0001564590-19-040063 | 10-Q | XBRL Viewer | Apellis Pharmaceuticals INC

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Nov. 01, 2019
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Registrant Name	Apellis Pharmaceuticals, Inc.
Entity Central Index Key	0001492422
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	001-38276
Entity Tax Identification Number	27-1537290
Entity Address, Address Line One	6400 Westwind Way
Entity Address, Address Line Two	Suite A
Entity Address, City or Town	Crestwood
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	40014
City Area Code	(502)
Local Phone Number	241-4114
Entity Common Stock, Shares Outstanding		63,888,238
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false
Security 12b Title	Common Stock
Trading Symbol	APLS
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 433,994,644	$ 176,267,666
Prepaid assets	14,742,698	24,333,851
Other current assets	2,457,530	1,837,704
Total current assets	451,194,872	202,439,221
Non-current Assets:
Right-of-use assets	13,332,783
Property and equipment, net	1,592,787	977,918
Other assets	236,515	116,420
Total assets	466,356,957	203,533,559
Current liabilities:
Accounts payable	11,836,609	10,254,938
Accrued expenses	30,431,607	5,103,002
Current portion of long-term debt		1,666,667
Current portion of right of use liabilities	2,304,147
Total current liabilities	44,572,363	17,024,607
Long-term liabilities:
Convertible senior notes	140,614,523
Development derivative liability	130,103,000
Term loan facility		18,722,321
Promissory note		6,655,193
Right-of-use liabilities	11,255,257
Other liabilities	250,000	158,783
Total liabilities	326,795,143	42,560,904
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, and zero shares issued and outstanding at December 31, 2018 and September 30, 2019	0	0
Common stock, $0.0001 par value; 200,000,000 shares authorized at December 31, 2018 and September 30, 2019 and 56,279,307 shares issued and outstanding at December 31, 2018 and 63,872,762 shares issued and outstanding at September 30, 2019	6,387	5,628
Additional paid in capital	608,015,713	437,855,681
Accumulated other comprehensive loss	(205,249)	(122,807)
Accumulated deficit	(468,255,037)	(276,765,847)
Total stockholders' equity	139,561,814	160,972,655
Total liabilities and stockholders' equity	$ 466,356,957	$ 203,533,559

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, issued	63,872,762	56,279,307
Common stock, outstanding	63,872,762	56,279,307

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating expenses:
Research and development	$ 51,319,017	$ 29,539,456	$ 142,497,342	$ 74,479,965
General and administrative	18,628,945	6,265,125	39,577,627	16,248,203
Operating loss	(69,947,962)	(35,804,581)	(182,074,969)	(90,728,168)
Loss on extinguishment of debt	(293,083)		(1,501,215)
Loss from remeasurement of development derivative liability	(263,000)		(10,103,000)
Interest income	1,341,811	858,425	3,630,314	1,468,957
Interest expense	(601,377)	(577,534)	(1,354,379)	(1,270,743)
Other (expense)/income, net	(61,048)	(22,234)	(85,941)	(86,575)
Net loss	(69,824,659)	(35,545,924)	(191,489,190)	(90,616,529)
Other comprehensive gain:
Foreign currency gain/ (loss)	(83,272)	(86,249)	(82,442)	(86,249)
Total other comprehensive gain/ (loss)	(83,272)	(86,249)	(82,442)	(86,249)
Comprehensive loss, net of tax	$ (69,907,931)	$ (35,632,173)	$ (191,571,632)	$ (90,702,778)
Net loss per common share, basic and diluted	$ (1.10)	$ (0.64)	$ (2.79)	$ (1.69)
Weighted-average number of common shares used in net loss per common share, basic and diluted	63,752,719	56,201,299	68,737,045	53,770,400

Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited) - USD ($)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2017	$ 148,942,860	$ 5,033	$ 298,201,480		$ (149,263,653)
Beginning balance, Shares at Dec. 31, 2017		50,334,152
Issuance of common stock upon exercise of stock options	225,361	$ 9	225,352
Issuance of common stock upon exercise of stock options, shares		94,868
Share-based compensation expense	1,610,188		1,610,188
Net loss	(21,736,304)				(21,736,304)
Ending balance at Mar. 31, 2018	129,042,105	$ 5,042	300,037,020		(170,999,957)
Ending balance, Shares at Mar. 31, 2018		50,429,020
Beginning balance at Dec. 31, 2017	148,942,860	$ 5,033	298,201,480		(149,263,653)
Beginning balance, Shares at Dec. 31, 2017		50,334,152
Net loss	(90,616,529)
Foreign currency gain/ (loss)	(86,249)
Ending balance at Sep. 30, 2018	195,954,850	$ 5,624	435,915,657	$ (86,249)	(239,880,182)
Ending balance, Shares at Sep. 30, 2018		56,242,571
Beginning balance at Mar. 31, 2018	129,042,105	$ 5,042	300,037,020		(170,999,957)
Beginning balance, Shares at Mar. 31, 2018		50,429,020
Issuance of common stock in follow-on offering, net of offering costs	131,325,027	$ 550	131,324,477
Issuance of common stock in follow-on offering, shares		5,500,000
Issuance of common stock upon exercise of stock options	275,749	$ 23	275,726
Issuance of common stock upon exercise of stock options, shares		225,418
Share-based compensation expense	2,243,527		2,243,527
Net loss	(33,334,301)				(33,334,301)
Ending balance at Jun. 30, 2018	229,552,107	$ 5,615	433,880,750		(204,334,258)
Ending balance, Shares at Jun. 30, 2018		56,154,438
Deferred issuance costs	(130,997)		(130,997)
Issuance of common stock upon exercise of stock options	114,989	$ 9	114,980
Issuance of common stock upon exercise of stock options, shares		88,133
Share-based compensation expense	2,050,924		2,050,924
Net loss	(35,545,924)				(35,545,924)
Foreign currency gain/ (loss)	(86,249)			(86,249)
Ending balance at Sep. 30, 2018	195,954,850	$ 5,624	435,915,657	(86,249)	(239,880,182)
Ending balance, Shares at Sep. 30, 2018		56,242,571
Beginning balance at Dec. 31, 2018	160,972,655	$ 5,628	437,855,681	(122,807)	(276,765,847)
Beginning balance, Shares at Dec. 31, 2018		56,279,307
Issuance of common stock in follow-on offering, net of offering costs	109,603,849	$ 690	109,603,159
Issuance of common stock in follow-on offering, shares		6,900,000
Issuance of common stock upon exercise of stock options	192,005	$ 4	192,001
Issuance of common stock upon exercise of stock options, shares		39,169
Share-based compensation expense	4,558,588		4,558,588
Net loss	(50,574,367)				(50,574,367)
Foreign currency gain/ (loss)	2,162			2,162
Ending balance at Mar. 31, 2019	224,754,892	$ 6,322	552,209,429	(120,645)	(327,340,214)
Ending balance, Shares at Mar. 31, 2019		63,218,476
Beginning balance at Dec. 31, 2018	160,972,655	$ 5,628	437,855,681	(122,807)	(276,765,847)
Beginning balance, Shares at Dec. 31, 2018		56,279,307
Net loss	(191,489,190)
Foreign currency gain/ (loss)	(82,442)
Ending balance at Sep. 30, 2019	139,561,814	$ 6,387	608,015,713	(205,249)	(468,255,037)
Ending balance, Shares at Sep. 30, 2019		63,872,762
Beginning balance at Mar. 31, 2019	224,754,892	$ 6,322	552,209,429	(120,645)	(327,340,214)
Beginning balance, Shares at Mar. 31, 2019		63,218,476
Deferred issuance costs	(22,741)		(22,741)
Issuance of common stock upon exercise of stock options	1,262,162	$ 45	1,262,117
Issuance of common stock upon exercise of stock options, shares		453,954
Share-based compensation expense	4,183,221		4,183,221
Net loss	(71,090,164)				(71,090,164)
Foreign currency gain/ (loss)	(1,332)			(1,332)
Ending balance at Jun. 30, 2019	159,086,038	$ 6,367	557,632,026	(121,977)	(398,430,378)
Ending balance, Shares at Jun. 30, 2019		63,672,430
Issuance of common stock upon exercise of stock options	954,392	$ 20	954,372
Issuance of common stock upon exercise of stock options, shares		200,332
Share-based compensation expense	5,295,152		5,295,152
Recognition of debt discount on convertible notes	72,514,163		72,514,163
Purchase of capped call transactions and associated costs	(28,380,000)		(28,380,000)
Net loss	(69,824,659)				(69,824,659)
Foreign currency gain/ (loss)	(83,272)			(83,272)
Ending balance at Sep. 30, 2019	$ 139,561,814	$ 6,387	$ 608,015,713	$ (205,249)	$ (468,255,037)
Ending balance, Shares at Sep. 30, 2019		63,872,762

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating Activities
Net loss	$ (191,489,190)	$ (90,616,529)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	14,036,961	5,904,639
Loss on early extinguishment of debt	1,501,215
Loss from remeasurement of development derivative liability	10,103,000
Amortization of right-of-use assets	226,621
Depreciation expense	152,970
Amortization of debt discounts	51,725	53,047
Amortization of term loan facility discounts	104,172	463,088
Amortization of deferred financing costs	233,686
Changes in operating assets and liabilities:
Prepaid assets	9,590,758	(11,796,362)
Other current assets	(884,275)	(169,704)
Other assets	(120,018)	(96,829)
Accounts payable	1,792,617	1,794,844
Accrued expenses	25,544,779	7,695,524
Other liabilities	91,217	5,708
Net cash used in operating activities	(129,063,762)	(86,762,574)
Investing Activities
Purchase of property and equipment	(1,537,536)
Net cash used in investing activities	(1,537,536)
Financing Activities
Proceeds from issuance of common stock, net of issuance costs	110,239,260	131,194,030
Deferred issuance costs	(609,971)	(22,426)
Proceeds from development derivative liability	120,000,000
Payments for capped call transactions and associated costs	(28,380,000)
Proceeds from issuance of convertible notes, net of issuance costs	213,400,000
Proceeds from exercise of stock options	2,383,877	616,099
Repayment of promissory note	(7,000,000)
Repayment of term loan facility	(21,701,292)
Net cash provided by financing activities	388,331,874	131,787,703
Effect of exchange rate changes on cash and cash equivalents	(3,598)	(27,840)
Net increase in cash and cash equivalents	257,726,978	44,997,289
Cash and cash equivalents at beginning of period	176,267,666	175,643,529
Cash and cash equivalents at end of period	433,994,644	220,640,818
Supplemental Disclosure of Financing Activities
Cash paid for Interest	$ 958,994	$ 1,338,694

Nature of Organization and Operations

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Organization and Operations

1. Nature of Organization and Operations

Apellis Pharmaceuticals, Inc. (the “Company”) is a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds to treat disease through the inhibition of the complement system, which is an integral component of the immune system, at the level of C3, the central protein in the complement cascade.

The Company was incorporated in September 2009 under the laws of the State of Delaware and has its principal office in Crestwood, Kentucky. The Company plans to relocate its principal office to Waltham, Massachusetts, effective as of January 1, 2020.

The Company’s operations since inception have been limited to organizing and staffing the Company, acquiring rights to product candidates, business planning, raising capital and developing its product candidates.

The Company is subject to risks common in the biotechnology industry including, but not limited to, raising additional capital, development by its competitors of new technological innovations, its ability to successfully complete preclinical and clinical development of product candidates and receive timely regulatory approval of products, market acceptance of the Company’s products, protection of proprietary technology, healthcare cost containment initiatives, and compliance with governmental regulations, including those of the U.S. Food and Drug Administration (“FDA”).

Convertible Notes Offering

On September 16, 2019, the Company completed a private offering of $220,000,000 aggregate principal amount of 3.5% convertible senior notes due 2026 (the “Convertible Notes”). The Company also granted the initial purchasers an option to purchase within a 13-day period from, and including, September 16, 2019 up to an additional $33,000,000 aggregate principal amount of the Convertible Notes, solely to cover over-allotments, which was not exercised and expired as of September 30, 2019.

The net proceeds from the sale of the Convertible Notes were approximately $212,895,000 after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by the Company. The Company used $28,380,000 of the net proceeds from the offering to pay the cost of the capped call transactions described below.

On September 16, 2019, the Company entered into an indenture (the “Indenture”) with respect to the Convertible Notes with U.S. Bank National Association, as trustee (the “Trustee”). The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 3.5% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2020. The Convertible Notes will mature on September 15, 2026, unless earlier converted, redeemed or repurchased in accordance with their terms. See Note 5 – Long-term Debt for additional information.

Capped Call Transactions

Development Derivative Liability

On February 28, 2019, the Company entered into a development funding agreement with SFJ Pharmaceuticals Group (“SFJ”) under which SFJ agreed to provide funding to the Company to support the development of APL-2 for the treatment of patients with paroxysmal nocturnal hemoglobinuria (“PNH”) (“SFJ Agreement”). Pursuant to the agreement, SFJ paid the Company $60,000,000 following the signing of the agreement, and agreed to pay the Company up to an additional $60,000,000 in the aggregate in three equal installments upon the achievement of specified development milestones with respect to the Company’s Phase 3 program for APL-2 in PNH and subject to the Company having cash resources at the time sufficient to fund at least ten months of the Company’s operations. In addition, upon the mutual agreement of the Company and SFJ, at any time after the earlier of the date that

the Company has reviewed the primary endpoint data from its PEGASUS Phase 3 trial of APL-2 in patients with PNH and March 31, 2020, SFJ may fund an additional $50,000,000 of the Company’s development costs (the “Additional SFJ Funding”).

On June 7, 2019, the Company and SFJ amended the development funding agreement (the “SFJ Amendment”). Under the SFJ Amendment, SFJ agreed to make an additional $20,000,000 funding payment to the Company to support the development of APL-2 for the treatment of patients with PNH. This additional $20,000,000 payment is in addition to and not part of the Additional SFJ Funding.

On June 27, 2019, the Company received $40,000,000 from SFJ, consisting of $20,000,000 as the first installment of the additional $60,000,000 upon the achievement of a milestone and the $20,000,000 payable under the SFJ Amendment.

On September 23, 2019, the Company received $20,000,000 from SFJ as the second installment of the additional $60,000,000 upon the achievement of a milestone.

The Company expects that the remaining development milestone under the SFJ Agreement will be achieved and the remaining $20,000,000 of the additional $60,000,000 will be paid during the first quarter of 2020.

Follow-on Public Offerings

On March 11, 2019, the Company issued and sold 6,900,000 shares of its common stock at a price per share of $17.00 in a follow-on public offering (“2019 follow-on offering”). The Company received net proceeds of $109,603,159 after deducting underwriting discounts and commissions of $7,000,000 and offering costs of $680,891.

On April 23, 2018, the Company issued and sold 5,500,000 shares of its common stock at a price per share of $25.50 in a follow-on public offering (“2018 follow-on offering”). The Company received net proceeds of $131,324,477 after deducting underwriting discounts and commissions of $8,415,000 and offering costs of $509,973.

Liquidity and Financial Condition

The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of October 30, 2019, the date of issuance of these unaudited condensed consolidated financial statements, the Company believes that its cash and cash equivalents as of September 30, 2019 of $433,994,644 will be sufficient to fund its operations for at least the next twelve months from the date of issuance of the unaudited interim consolidated financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

The Company is subject to risks common to other life science companies in the development stage including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing, and compliance with FDA and other government regulations. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve profitability. Management’s plans in order to meet its short-term and longer-term operating cash flow requirements include obtaining additional funding.

There are uncertainties associated with the Company’s ability to (1) obtain additional debt or equity financing (2) enter into collaborative agreements with strategic partners, and (3) succeed in its future operations. If the Company is not able to obtain the required capital to fund its operations from any of these, or is not able to obtain such funding on terms that are favorable to the Company, it could be forced to delay, reduce or eliminate its research and development programs or future commercialization efforts and its business could be materially harmed.

Basis of Presentation

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Apellis Australia Pty Ltd, Apellis Ireland Ltd and Apellis Switzerland GmbH. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”), for interim reporting. As permitted under those rules, certain footnotes or other

financial information that are normally required by U.S. GAAP have been condensed or omitted and, accordingly, the balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of the Company’s financial information. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2019.

Fair Value of Financial Instruments

The Company is required to disclose information on the fair value of financial instruments and inputs that enable an assessment of the fair value. The three levels of the fair value hierarchy prioritize valuation inputs based upon the observable nature of those inputs as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly;

Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The Company’s financial instruments, in addition to those presented in Note 5, Long-Term Debt, and Note 7, Fair Value Measurements, include cash and cash equivalents, the Australian research and development credit, accounts payable and accrued liabilities. Management believes that the carrying amounts of cash and cash equivalents, the Australian research and development credit, accounts payable and accrued expenses approximate the fair value due to the short-term nature of those instruments.

Cash and Cash Equivalents

Cash and cash equivalents are defined as cash in banks and investment instruments having maturities of three months or less from their acquisition date. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value.

Foreign Currency

The financial position and results of operations of the Company's Australian and Swiss subsidiaries is measured using the foreign subsidiary's local currency. Revenues and expenses of the subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period from January 1, through September 30, 2019. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity.

In 2018, due to the growth in volume of research contracts and intercompany loans exclusively denominated in local currency, effective August 1, 2018, the functional currency of the Company’s Australian subsidiary was changed from the U.S. dollar to the Australian dollar. The impact of the change in functional currency was not material to the audited consolidated financial statements for the year ended December 31, 2018.

Reclassifications

Certain prior year amounts have been reclassified to conform to the 2019 presentation.

Accrued Expenses

9 Months Ended

Sep. 30, 2019

Text Block [Abstract]

Accrued Expenses

3. Accrued Expenses

Accrued expenses are as follows:

	December 31,		September 30,
	2018		2019
Accrued research and development	$	3,481,570	$	18,344,099
Accrued payroll liabilities		269,046		7,586,198
Other		1,352,386		4,501,310
Total	$	5,103,002	$	30,431,607

Development Derivative Liability

9 Months Ended

Sep. 30, 2019

Research And Development [Abstract]

Development Derivative Liability

4. Development Derivative Liability

On February 28, 2019, the Company entered into the SFJ Agreement under which SFJ agreed to provide funding to the Company to support the development of APL-2 for the treatment of patients with PNH. Pursuant to the agreement, SFJ paid the Company $60,000,000 following the signing of the agreement, and agreed to pay the Company up to an additional $60,000,000 in the aggregate in three equal installments upon the achievement of specified development milestones with respect to the Company’s Phase 3 program for APL-2 in PNH and subject to the Company having cash resources at the time sufficient to fund at least 10 months of the Company’s operations. In addition, upon the mutual agreement of the Company and SFJ, at any time after the earlier of the date that the Company has reviewed the primary endpoint data from its PEGASUS Phase 3 trial of APL-2 in patients with PNH and March 31, 2020, SFJ may fund an additional $50,000,000 of the Company’s development costs.

On June 7, 2019, the Company and SFJ amended the development funding agreement. Under the SFJ Amendment, SFJ agreed to make an additional $20,000,000 funding payment to the Company to support the development of APL-2 for the treatment of patients with PNH. This additional $20,000,000 payment is in addition to and not part of the Additional SFJ Funding.

On September 23, 2019, the Company received $20,000,000 from SFJ as the second installment of the additional $60,000,000 upon the achievement of a milestone.

Under the SFJ Agreement following regulatory approval by the FDA or EMA for the use of APL-2 as a treatment for PNH the Company will be obligated to pay SFJ an initial payment of up to $5,000,000 (or a total of $10,000,000 if regulatory approval is granted by the FDA and the EMA) and then up to an additional $226,000,000 in the aggregate (or up to $452,000,000 if regulatory approval is granted by the FDA and the EMA) in six additional annual payments with the majority of the payments being made from the third anniversary to the sixth anniversary of regulatory approval. Such payments will be proportionately adjusted in the event that the actual funding from SFJ is lower or greater than $120,000,000 (including as a result of the payment of the Additional SFJ Funding but excluding the $20,000,000 funding payment made under the SFJ Amendment). Additionally, the Company granted a security interest in all of its assets, excluding intellectual property and license agreements to which it is a party. In connection with the grant of the security interest, the Company agreed to certain affirmative and negative covenants, including restrictions on its ability to pay dividends, incur additional debt or enter into licensing transactions with respect to its intellectual property, other than specified types of licenses.

The SFJ Agreement is presented as a derivative liability on the balance sheet as of September 30, 2019. The liability was initially recorded at the value of the $60,000,000 aggregate cash received pursuant to the contractual terms, which was determined to have been fair value, and subsequently remeasured at March 31, 2019 as a level 3 derivative, with the change in fair value of $736,000 recorded for the three months ended March 31, 2019 in loss from remeasurement of development derivative liability on the income statement. The Company received an additional $40,000,000 in June 2019 and the derivative liability under the SFJ Agreement (as amended) was subsequently remeasured at June 30, 2019 as a level 3 derivative, with the change in fair value of $9,104,000 recorded for the three months ended June 30, 2019 in loss from remeasurement of development derivative liability on the income statement. The Company received an additional $20,000,000 in September 2019 and the derivative liability under the SFJ Agreement (as amended) was subsequently remeasured at September 30, 2019 as a level 3 derivative, with the change in fair value of $263,000

recorded for the three months ended September 30, 2019 in loss from remeasurement of development derivative liability on the income statement, with a remeasured fair value of $130,103,000 as of September 30, 2019 on the consolidated balance sheet.

The derivative is valued using a scenario-based discounted cash flow method, whereby each scenario makes assumptions about the probability and timing of cash flows, and such cash flows are present valued using a risk-adjusted discount rate. The analysis is calibrated such that the value of the derivative as of the date of the SFJ Agreement was consistent with an arm’s-length transaction. Key inputs to the level 3 fair value model include (i) the probability and timing of achieving stated development milestones to receive the next tranches of funding, (ii) the probability and timing of achieving FDA and EMA approval, (iii) SFJ’s cost of borrowing (8.0%), and (iv) the Company’s cost of borrowing (16.49%).

SFJ’s implied cost of borrowing was 8.0% and the Company’s implied cost of borrowing was 16.49% as of the reporting date. These implied costs of borrowing were determined assuming the SFJ Agreement was initially executed with arm’s-length terms. If the SFJ Agreement was instead not determined to be an arm’s-length transaction, then implied discount rates could differ.

Long-term Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Long-term Debt

5. Long-term Debt

Convertible Senior Notes

On September 16, 2019, the Company completed a private offering of Convertible Notes with an aggregate principal amount of $220,000,000.

The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 3.5% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2020. The Convertible Notes will mature on September 15, 2026, unless earlier converted, redeemed or repurchased in accordance with their terms.

The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 25.3405 shares per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $39.46 per share of common stock). The conversion rate is subject to customary anti-dilution adjustments. In addition, following certain events that occur prior to the maturity date or if the Company deliver a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such corporate event or a notice of redemption, as the case may be, in certain circumstances as provided in the indenture.

Prior to March 15, 2026, the Convertible Notes are convertible only upon the occurrence of certain events. On or after March 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date of the Convertible Notes, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election.

Prior to September 20, 2023, the Company may not redeem the Convertible Notes. The Company may redeem for cash all or a portion of the Convertible Notes, at its option, on or after September 20, 2023 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

If the Company undergoes a “fundamental change,” as defined in the Indenture, prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Pursuant to Accounting Standards Codification (“ASC”) Subtopic 470-20 Convertible Debt, the Company used an effective interest rate of 10.5% to determine the liability component of the Convertible Notes. This resulted in the recognition of $145,065,803

as the liability component of the Convertible Notes and the recognition of the residual amount of $74,934,197 as the debt discount with a corresponding increase to additional paid in capital for the equity component of the Convertible Notes. Aggregate debt issuance costs of $7,105,000 was allocated to the liability and equity components in the amounts of $4,684,966 and $2,420,034, respectively.

Interest expense for the Convertible Notes was $468,964 from inception through September 30, 2019, which included amortization of the discount on the Convertible Notes of $224,655, accrued semi-annual coupon payable of $235,278 and amortization of debt issuance costs of $9,031. As of September 30, 2019, $4,675,935 of debt issuance costs was recorded on the consolidated balance sheet as a reduction to the carrying amount of the Convertible Notes.

The aggregate balance of the Convertible Notes, net of unamortized debt issuance costs, as of September 30, 2019 was $140,614,523.

Capped Call Transactions

On September 11, 2019, concurrently with the pricing of the Convertible Notes, the Company entered into capped call transactions with two counterparties. The capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which is initially $39.4625 (the conversion price of the Convertible Notes) and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of such Convertible Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, which is initially $63.14 per share, representing a premium of 100% above the last reported sale price of $31.57 per share of its common stock on The Nasdaq Global Select Market on September 11, 2019, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.

Pursuant to ASC 815-40 Derivatives and Hedging, the Company determined that the capped call transactions should be classified as equity instruments and the capped call premium paid in the amount of $28,380,000 was recorded as a reduction to additional paid-in capital as of September 30, 2019.

Term Loan Facility

On October 20, 2017, the Company entered into a loan and security agreement with Silicon Valley Bank (“SVB”) to provide for a $20,000,000 term loan facility (the “term loan facility”). Borrowings under the term loan facility accrued interest at a floating rate per annum equal to the WSJ prime rate plus 1.50%. Under the agreement, the Company was required to make monthly interest-only payments through November 1, 2019 and was required to make 24 equal monthly payments of principal, plus accrued interest, from November 1, 2019 through October 1, 2021, when all unpaid principal and interest became due and payable.

On March 26, 2019, the Company voluntarily repaid all outstanding amounts due and owed, including applicable termination fees, under the term loan facility. The final payment of $21,802,403 totaled per diem interest of $101,111 and $21,701,292 for the outstanding balance of the term loan which included (i) a final payment equal to 8% of the original principal amount of the term loan of $1,600,000, and (ii) a prepayment fee contractually owed of $100,000 plus other fees of $1,292 which resulted in a total loss on extinguishment of debt of $1,208,132.

In connection with the Company’s entry into the term loan facility, the Company issued to SVB a warrant to purchase 14,064 shares of the Company’s common stock with an exercise price per share of $5.484. The warrant has a ten-year term and includes a put option pursuant to which, in the event of an acquisition, change in control or dissolution or winding up of the Company, or the expiration of the warrant, SVB may require the Company to repurchase the warrant for a total aggregate purchase price of $250,000.

Promissory Note

On October 19, 2017, the Company issued and sold an unsecured promissory note in the principal amount of $7,000,000 to Golda Darty Partners S.A. (“GDP”). The promissory note accrued interest at a rate per annum of 8.0%, and was due and payable quarterly in arrears on the 19th day of each April, July, October and January. The promissory note had a maturity date of October 19, 2022 when the $7,000,000 would be due and payable in its entirety. The promissory note was contractually subordinated to the Company’s obligations to SFJ under the SFJ Agreement.

On September 16, 2019, the Company voluntarily repaid all outstanding amounts due and owed under the promissory note, except for a small amount of interest subsequently repaid. The payment of $7,118,904 totaled per diem interest of $118,904 and $7,000,000 for the outstanding principal balance of the promissory note.

In connection with the issuance and sale of the above promissory note, the Company issued to GDP a warrant to purchase 93,764 shares of the Company’s common stock at a price per share of $5.484, which was exercised in whole in October 2017. The Company recorded the fair value of the warrant in the aggregate amount of $430,160 as a discount to the promissory note. This amount was being accreted as additional interest expense over the term of the promissory note. Upon the repayment of the promissory note, the Company recorded a loss on extinguishment of debt of $293,083 due to the remaining discount.

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

6. Leases

On January 1, 2019, The Company adopted ASU 2016-02 Leases (Topic 842) using a modified retrospective method. The Company recognized $5,511,865 of lease assets and liabilities. There was no impact to retained earnings upon adoption of Topic 842. The underlying assets of the Company’s leases primarily relate to office space leases, but also include some equipment leases. The Company determines if an arrangement qualifies as a lease at its inception. During 2019, the Company leased additional office space resulting in an initial recognition value of $8,617,256 of lease assets and liabilities.

As a practical expedient permitted under Topic 842, the Company has elected to account for the lease and non-lease components as a single lease component for all leases of which it is the lessee. Lease payments, which may include lease and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts that depend on a rate or index as stipulated in the lease contract. When the Company cannot readily determine the rate implicit in the lease, the Company determines its incremental borrowing rate by using the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment.

The Company enters into lease agreements with terms generally ranging from 2-7 years. Some of the Company’s lease agreements include Company options to extend the lease on a month to month basis or for set periods for up to five years. Many leases also include options to terminate the leases within one year or per other contractual terms. Renewal and termination options were generally not included in the lease term for the Company’s existing operating leases.

As of September 30, 2019, all leases were classified as operating lease assets and liabilities. Operating lease assets were $13,332,783 and operating lease liabilities were $13,559,403 at September 30, 2019. At September 30, 2019, the weighted average remaining lease term of operating leases was 5.35 years and the weighted average discount rate used to measure the outstanding operating lease liabilities leases was 8.24%.

For the three and nine months ended September 30, 2019, the total lease cost for operating lease expense was: $561,748 and $1,448,128, respectively.

Supplemental cash flow information related to operating leases for the nine months ended September 30, 2019 is as follows:

Operating cash flows from operating leases

1,222,777

Right of use assets obtained in exchange for

lease obligations

14,296,285

The maturity of the Company’s operating lease liabilities as of September 30, 2019 are as follows:

2019	$	780,390
2020		3,268,292
2021		2,896,042
2022		2,915,517
2023 and thereafter		6,905,434
Total future minimum lease payments		16,765,675
Less imputed interest		(3,206,272)
Total operating lease liabilities	$	13,559,403

Comparative disclosures under ASC 840:

Rental expense under operating leases totaled $189,883 and $468,214 for the three and nine months ended September 30, 2018, respectively.

As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, ASC 840, Leases, future minimum rental payments for lease obligations with initial terms in excess of one year as of December 31, 2018 were as follows:

2019	$	1,251,720
2020		1,292,025
2021		975,750
2022		998,350
2023 and thereafter		2,341,219
	$	6,859,064

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly;

Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The following tables present information about the Company’s financial instruments and the related the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	92,355,167					$	92,355,167
Total Financial Assets	$	92,355,167	$	—	$	—	$	92,355,167
Financial Liabilities:
Term loan facility			$	18,722,321			$	18,722,321
Related party promissory note				7,401,203				7,401,203
Common stock warrant liability*				158,783				158,783
Total Financial Liabilities	$	—	$	26,282,307	$	—	$	26,282,307

	September 30, 2019
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	377,435,123					$	377,435,123
Total Financial Assets	$	377,435,123	$	—	$	—	$	377,435,123
Financial Liabilities:
Convertible senior notes					$	140,614,523	$	140,614,523
Development derivative liability*						130,103,000		130,103,000
Common stock warrant liability*			$	250,000		—		250,000
Total Financial Liabilities	$	—	$	250,000	$	270,717,523	$	270,967,523

These financial liabilities are remeasured and recognized at fair value on the Balance Sheet with the change in fair value recognized in the Statement of Operations.

As of December 31, 2018, the fair value of the Company's promissory note was $7,401,203, based on discounted cash flows, market-based expectations for interest rates, credit risk and the contractual terms of the debt instrument. The term loan facility paid interest at a variable interest rate and accordingly the carrying amount approximated fair value at December 31, 2018. The common stock warrant liability is valued based upon the underlying value of the Company’s stock.

As of September 30, 2019, the fair value of debt component of the Company's convertible notes was $140,614,523, based on the discounted cash flows for comparable straight debt instrument. The convertible notes accrue a semi-annual coupon at an annual rate of 3.5%, which was included in accrued expenses in the consolidated balance sheet at September 30, 2019.

The fair value of the SFJ Agreement is presented as a derivative liability based on level 3 inputs. The derivative is valued using a scenario-based discounted cash flow method, whereby each scenario makes assumptions about the probability and timing of cash flows, and such cash flows are present valued using a risk-adjusted discount rate. The analysis is calibrated such that the value of the derivative as of the date of the SFJ Agreement was consistent with an arm’s-length transaction. Key inputs to the level 3 fair value model include (i) the probability and timing of achieving stated development milestones to receive the next tranches of funding, (ii) the probability and timing of achieving FDA and EMA approval, (iii) SFJ’s cost of borrowing (8.0%), and (iv) the Company’s cost of borrowing (16.49%).

- 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

Refundable Research and Development Credit and Income Taxes

9 Months Ended

Sep. 30, 2019

Refundable Research And Development Credit And Income Taxes [Abstract]

Refundable Research And Development Credit And Income Taxes

8. Refundable Research and Development Credit and Income Taxes

The Company earns non-income related refundable Australian research and development credits that are settled and paid to the Company annually. The associated income from the credits are an offset to research and development expenses.

The Company’s income tax provision is computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. For the three months and nine months ended September 30, 2019 and 2018, there were no current or

deferred income tax expenses or benefits due to the Company’s net losses, research and development credits and increases in its deferred tax asset valuation allowance during those periods.

The Company’s estimate of the realizability of the deferred tax asset is dependent on estimates of projected future levels of taxable income. In analyzing future taxable income levels, the Company considered all evidence currently available, both positive and negative. Based on this analysis, the Company has recorded a valuation allowance for all deferred tax assets as of September 30, 2019.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

The Company contracts to conduct research and development activities with third parties. Certain of these contracts commit the company to pay future milestone payments up to $15,000,000 or to pay royalty fees ranging from 3-6% if any of the research results in regulatory approval or commercial revenue for a product. The scope of the services under the research and development contracts can be modified and the contracts cancelled by the Company upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice. If the Company were to cancel these contracts as of September 30, 2019, the Company would be required to pay certain termination costs and other fees of approximately $1,707,100 that would be incurred in future periods.

The Company also has certain payment and other obligations under the SFJ Agreement, which are discussed above in Note 4.

Net Loss per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Net Loss per Share

10. Net Loss per Share

Since the Company was in a loss position for all periods presented, basic net loss per common share is the same as diluted net loss per common share for all periods presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. Convertible notes and shares outstanding presented below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, as their effect is anti-dilutive:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2018		2019		2018		2019
Convertible notes		—		—		—		—
Common stock options		7,271,126		10,374,342		7,271,126		10,374,342
Common stock warrants		14,064		14,064		14,064		14,064
Total		7,285,190		10,388,406		7,285,190		10,388,406

Related Party Transaction

9 Months Ended

Sep. 30, 2019

Related Party Transaction

11. Related Party Transaction

Effective as of May 1, 2018, the Company entered into a subscription license agreement and a services agreement with Revon Systems, Inc. (“Revon”). Under the subscription license agreement, Revon granted the Company an exclusive license to use the Revon software platform and applications for any purpose with respect to the Company's programs in age-related macular degeneration, hemolytic diseases and complement-dependent nephropathies for an annual license fee of $175,000 for a two year initial term and an option to obtain a perpetual, exclusive license thereafter for $350,000. Under the services agreement, Revon provided development services with respect to the Revon software to the Company for $250,000 during the first year. Prior to the acquisition of Revon by an unrelated third party in July 2019, the Company paid the remainder of the annual license fee due for the second year, exercised the option for the perpetual license and discontinued the services agreement.

Each of Cedric Francois, the Company’s chief executive officer, Pascal Deschatelets, the Company’s chief operating officer, and Alec Machiels, a member of the board of directors, is an affiliate of Revon. The Board approved the Revon agreements after review by a subcommittee of the disinterested members of the Board and determination by the full Board that the terms of the Revon agreements were fair, reasonable and in the best interests of the Company. The exercise of the option for the perpetual license was approved in accordance with the Company’s related party transaction policy.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Apellis Australia Pty Ltd, Apellis Ireland Ltd and Apellis Switzerland GmbH. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”), for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted and, accordingly, the balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of the Company’s financial information. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2019.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company is required to disclose information on the fair value of financial instruments and inputs that enable an assessment of the fair value. The three levels of the fair value hierarchy prioritize valuation inputs based upon the observable nature of those inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly; Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company’s financial instruments, in addition to those presented in Note 5, Long-Term Debt, and Note 7, Fair Value Measurements, include cash and cash equivalents, the Australian research and development credit, accounts payable and accrued liabilities. Management believes that the carrying amounts of cash and cash equivalents, the Australian research and development credit, accounts payable and accrued expenses approximate the fair value due to the short-term nature of those instruments.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents are defined as cash in banks and investment instruments having maturities of three months or less from their acquisition date. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value.
Foreign Currency	Foreign Currency The financial position and results of operations of the Company's Australian and Swiss subsidiaries is measured using the foreign subsidiary's local currency. Revenues and expenses of the subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period from January 1, through September 30, 2019. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity. In 2018, due to the growth in volume of research contracts and intercompany loans exclusively denominated in local currency, effective August 1, 2018, the functional currency of the Company’s Australian subsidiary was changed from the U.S. dollar to the Australian dollar. The impact of the change in functional currency was not material to the audited consolidated financial statements for the year ended December 31, 2018.
Reclassifications	Reclassifications Certain prior year amounts have been reclassified to conform to the 2019 presentation.

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Text Block [Abstract]

Schedule of Accrued Expenses

Accrued expenses are as follows:

	December 31,		September 30,
	2018		2019
Accrued research and development	$	3,481,570	$	18,344,099
Accrued payroll liabilities		269,046		7,586,198
Other		1,352,386		4,501,310
Total	$	5,103,002	$	30,431,607

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Supplemental Cash Flow Information Related to Operating Leases

Supplemental cash flow information related to operating leases for the nine months ended September 30, 2019 is as follows:

Operating cash flows from operating leases

1,222,777

Right of use assets obtained in exchange for

lease obligations

14,296,285

Maturity of Operating Lease Liabilities

The maturity of the Company’s operating lease liabilities as of September 30, 2019 are as follows:

2019	$	780,390
2020		3,268,292
2021		2,896,042
2022		2,915,517
2023 and thereafter		6,905,434
Total future minimum lease payments		16,765,675
Less imputed interest		(3,206,272)
Total operating lease liabilities	$	13,559,403

Schedule of Future Minimum Rental Payments for Lease Obligations

future minimum rental payments for lease obligations with initial terms in excess of one year as of December 31, 2018 were as follows:

2019	$	1,251,720
2020		1,292,025
2021		975,750
2022		998,350
2023 and thereafter		2,341,219
	$	6,859,064

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Financial Instruments and the Related Fair Value Hierarchy of the Valuation Techniques Utilized

The following tables present information about the Company’s financial instruments and the related the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	92,355,167					$	92,355,167
Total Financial Assets	$	92,355,167	$	—	$	—	$	92,355,167
Financial Liabilities:
Term loan facility			$	18,722,321			$	18,722,321
Related party promissory note				7,401,203				7,401,203
Common stock warrant liability*				158,783				158,783
Total Financial Liabilities	$	—	$	26,282,307	$	—	$	26,282,307

	September 30, 2019
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	377,435,123					$	377,435,123
Total Financial Assets	$	377,435,123	$	—	$	—	$	377,435,123
Financial Liabilities:
Convertible senior notes					$	140,614,523	$	140,614,523
Development derivative liability*						130,103,000		130,103,000
Common stock warrant liability*			$	250,000		—		250,000
Total Financial Liabilities	$	—	$	250,000	$	270,717,523	$	270,967,523

These financial liabilities are remeasured and recognized at fair value on the Balance Sheet with the change in fair value recognized in the Statement of Operations.

Net Loss per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Summary of Shares Outstanding that were Excluded from Calculation of Diluted Net Loss Per Share

Convertible notes and shares outstanding presented below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, as their effect is anti-dilutive:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2018		2019		2018		2019
Convertible notes		—		—		—		—
Common stock options		7,271,126		10,374,342		7,271,126		10,374,342
Common stock warrants		14,064		14,064		14,064		14,064
Total		7,285,190		10,388,406		7,285,190		10,388,406

Nature of Organization and Operations - Additional Information (Detail)								3 Months Ended				9 Months Ended
	Mar. 31, 2020 USD ($)	Sep. 23, 2019 USD ($)	Sep. 16, 2019 USD ($)	Jun. 27, 2019 USD ($)	Mar. 11, 2019 USD ($) $ / shares shares	Feb. 28, 2019 USD ($) Installment	Apr. 23, 2018 USD ($) $ / shares shares	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 11, 2019 CounterParty $ / shares	Jun. 07, 2019 USD ($)	Dec. 31, 2018 USD ($)
Nature Of Organization And Operations [Line Items]
Proceeds from follow-on public offering after deducting underwriting discounts and commissions												$ 110,239,260	$ 131,194,030
Cash and cash equivalents									$ 433,994,644			433,994,644				$ 176,267,666
SFJ Agreement [Member]
Nature Of Organization And Operations [Line Items]
Proceeds from SFJ agreement				$ 20,000,000		$ 60,000,000			$ 20,000,000	$ 40,000,000	$ 60,000,000
Additional funding amount upon achievement of development milestones		$ 20,000,000		40,000,000		$ 60,000,000
Number of milestone payments \| Installment						3
Development funding for minimum period of operating expense						10 months
Increase in additional funding for development costs															$ 20,000,000
Proceeds SFJ agreement upon achievement of milestone				$ 20,000,000
SFJ Agreement [Member] \| Scenario Forecast [Member]
Nature Of Organization And Operations [Line Items]
Additional funding amount upon achievement of development milestones								$ 20,000,000
Additional funding for development costs	$ 50,000,000
Capped Call Transactions [Member]
Nature Of Organization And Operations [Line Items]
Number of counterparties \| CounterParty														2
Initial conversion price \| $ / shares														$ 39.4625
Follow-on Public Offerings [Member]
Nature Of Organization And Operations [Line Items]
Issuance of common stock in follow-on offering, shares \| shares					6,900,000		5,500,000
Price of common stock \| $ / shares					$ 17.00		$ 25.50
Proceeds from follow-on public offering after deducting underwriting discounts and commissions					$ 109,603,159		$ 131,324,477
Underwriting discounts and commissions					7,000,000		8,415,000
Offering Cost					$ 680,891		$ 509,973
Convertible Senior Notes Due 2026 [Member]
Nature Of Organization And Operations [Line Items]
Debt instrument, stated percentage			3.50%
Option to purchase days			13 days
Net proceeds from the sale of the notes												212,895,000
Payments of transactions cost												$ 28,380,000
Debt instrument, due and payment description												The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 3.5% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2020.
Debt instrument, frequency of periodic payment												semiannually
Maturity date			Sep. 15, 2026
Convertible Senior Notes Due 2026 [Member] \| Maximum [Member]
Nature Of Organization And Operations [Line Items]
Additional principal amount			$ 33,000,000
Convertible Senior Notes Due 2026 [Member] \| Private Offering [Member]
Nature Of Organization And Operations [Line Items]
Principal amount			$ 220,000,000

Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Accrued Liabilities Current [Abstract]
Accrued research and development	$ 18,344,099	$ 3,481,570
Accrued payroll liabilities	7,586,198	269,046
Other	4,501,310	1,352,386
Total	$ 30,431,607	$ 5,103,002

Development Derivative Liability - Additional Information (Details)					3 Months Ended				9 Months Ended
	Mar. 31, 2020 USD ($)	Sep. 23, 2019 USD ($)	Jun. 27, 2019 USD ($)	Feb. 28, 2019 USD ($) Installment	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 07, 2019 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Loss from remeasurement of development derivative liability						$ 263,000			$ 10,103,000
Development derivative liability						130,103,000			$ 130,103,000
Level 3 [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Implied cost of borrowing discount rates									16.49%
SFJ Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from SFJ agreement			$ 20,000,000	$ 60,000,000		20,000,000	$ 40,000,000	$ 60,000,000
Additional funding amount upon achievement of development milestones		$ 20,000,000	40,000,000	$ 60,000,000
Number of milestone payments \| Installment				3
Development funding for minimum period of operating expense				10 months
Increase in additional funding for development costs										$ 20,000,000
Proceeds SFJ agreement upon achievement of milestone			$ 20,000,000
Number of additional annual payments \| Installment				6
Minimum payment of additional funding amount				$ 120,000,000
Increase in additional funding amount under amendment										$ 20,000,000
Loss from remeasurement of development derivative liability						263,000	$ 9,104,000	$ 736,000
Development derivative liability						$ 130,103,000			$ 130,103,000
SFJ Agreement [Member] \| Level 3 [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Implied cost of borrowing discount rates									8.00%
SFJ Agreement [Member] \| Maximum [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Obligated to pay initial payment				5,000,000
Aggregate amount of additional annual payments				226,000,000
SFJ Agreement [Member] \| Regulatory Approval Granted by FDA and EMA
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Obligated to pay initial payment				10,000,000
SFJ Agreement [Member] \| Regulatory Approval Granted by FDA and EMA \| Maximum [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Aggregate amount of additional annual payments				$ 452,000,000
SFJ Agreement [Member] \| Scenario Forecast [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Additional funding amount upon achievement of development milestones					$ 20,000,000
Additional funding for development costs	$ 50,000,000

Long-term Debt - Additional Information (Detail)					1 Months Ended	3 Months Ended	9 Months Ended
Long-term Debt - Additional Information (Detail)	Sep. 16, 2019 USD ($)	Mar. 26, 2019 USD ($)	Oct. 20, 2017 USD ($) Installment $ / shares shares	Oct. 19, 2017 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares	Sep. 30, 2019 USD ($) $ / shares	Sep. 30, 2019 USD ($) d $ / shares	Sep. 30, 2018 USD ($)	Sep. 11, 2019 USD ($) CounterParty $ / shares
Debt Instrument [Line Items]
Amortization of debt discounts							$ 51,725	$ 53,047
Amortization of debt issuance costs							233,686
Premium paid for capped call transactions							28,380,000
Loss on extinguishment of debt						$ 293,083	$ 1,501,215
Term Loan Facility [Member]
Debt Instrument [Line Items]
Principal amount		$ 21,701,292
Final payment due amount		21,802,403
Debt instrument per diem interest amount		$ 101,111
Final payment percentage equal to original principal amount		8.00%
Final payment towards original principal amount		$ 1,600,000
Prepayment fee		100,000
Other fees		1,292
Loss on extinguishment of debt		$ 1,208,132
Silicon Valley Bank [Member] \| Term Loan Facility [Member]
Debt Instrument [Line Items]
Warrant to purchase common stock \| shares			14,064
Exercise price per share \| $ / shares			$ 5.484
Warrant term			10 years
Aggregate purchase price			$ 250,000
Loan and Security Agreement [Member] \| Silicon Valley Bank [Member]
Debt Instrument [Line Items]
Debt instrument, due and payment description							the Company was required to make monthly interest-only payments through November 1, 2019 and was required to make 24 equal monthly payments of principal, plus accrued interest, from November 1, 2019 through October 1, 2021, when all unpaid principal and interest became due and payable
Term loan facility			$ 20,000,000
Loan and Security Agreement [Member] \| Silicon Valley Bank [Member] \| Convertible Preferred Stock [Member]
Debt Instrument [Line Items]
Debt instrument, number of equal monthly installments \| Installment			24
Loan and Security Agreement [Member] \| Silicon Valley Bank [Member] \| Prime Rate [Member]
Debt Instrument [Line Items]
Interest bear rate			1.50%
Capped Call Transactions [Member]
Debt Instrument [Line Items]
Number of counterparties \| CounterParty									2
Initial conversion price \| $ / shares									$ 39.4625
Initial cap price \| $ / shares									63.14
Sale price \| $ / shares									$ 31.57
Convertible Senior Notes Due 2026 [Member]
Debt Instrument [Line Items]
Net proceeds from the sale of the notes							$ 212,895,000
Payments of transactions cost							$ 28,380,000
Debt instrument, stated percentage	3.50%
Debt instrument, due and payment description							The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 3.5% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2020.
Debt instrument, frequency of periodic payment							semiannually
Maturity date	Sep. 15, 2026
Redemption period, start date							Sep. 20, 2023
Threshold percentage of stock price trigger							130.00%
Threshold trading days \| d							20
Threshold consecutive trading days \| d							30
Redemption price, percentage							100.00%
Debt instrument effective interest rate									10.50%
Debt instrument convertible carrying amount of liability component									$ 145,065,803
Debt discount									74,934,197
Debt issuance costs									7,105,000
Debt interest expense					$ 468,964
Amortization of debt discounts					224,655
Accrued semi annual coupon payable					235,278
Amortization of debt issuance costs					9,031
Debt issuance costs gross					4,675,935	4,675,935	$ 4,675,935
Long-term debt					$ 140,614,523	$ 140,614,523	$ 140,614,523
Convertible Senior Notes Due 2026 [Member] \| Liability Component [Member]
Debt Instrument [Line Items]
Debt issuance costs									4,684,966
Convertible Senior Notes Due 2026 [Member] \| Equity Component [Member]
Debt Instrument [Line Items]
Debt issuance costs									$ 2,420,034
Convertible Senior Notes Due 2026 [Member] \| Common Stock [Member]
Debt Instrument [Line Items]
Terms of conversion							The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 25.3405 shares per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $39.46 per share of common stock).
Conversion ratio							0.0253405
Conversion price \| $ / shares					$ 39.46	$ 39.46	$ 39.46
Convertible Senior Notes Due 2026 [Member] \| Private Offering [Member]
Debt Instrument [Line Items]
Principal amount	$ 220,000,000
Unsecured Promissory Note [Member] \| Golda Darty Partners S A [Member]
Debt Instrument [Line Items]
Principal amount	7,000,000			$ 7,000,000
Debt instrument, due and payment description							The promissory note accrued interest at a rate per annum of 8.0%, and was due and payable quarterly in arrears on the 19th day of each April, July, October and January.
Maturity date				Oct. 19, 2022
Long-term debt				$ 7,000,000
Debt instrument per diem interest amount	118,904
Loss on extinguishment of debt				$ 293,083
Warrant to purchase common stock \| shares				93,764
Exercise price per share \| $ / shares				$ 5.484
Accrued interest rate				8.00%
Repayment of related party due amount including diem interest	$ 7,118,904
Fair value of warrant				$ 430,160

Leases - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended
Leases - Additional Information (Detail) - USD ($)	Sep. 30, 2019	Sep. 30, 2019	Jan. 01, 2019
Lessee Lease Description [Line Items]
Operating lease asset	$ 13,332,783	$ 13,332,783
Operating lease liability	$ 13,559,403	$ 13,559,403
Operating lease description		The Company enters into lease agreements with terms generally ranging from 2-7 years. Some of the Company’s lease agreements include Company options to extend the lease on a month to month basis or for set periods for up to five years. Many leases also include options to terminate the leases within one year or per other contractual terms. Renewal and termination options were generally not included in the lease term for the Company’s existing operating leases
Operating lease, existence of option to extend		true
Operating lease maximum term of options to terminate lease		1 year
Weighted average remaining lease term of operating leases	5 years 4 months 6 days	5 years 4 months 6 days
Weighted average discount rate used to measure outstanding operating lease liabilities leases	8.24%	8.24%
Operating lease expense	$ 561,748	$ 1,448,128
Rental expense under operating leases	$ 189,883	$ 468,214
Minimum [Member]
Lessee Lease Description [Line Items]
Operating lease, term of contract	2 years	2 years
Maximum [Member]
Lessee Lease Description [Line Items]
Operating lease, term of contract	7 years	7 years
Operating lease options to extend lease	5 years	5 years
ASU 2016-02 [Member]
Lessee Lease Description [Line Items]
Operating lease asset			$ 5,511,865
Operating lease liability			5,511,865
Additional operating lease asset			8,617,256
Additional operating lease liability			$ 8,617,256

Leases - Supplemental Cash Flow Information Related to Operating Leases (Detail)	9 Months Ended
	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 1,222,777
Right of use assets obtained in exchange for lease obligations	$ 14,296,285

Leases - Maturity of Operating Lease Liabilities (Detail)	Sep. 30, 2019 USD ($)
Leases [Abstract]
2019	$ 780,390
2020	3,268,292
2021	2,896,042
2022	2,915,517
2023 and thereafter	6,905,434
Total future minimum lease payments	16,765,675
Less imputed interest	(3,206,272)
Total operating lease liabilities	$ 13,559,403

Leases - Schedule of Future Minimum Rental Payments for Lease Obligations (Detail)	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 1,251,720
2020	1,292,025
2021	975,750
2022	998,350
2023 and thereafter	2,341,219
Total	$ 6,859,064

Fair Value Measurements - Schedule of Financial Instruments and the Related Fair Value Hierarchy of the Valuation Techniques Utilized (Details) - USD ($)

Sep. 30, 2019

Dec. 31, 2018

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Assets

$ 377,435,123

$ 92,355,167

Total Financial Liabilities

270,967,523

26,282,307

Money Market Funds [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Assets

377,435,123

92,355,167

Term Loan Facility [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

18,722,321

Related Party Promissory Note [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

7,401,203

Convertible Senior Notes [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

140,614,523

Development Derivative Liability [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

^[1]

130,103,000

Common Stock Warrant Liability [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

^[1]

250,000

158,783

Level 1 [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Assets

377,435,123

92,355,167

Level 1 [Member] | Money Market Funds [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Assets

377,435,123

92,355,167

Level 2 [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

250,000

26,282,307

Level 2 [Member] | Term Loan Facility [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

18,722,321

Level 2 [Member] | Related Party Promissory Note [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

7,401,203

Level 2 [Member] | Common Stock Warrant Liability [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

^[1]

250,000

$ 158,783

Level 3 [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

270,717,523

Level 3 [Member] | Convertible Senior Notes [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

140,614,523

Level 3 [Member] | Development Derivative Liability [Member]

Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]

Total Financial Liabilities

^[1]

$ 130,103,000

[1]	These financial liabilities are remeasured and recognized at fair value on the Balance Sheet with the change in fair value recognized in the Statement of Operations.

Fair Value Measurements - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Cash And Cash Equivalents [Line Items]
Convertible notes	$ 140,614,523
Level 2 [Member] \| Promissory Note [Member]
Cash And Cash Equivalents [Line Items]
Long-term Debt		$ 7,401,203
Level 3 [Member]
Cash And Cash Equivalents [Line Items]
Convertible notes	$ 140,614,523
Convertible notes, interest rate	3.50%
Percentage of cost of borrowing	16.49%
Level 3 [Member] \| SFJ Agreement [Member]
Cash And Cash Equivalents [Line Items]
Percentage of cost of borrowing	8.00%

Refundable Research and Development Credit and Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Expense Benefit Continuing Operations [Abstract]
Current income tax expense or benefits	$ 0	$ 0	$ 0	$ 0
Deferred income tax expense or benefits	$ 0	$ 0	$ 0	$ 0

Commitments and Contingencies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2019 USD ($)
Commitments And Contingencies [Line Items]
Estimated termination costs and other fees	$ 1,707,100
Minimum [Member]
Commitments And Contingencies [Line Items]
Payment of royalty fees	3.00%
Maximum [Member]
Commitments And Contingencies [Line Items]
Future milestone payments	$ 15,000,000
Payment of royalty fees	6.00%

Net Loss per Share - Summary of Shares Outstanding that were Excluded from Calculation of Diluted Net Loss Per Share (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	10,388,406	7,285,190	10,388,406	7,285,190
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	10,374,342	7,271,126	10,374,342	7,271,126
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	14,064	14,064	14,064	14,064

Related Party Transaction - Additional Information (Detail) - Revon [Member] - License Agreement and Services Agreement [Member]	May 01, 2018 USD ($)
Related Party Transaction [Line Items]
Annual license fee	$ 175,000
Related party transaction, initial term	2 years
Exclusive license option, thereafter	$ 350,000
Development service costs	$ 250,000