,000				$ 56,000,000		$ 17,200,000
Non-Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized stock- based compensation expense related to unvested stock options	$ 500,000				900,000		$ 500,000
Share based compensation cost recognized					300,000	100,000
Early Exercised Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reclassification of liability to stockholders' equity (deficit)					$ 300,000	$ 31,874,000,000
Shares, vested					200,000	500,000
2017 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance								6,379,238
Number of shares available for grant					3,522,964
2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance				8,325,000
Number of shares available for grant					0
2015 Stock Incentive Plan [Member] \| All Shares Granted At $ 0.68 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price				$ 0.68
Estimated fair value of option				$ 1.20
Shares Transferred As Available For Issuance From 2015 Plan to 2017 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant					169,238
Maximum [Member] \| Performance and Market Contingent Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation cost not recognized					$ 6,200,000
Maximum [Member] \| Performance and Market Contingent Stock Options [Member] \| General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation cost not recognized					5,800,000
Maximum [Member] \| Performance and Market Contingent Stock Options [Member] \| Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation cost not recognized					$ 400,000
Maximum [Member] \| 2017 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award expiration period	10 years
Maximum [Member] \| 2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award expiration period				10 years
Minimum [Member] \| 2017 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of option price of estimated fair value on grant date	100.00%
Minimum [Member] \| 2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of option price of estimated fair value on grant date				100.00%

Stock-Based Awards - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of options, beginning balance	6,689,479
Number of options, granted	2,555,504
Number of options, exercised	(81,735)
Number of options, forfeited	(65,970)
Number of options, ending balance	9,097,278	6,689,479
Number of options, vested and expected to vest	7,352,546
Number of options, exercisable	1,468,625
Weighted average exercise price, beginning balance	$ 4.08
Weighted average exercise price, granted	22.10
Weighted average exercise price, exercised	2.67
Weighted average exercise price, forfeited	3.48
Weighted average exercise price, ending balance	9.16	$ 4.08
Weighted average exercise price, vested and expected to vest	11.17
Weighted average exercise price, exercisable	$ 3.32
Weighted average remaining contractual life (years)	8 years 8 months 16 days	8 years 4 months 13 days
Weighted average remaining contractual life (years), vested and expected to vest	9 years 7 days
Weighted average remaining contractual life (years), exercisable	8 years 3 months 4 days
Aggregate intrinsic value, beginning balance	$ 77,317
Aggregate intrinsic value, ending balance	95,790	$ 77,317
Aggregate intrinsic value, vested and expected to vest	62,622
Aggregate intrinsic value, exercisable	$ 24,040

Stock-Based Awards - Summary of Assumptions Used for Estimating the Fair Value of Stock Options Granted (Detail)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected term (in years)	6 years 29 days	6 years 29 days
Volatility,minimum	86.00%	90.50%
Volatility,maximum	87.50%	91.30%
Risk-free interest rate,minimum	2.60%	2.00%
Risk-free interest rate,maximum	2.70%	2.30%
Dividend yield	0.00%	0.00%

Stock-Based Awards - Summary of Non Employees Assumptions Used for Estimating the Fair Value of Stock Options Granted (Detail)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 29 days	6 years 29 days
Volatility,minimum	86.00%	90.50%
Volatility,maximum	87.50%	91.30%
Risk-free interest rate,minimum	2.60%	2.00%
Risk-free interest rate,maximum	2.70%	2.30%
Dividend yield	0.00%	0.00%
Non- Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility,minimum	89.10%	95.50%
Volatility,maximum	90.50%	98.00%
Risk-free interest rate,minimum	2.70%	2.30%
Risk-free interest rate,maximum	2.70%	2.40%
Dividend yield	0.00%	0.00%
Minimum [Member] \| Non- Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	7 years 4 months 20 days	8 years 2 months 30 days
Dividend yield	0.00%	0.00%
Maximum [Member] \| Non- Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	8 years 1 month 9 days	9 years 5 months 12 days
Dividend yield	0.00%	0.00%

Stock-Based Awards - Summary of Restricted Stock Activity (Detail) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Unvested, beginning balance \| shares	2,293,788
Shares, Granted \| shares	0
Shares, Vested \| shares	(718,584)
Shares, Forfeited \| shares	0
Shares, Unvested, ending balance \| shares	1,575,204
Shares, Vested and expected to vest \| shares	1,575,204
Weighted-Average Fair Value at Date of Grant per Share, Unvested, beginning balance \| $ / shares	$ 0.18
Weighted-Average Fair Value at Date of Grant per Share, Granted \| $ / shares	0
Weighted-Average Fair Value at Date of Grant per Share, Vested \| $ / shares	0.18
Weighted-Average Fair Value at Date of Grant per Share, Forfeited \| $ / shares	0
Weighted-Average Fair Value at Date of Grant per Share, Unvested, ending balance \| $ / shares	0.18
Weighted-Average Fair Value at Date of Grant per Share, Vested and expected to vest \| $ / shares	$ 0.18

Stock-Based Awards - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	$ 2,925	$ 765
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	1,686	513
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total	$ 1,239	$ 252

Net Loss and Net Loss Per Share - Summary of Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net loss	$ (23,678)	$ (21,320)
Denominator:
Weighted average common shares outstanding	89,560,576	9,017,425
Net loss per share, basic and diluted	$ (0.26)	$ (2.36)

Net Loss and Net Loss Per Share - Schedule of Dilutive Securities Not Included in Diluted Per Share Calculations (Detail) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total	11,094,363	68,585,107
Series A-1 Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total		46,114,423
Series A- 2 Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total		4,361,527
Series B-1 Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total		8,124,365
Options Issued and Outstanding and ESPP Shares Issuable and Outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total	9,243,112	5,877,804
Restricted Shares Subject to Future Vesting [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total	1,575,204	3,515,405
Early Exercised Common Stock Subject to Future Vesting [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total	276,047	510,419
Shares to Be Issued Under Incro Acquisition Agreement [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, Total		81,164

Income Taxes - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Income Tax Disclosure [Abstract]
U.S. government enacted the tax rate	21.00%
Deferred tax assets	$ 23.5

Subsequent Event - Additional Information (Detail) - Headquarters Lease Amendment [Member]	May 02, 2018 USD ($) ft²	Mar. 31, 2018 USD ($)
Subsequent Event [Line Items]
Security		$ 500,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Area under lease \| ft²	148,020
Extended lease term	10 years
Security	$ 1,500,000
Base rent expense months 1-6	400,000
Base rent expense months 7-12	700,000
Base rent expense year two	$ 800,000
Annual increase in rental percentage	3.50%
Annual rent, final year	$ 12,500,000
Subsequent Event [Member] \| Landlord Funded Tenant Improvements [Member]
Subsequent Event [Line Items]
TIA repayable in rent	4,400,000
Subsequent Event [Member] \| Maximum [Member] \| Landlord Funded Tenant Improvements [Member]
Subsequent Event [Line Items]
Tenant improvements	$ 25,900,000

Fair Value Measurements - Assets Measured at Fair Value (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 548,807	$ 248,601
Total fair value measurements	585,025	461,469
U.S. Government Treasuries [Member] \| Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	1,500
U.S. Government Treasuries [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	141,048	42,587
U.S. Government Treasuries [Member] \| Long-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	110,845	39,848
U.S. Government Agency Securities [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	115,433	106,139
U.S. Government Agency Securities [Member] \| Long-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	48,992	19,911
Corporate Debt Securities [Member] \| Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	2,000
Corporate Debt Securities [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	62,213	39,125
Corporate Debt Securities [Member] \| Long-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	59,569	991
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities		212,868
Money Market Funds [Member] \| Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	32,718
Commercial Paper [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	10,707
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	251,893	82,435
Total fair value measurements	286,111	295,303
Level 1 [Member] \| U.S. Government Treasuries [Member] \| Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	1,500
Level 1 [Member] \| U.S. Government Treasuries [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	141,048	42,587
Level 1 [Member] \| U.S. Government Treasuries [Member] \| Long-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	110,845	39,848
Level 1 [Member] \| Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities		212,868
Level 1 [Member] \| Money Market Funds [Member] \| Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	32,718
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	296,914	166,166
Total fair value measurements	298,914	166,166
Level 2 [Member] \| U.S. Government Agency Securities [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	115,433	106,139
Level 2 [Member] \| U.S. Government Agency Securities [Member] \| Long-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	48,992	19,911
Level 2 [Member] \| Corporate Debt Securities [Member] \| Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	2,000
Level 2 [Member] \| Corporate Debt Securities [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	62,213	39,125
Level 2 [Member] \| Corporate Debt Securities [Member] \| Long-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	59,569	$ 991
Level 2 [Member] \| Commercial Paper [Member] \| Short-term [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 10,707