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myok-10q_20170630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37609

MYOKARDIA, INC.

(Exact name of registrant as specified in its charter)

Delaware

44-5500552

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

333 Allerton Ave.

South San Francisco, CA

(Address of principal executive offices)

94080

(Zip Code)

(650) 741-0900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s common stock on August 2, 2017 was 31,489,712 shares.

MYOKARDIA, INC.

TABLE OF CONTENTS

Page

PART I—FINANCIAL INFORMATION

3

Item 1. Condensed Consolidated Financial Statements

3

Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 (unaudited)

3

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2017 and 2016 (unaudited)

4

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 (unaudited)

5

Notes to Condensed Consolidated Financial Statements (unaudited)

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3. Quantitative and Qualitative Disclosures About Market Risk

22

Item 4. Controls and Procedures

22

PART II—OTHER INFORMATION

23

Item 1. Legal Proceedings

23

Item 1A. Risk Factors

23

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 3. Defaults Upon Senior Securities

53

Item 4. Mine Safety Disclosures

53

Item 5. Other Information

53

Item 6. Exhibits

53

SIGNATURES

54

EXHIBIT INDEX

55

2

PART I—FINANCIAL INFORMATION

MYOKARDIA, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

June 30,

2017

December 31,

2016

Assets

Current assets

Cash and cash equivalents

$

117,305

$

135,797

Short-term investments

16,011

4,072

Receivable from collaboration partner

45,000

Prepaid expenses and other current assets

1,242

1,394

Total current assets

134,558

186,263

Property and equipment, net

2,856

2,758

Long-term investments

31,986

12,002

Other long-term assets

363

283

Total assets

$

169,763

$

201,306

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

1,362

$

1,798

Accrued liabilities

10,153

8,690

Deferred revenue - current

22,500

22,500

Total current liabilities

34,015

32,988

Other long-term liabilities

303

436

Deferred revenue - noncurrent

11,250

22,500

Total liabilities

45,568

55,924

Commitments and contingencies (Note 6)

Stockholders’ equity

Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued and

outstanding

Common stock, $0.0001 par value, 150,000,000 and 150,000,000

shares authorized at June 30, 2017 and December 31, 2016, respectively;

31,455,894 and 31,428,998 shares issued and outstanding

at June 30, 2017 and December 31, 2016, respectively

3

3

Additional paid-in capital

226,471

223,208

Accumulated other comprehensive (loss) income

(50

)

8

Accumulated deficit

(102,229

)

(77,837

)

Total stockholders’ equity

124,195

145,382

Total liabilities and stockholders’ equity

$

169,763

$

201,306

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

MYOKARDIA, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

Three Months Ended

June 30,

Six Months Ended

June 30,

2017

2016

2017

2016

Collaboration and license revenue

$

5,625

$

3,549

$

11,250

$

7,099

Operating expenses:

Research and development

13,689

9,279

25,606

17,409

General and administrative

5,082

4,056

10,558

7,916

Total operating expenses

18,771

13,335

36,164

25,325

Loss from operations

(13,146

)

(9,786

)

(24,914

)

(18,226

)

Interest and other income, net

309

26

530

46

Net loss

(12,837

)

(9,760

)

(24,384

)

(18,180

)

Other comprehensive loss

(3

)

(58

)

Comprehensive loss

(12,840

)

(9,760

)

(24,442

)

(18,180

)

Net loss attributable to common stockholders

$

(12,837

)

$

(9,760

)

$

(24,384

)

$

(18,180

)

Net loss per share attributable to common stockholders,

basic and diluted

$

(0.41

)

$

(0.37

)

$

(0.78

)

$

(0.69

)

Weighted average number of shares used to compute net loss

per share attributable to common stockholders, basic and diluted

31,200,773

26,337,184

31,151,216

26,284,630

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

MYOKARDIA, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

Six Months Ended

June 30,

2017

2016

Cash flows from operating activities:

Net loss

$

(24,384

)

$

(18,180

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Stock-based compensation expense

2,746

1,018

Depreciation

634

531

Accretion of discounts and amortization of premiums on investments

41

Change in operating assets and liabilities:

Receivable from collaboration partner

45,000

Prepaid expenses and other current assets

152

216

Other long-term assets

(80

)

Accounts payable

(488

)

(436

)

Accrued liabilities

1,470

50

Other long-term liabilities

(86

)

(43

)

Deferred revenue

(11,250

)

(7,100

)

Net cash provided by (used in) operating activities

13,755

(23,944

)

Cash flows from investing activities:

Purchases of investments

(36,022

)

Sale of investments

4,000

Purchases of property and equipment

(617

)

(766

)

Net cash used in investing activities

(32,639

)

(766

)

Cash flows from financing activities:

Proceeds from exercise of stock options and employee stock purchase plan

430

213

Payments of financing-related costs

(38

)

(153

)

Net cash provided by financing activities

392

60

Net decrease in cash and cash equivalents

(18,492

)

(24,650

)

Cash and cash equivalents, beginning of period

135,797

112,265

Cash and cash equivalents, end of period

$

117,305

$

87,615

Supplemental disclosures of noncash investing and financing information

Vesting of early exercised options and restricted stock

$

99

$

180

Unpaid portion of property and equipment purchases included in period-end accounts

payable and accrued liabilities

$

218

$

12

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Formation and Business of the Company

MyoKardia, Inc. (the “Company”) is a clinical stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious and neglected rare cardiovascular diseases. Our initial focus is on the treatment of heritable cardiomyopathies, a group of rare, genetically-driven forms of heart failure that result from biomechanical defects in cardiac muscle contraction. We have used our precision medicine platform to generate a robust pipeline of therapeutic programs for the chronic treatment of the two most common forms of heritable cardiomyopathy—hypertrophic cardiomyopathy (“HCM”), and dilated cardiomyopathy (“DCM”).

The Company has completed enrollment in a Phase 2 clinical trial of mavacamten (formerly known as MYK-461), our product candidate for the treatment of HCM, and is currently enrolling subjects in a Phase 1 clinical trial of MYK-491, our product candidate for the treatment of DCM. Using our precision medicine development strategy, we believe we have efficiently generated clinical proof of mechanism for mavacamten in both healthy volunteers and in HCM patients, and we intend to pursue a similar path for MYK-491. In 2016, mavacamten was granted Orphan Drug Designation by the U.S. Food and Drug Administration (“FDA”), for the treatment of symptomatic, obstructive hypertrophic cardiomyopathy (“oHCM”), a subset of HCM.

Through June 30, 2017, the Company has financed its operations through an initial public offering (“IPO”), a follow-on public offering, private placements of redeemable convertible preferred stock and funds received in connection with a license and collaboration agreement with Aventis Inc., a wholly-owned subsidiary of Sanofi S.A., entered into in August 2014 (the “Collaboration Agreement”) (See Note 4). The Company received net proceeds of $93.9 million from the sale of shares of its Series A, A-1 and B redeemable convertible preferred stock. On November 3, 2015, the Company completed its IPO of 6,253,125 shares of common stock at an offering price of $10.00 per share, resulting in net proceeds of approximately $55.6 million, after deducting underwriting discounts, commissions and offering costs. On October 3, 2016, the Company completed a follow-on public offering of 4,370,000 shares of common stock at an offering price of $15.00 per share, resulting in net proceeds of approximately $61.1 million, after deducting underwriting discounts, commissions and estimated offering costs. In connection with the Collaboration Agreement, the Company has received $105.0 million from Sanofi S.A., consisting of a $35.0 million upfront payment, a $25.0 million milestone payment for the submission of an investigational new drug application (“IND”) for MYK-491 with the FDA in November 2016, and a $45.0 million continuation payment from Sanofi in January 2017. As of June 30, 2017, the Company had an accumulated deficit of $102.2 million and cash and cash equivalents of $117.3 million, short-term investments of $16.0 million and long-term investments of $32.0 million.

The accompanying unaudited Condensed Consolidated Financial Statements, in the opinion of management, include all adjustments which the Company considers necessary for the fair statement of the Condensed Consolidated Results of Operations and Comprehensive Loss and Cash Flows for the interim periods covered and the Condensed Consolidated Financial Position of the Company at the date of the balance sheets. The consolidated financial statements of the Company as at December 31, 2016 included the Company’s accounts and have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2017, or any other future period.

The accompanying unaudited Condensed Consolidated Financial Statements and related financial information should be read in conjunction with the Company’s audited consolidated financial statements and the related notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2017 (the “Annual Report”).

2. Summary of Significant Accounting Policies

Significant accounting policies are described in Note 2 to the consolidated financial statements for the year ended December 31, 2016 included in the Annual Report. There have been no changes to the Company’s significant accounting policies during the six months ended June 30, 2017, except as described below.

Adopted Accounting Pronouncements

Beginning in fiscal year 2017, the Company adopted Accounting Standard Update (“ASU”) No. 2016-09, Improvements to employee share-based payment accounting, which simplifies the accounting for employee share-based transactions. The amendments change, among other things, the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the

6

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification, and the classification of those taxes paid on the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of 2017. As a result of adopting this standard, we have made an accounting policy election to account for forfeitures as they occur. This change has been applied on a modified retrospective basis, resulting in an immaterial cumulative effect adjustment to the opening accumulated deficit on January 1, 2017. Upon adoption, the previously unrecognized excess tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance resulting in no impact to the accumulated deficit.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

In May 2017, the FASB issued ASU 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718 to address diversity in practice. An entity should account for the effects of a modification unless all the three specified conditions are met. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this ASU. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The Company has not determined the potential effects of this ASU on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18 (Topic 230), Restricted Cash, Statement of Cash Flows. This ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU should be applied using a retrospective transition method to each period presented. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases. This ASU requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company has not determined the potential effects of this ASU on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March, April, and May 2016, the FASB issued amended guidance including clarifying guidance on principal versus agent considerations, identification of performance obligations, collectability and noncash considerations. ASU 2014-09 and its amendments are effective for public entities for annual and interim periods beginning after December 15, 2017; therefore, the Company will adopt the new revenue standards in the first quarter of 2018. Since its formation, the Company has only had transactions which are recognized in revenu​e which ​relate to its Collaboration Agreement with Sanofi S.A. The Company is evaluating whether or not the identification of performance obligations and determination of their stand-alone values would remain unchanged under the new revenue standards. The Company is still assessing the impact of the adoption of the new revenue standards on its consolidated financial statements. As the Company completes its evaluation of this new standard, new information may arise that could change the Company’s current understanding of the impact to revenue recognition. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment and implementation plans accordingly.

7

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

3. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs other than quoted market prices included in Level 1 are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Fair Value Measurements at June 30, 2017

Total

Level 1

Level 2

Level 3

Assets

Money market funds

$

116,328

$

116,328

$

$

U.S. government agency obligations

31,984

31,984

Corporate securities

16,013

16,013

Total

$

164,325

$

116,328

$

47,997

$

Fair Value Measurements at December 31, 2016

Total

Level 1

Level 2

Level 3

Assets

Money market funds

$

136,481

$

136,481

$

$

U.S. government agency obligations

12,075

12,075

Corporate securities

3,999

3,999

Total

$

152,555

$

136,481

$

16,074

$

The following table is a summary of amortized cost, unrealized gain and loss, and fair value (in thousands) of the Company’s marketable securities by contractual maturities:

Fair Value Measurements at June 30, 2017

Amortized Cost

Unrealized Gain

Unrealized Loss

Fair Value

Cash equivalents (due within 90 days)

$

116,328

$

$

$

116,328

Short-term investments (due within one year)

16,031

(20

)

$

16,011

Long-term investments (due between one and two years)

32,011

6

(31

)

$

31,986

Total

$

164,370

$

6

$

(51

)

$

164,325

Fair Value Measurements at December 31, 2016

Amortized Cost

Unrealized Gain

Unrealized Loss

Fair Value

Cash equivalents (due within 90 days)

$

136,481

$

$

$

136,481

Short-term investments (due within one year)

4,072

4,072

Long-term investments (due between one and two years)

11,988

14

12,002

Total

$

152,541

$

14

$

$

152,555

8

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

4. Collaboration and License Agreement

Sanofi (Aventis Inc.)

In August 2014, the Company entered into the Collaboration Agreement with Aventis Inc., a wholly-owned subsidiary of Sanofi S.A., for the research, development and potential commercialization of pharmaceutical products for the treatment, prevention and diagnosis of hypertrophic and dilated cardiomyopathy, as well as potential additional indications.

Pursuant to the Collaboration Agreement, in addition to potential future royalty payments, Sanofi agreed to provide up to $200.0 million in financial consideration to the Company consisting of the following components:

The Company is also entitled to receive tiered royalties beginning in the mid-single digits to the mid-teens on net sales of certain hypertrophic cardiomyopathy (“HCM”) and dilated cardiomyopathy (“DCM”) finished products outside the United States and on net sales of certain DCM finished products in the United States. Sanofi is eligible to receive tiered royalties beginning in the mid-single digits to the low teens on the Company’s net sales of certain HCM finished products in the United States. In addition, under the terms of the Collaboration Agreement, Sanofi may reimburse the Company for a portion of the registration program costs for mavacamten. These registration costs are subject to Sanofi’s approval of the Registration Program Plan.

The Collaboration Agreement covers three main research programs, “HCM1” (or HCM-1 or mavacamten, formerly known as MYK-461), “HCM2” (or HCM-2) and “DCM1” (or DCM-1 or MYK-491). The Company is solely responsible for conducting research and development activities through early human efficacy studies, except for specified research activities to be conducted by Sanofi. The estimated completion of proof-of-concept phases are staggered, depending on the program. Thereafter, the Company will lead worldwide development and United States commercial activities for the mavacamten and HCM-2 programs, Sanofi will lead global development and commercial activities for DCM-1 and Sanofi will lead ex-United States development and commercial activities for the mavacamten and HCM-2 programs where it has ex-United States commercialization rights. Sanofi also has the option to co-promote in the U.S. for potential expanded cardiovascular diseases outside of the genetically targeted indications for the mavacamten and HCM-2 programs, with the Company having the option to co-promote the DCM-1 program in the United States.

The Company accounted for the Collaboration Agreement by evaluating each of the financial components discussed above:

1.

$35.0 million upfront payment. The Company received a non-refundable upfront payment and identified the following performance obligations at the inception of the Collaboration Agreement: (i) the transfer of intellectual property rights and know-how (license), (ii) the obligation to provide certain limited research and development services during the term of the license agreement and (iii) the obligation to participate on the development and commercialization committees. The Company applied the guidance under ASC 605-25, Multiple Element Arrangements, to account for this upfront payment. The Company evaluated the underlying goods and services delivered under the Collaboration Agreement and concluded that the performance obligations do not have standalone value, and accordingly accounted for the deliverables as one unit of accounting. The $35.0 million payment was recorded by the Company as deferred revenue on its consolidated balance sheet upon receipt, which the Company was recognizing as revenue on a straight-line basis over the expected term of research and development services through December 31, 2016 because there was not a more discernible pattern of performance in which the research and development services occurred. During the three months ended June 30, 2017 and 2016, the Company recognized zero and $3.5 million, respectively, and during the six months ended June 30, 2017 and 2016, the Company recognized zero and $7.1 million of revenue, respectively, related to the $35.0 million upfront payment under the Collaboration Agreement. As of June 30, 2017 and December 31, 2016, the Company did not have any deferred revenue on its consolidated balance sheet related to this upfront payment.

9

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

3.

$25.0 million milestone-based payment. The Company was eligible to receive a one-time, non-refundable, non-creditable payment of $25.0 million upon the submission of an investigational new drug application for any DCM-1 development candidate to the FDA or a comparable regulatory authority in Europe or another major market country for any DCM-1 product. The Company accounted for this milestone payment separately from the rest of the agreement. The Company has determined that the milestone was substantive as it was achieved based upon the Company’s past performance. The Company achieved this milestone in October 2016 and as a result, recognized the $25.0 million milestone payment from Sanofi as revenue during the year ended December 31, 2016.

an additional $40.0 million reduced by $5.0 million in connection with the purchase of the Company’s preferred stock, assuming the Company has not previously closed (i) either a Qualified IPO (at which time this obligation will terminate) or a private financing prior to a Qualified IPO and (ii) Sanofi has not previously purchased shares of the Company’s stock pursuant to such rights to purchase the Company’s capital stock in accordance with the terms of the Collaboration Agreement. The $40.0 million payment was reduced by $5.0 million to $35.0 million in connection with Sanofi’s subsequent purchase of shares of the Company’s Series B redeemable convertible preferred stock in April 2015, and the remaining obligation terminated in connection with the Company’s IPO in October 2015.

Sanofi elected to continue the Collaboration Agreement in December 2016. The Company recorded a receivable and deferred revenue as of December 31, 2016 for the $45.0 million continuation payment, upon receipt of the election to continue, which the Company is recognizing on a straight-line basis over the expected term of research and development services through December 31, 2018 because there is no more discernable pattern of performance for which the R&D services occur. The payment was subsequently received in January 2017. In relation to this continuation payment, the Company recognized $5.6 million and $11.3 million as revenue during the three and six months ended June 30, 2017, respectively, and had deferred revenue on its consolidated balance sheet of $33.8 million as of June 30, 2017.

Sanofi also had a time-restricted right to purchase $40.0 million in shares of the Company’s redeemable convertible preferred stock at the discounted price, which would have satisfied the $40.0 million obligation to purchase shares of the Company’s capital stock in connection with the continuation decision. Sanofi’s option to purchase $40.0 million of additional shares of the Company’s redeemable convertible preferred stock at the discounted price expired upon the closing of the Series B redeemable convertible preferred stock financing in April 2015.

The Company had determined that Sanofi’s right to purchase the redeemable convertible preferred stock at the discounted price, and the Company’s corresponding obligation to issue this additional redeemable convertible preferred stock, represented a freestanding financial instrument. The freestanding convertible preferred stock call option liability was initially recorded at its fair value of $0.7 million in 2014. The Company did not have a liability related to the redeemable convertible preferred stock call option on its consolidated balance sheet as of June 30, 2017 and December 31, 2016.

10

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

5. Balance Sheet Components

Property and Equipment

Property and equipment consist of the following (in thousands):

June 30,

2017

December 31,

2016

Scientific equipment

$

5,418

$

4,858

Furniture and equipment

680

546

Capitalized software

276

237

Leasehold improvements

307

308

Total

6,681

5,949

Less: Accumulated depreciation

(3,825

)

(3,191

)

Property and equipment, net

$

2,856

$

2,758

Depreciation expense was $0.3 million and $0.2 million, for the three months ended June 30, 2017 and 2016, respectively, and $0.6 million and $0.5 million, for the six months ended June 30, 2017 and 2016, respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

June 30,

2017

December 31,

2016

Payroll and related expenses

$

2,869

$

3,717

Clinical research and development

6,070

3,981

Other

1,214

992

Total accrued liabilities

$

10,153

$

8,690

6. Commitments and Contingencies

Purchase Commitments

The Company conducts product research and development programs through a combination of internal and collaborative programs that include, among others, arrangements with universities, contract research organizations and clinical research sites. The Company has contractual arrangements with these organizations; however, these contracts are generally cancelable on 30 days’ notice and the obligations under these contracts are largely based on services performed.

Facility Leases

On June 29, 2012, the Company entered into a 66-month lease for approximately 12,000 square feet of office and laboratory space in South San Francisco with annual payments of approximately $0.5 million. In connection with this lease agreement, the Company also entered into a shared facilities and services agreement with Global Blood Therapeutics, Inc. (“GBT”), a co-tenant in the office building. In October 2014, the Company entered into a lease assignment agreement with the owner of the building and GBT to allow GBT to sublease the Company’s portion of the building beginning in March 2015. For the three and six months ended June 30, 2017, the Company recorded approximately $0.1 million and $0.2 million, respectively, of sublease income and $0.1 million and $0.2 million, respectively, of sublease expense, which is recorded in interest and other income, net in the consolidated statements of operations and comprehensive loss. For the three and six months ended June 30, 2016, the Company recorded approximately $0.1 million and $0.2 million, respectively, of sublease income and $0.1 million and $0.2 million, respectively, of sublease expense, which is recorded in interest and other income, net in the consolidated statements of operations and comprehensive loss.

11

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

On September 15, 2014, the Company entered into a five-year lease for approximately 34,400 square feet of office and laboratory space in South San Francisco. The Company may extend the lease for an additional three year term. The initial annual lease payments are $1.3 million, increasing to $1.6 million in the final year of the agreement. The lease period commenced in January 2015. The Company received a lease abatement for the first three months of the lease term, which is recorded as deferred rent and recognized over the lease term.

The Company has provided deposits for letters of credit totaling $0.3 million to secure its obligations under its leases, which have been classified as long-term assets on the Company’s consolidated balance sheet as of June 30, 2017.

Rent expense, net, was $0.4 million and $0.7 million, for each of the three and six months ended June 30, 2017 and 2016, respectively.

Contingencies

From time to time, the Company may have contingent liabilities that arise in the ordinary course of business activities. The Company accrues for such a liability when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual or disclosure as of June 30, 2017, or December 31, 2016.

Guarantees and Indemnifications

The Company enters into standard indemnification arrangements in the ordinary course of business.

Pursuant to certain of these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification arrangements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made.

The Company indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws, and agreements providing for indemnification entered into with its officers and directors. The term of the indemnification period lasts as long as an officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity.

The maximum amount of potential future indemnification of directors and officers is unlimited; however, the Company currently holds director and officer liability insurance. This insurance allows the transfer of risk associated with its exposure and may enable it to recover a portion of any future amounts paid.

The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented.

7. Stockholders’ Equity

Common Stock Reserved for Issuance

The Company has reserved shares of common stock for issuance as follows:

June 30,

2017

December 31,

2016

Options issued and outstanding

3,332,142

2,141,868

Shares available for issuance under 2015 Stock Option and Incentive Plan

797,339

720,921

Shares available for issuance under 2015 Employee Stock Purchase Plan

479,947

202,087

Total

4,609,428

3,064,876

12

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

8. Stock-Based Compensation

The Company classifies stock-based compensation expense in the accompanying condensed consolidated statements of operations and comprehensive loss based on the department to which a recipient belongs. The following table sets forth stock-based compensation expense related to options granted to employees and consultants for all periods presented (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Research and development

$

610

$

247

$

1,200

$

421

General and administrative

731

357

1,546

597

Total

$

1,341

$

604

$

2,746

$

1,018

The following summarizes option activity under the 2012 Equity Incentive Plan and 2015 Stock Option and Incentive Plan:

Shares Subject to

Weighted Average

Outstanding

Options

Exercise Price

Per Share

Balance at December 31, 2016

2,141,868

$

6.42

Options granted

1,340,475

$

12.49

Options exercised

(15,281

)

$

1.66

Options canceled

(134,920

)

$

10.01

Balance at June 30, 2017

3,332,142

$

8.74

Pursuant to the terms of the Company’s 2015 Employee Stock Purchase Plan (the “2015 ESPP”), on April 28, 2017, the Company issued 36,429 shares to participants in the 2015 ESPP in exchange for their contributions during the period from November 1, 2016 to April 28, 2017.

In relation to stock options to purchase common stock that vest upon the achievement of performance criteria, the Company recorded zero and $174,000 in stock-based compensation expense for the three and six months ended June 30, 2017, respectively, and $73,000 for each of the three and six months ended June 30, 2016. The Company begins to recognize expenses related to these options during the period upon concluding that certain performance criteria are considered probable.

9. Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Numerator

Net loss

$

(12,837

)

$

(9,760

)

$

(24,384

)

$

(18,180

)

Net loss attributable to common stockholders, basic and diluted

$

(12,837

)

$

(9,760

)

$

(24,384

)

$

(18,180

)

Denominator

Weighted average shares outstanding

31,446,235

27,023,566

31,437,448

27,024,104

Less: weighted average shares subject to repurchase

(245,462

)

(686,382

)

(286,232

)

(739,474

)

Weighted average shares used to compute basic and diluted net

loss per share

31,200,773

26,337,184

31,151,216

26,284,630

Net loss per share attributable to common stockholders, basic

and diluted

$

(0.41

)

$

(0.37

)

$

(0.78

)

$

(0.69

)

13

MYOKARDIA, INC.

Notes to Condensed Consolidated Financial Statements—(Continued)

(Unaudited)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:

As of June 30, 2017, the Company has contributions from plan participants of $130,000 under the 2015 ESPP, which if converted, would be equivalent to 11,216 shares based on 85% of the stock price at the beginning of the offering period.

10. Related Party Transactions

In September 2012, the Company began receiving consulting and management services pursuant to an unwritten agreement with Third Rock Ventures, which is one of the Company’s largest shareholders. Kevin Starr, a director of the Company, is a partner of Third Rock Ventures. Charles Homcy, a former director who resigned from the Board of Directors in March 2017, is a venture partner of Third Rock Ventures. The consulting fees paid to Third Rock Ventures were incurred by the Company in the ordinary course of business, and were $23,000 and $32,000 for the three and six months ended June 30, 2017, respectively, and $10,000 and $24,000 for the three and six months ended June 30, 2016, respectively. As of June 30, 2017 and December 31, 2016, the Company had an outstanding liability to Third Rock Ventures of $4,000 and $9,000, respectively.

14

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and notes thereto for the year ended December 31, 2016, included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission (SEC) on March 13, 2017 (the “Annual Report”).

Special note regarding forward-looking statements

This report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included under Part II, Item 1A below. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

We are a clinical stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious and neglected rare cardiovascular diseases. Our initial focus is on the treatment of heritable cardiomyopathies, a group of rare, genetically-driven forms of heart failure that result from biomechanical defects in cardiac muscle contraction. We have used our precision medicine platform to generate a robust pipeline of therapeutic programs for the chronic treatment of the two most common forms of heritable cardiomyopathy—hypertrophic cardiomyopathy, or HCM, and dilated cardiomyopathy, or DCM.

We have completed enrollment in a Phase 2 clinical trial of mavacamten (formerly known as MYK-461), our product candidate for the treatment of HCM, and are currently enrolling subjects in a Phase 1 clinical trial of MYK-491, our product candidate for the treatment of DCM. Using our precision medicine development strategy, we believe we have efficiently generated clinical proof of mechanism for mavacamten in both healthy volunteers and in HCM patients, and we intend to pursue a similar path for MYK-491. In 2016, mavacamten was granted Orphan Drug Designation by the U.S. Food and Drug Administration, or the FDA, for the treatment of symptomatic, obstructive hypertrophic cardiomyopathy (oHCM), a subset of HCM.

Financial Overview

We have not generated net income from operations, and, as of June 30, 2017, we had an accumulated deficit of $102.2 million, primarily as a result of research and development and general and administrative expenses.

To date, all of our revenue has been derived from non-refundable payments under the license and collaboration agreement we entered into with Aventis Inc., a wholly-owned subsidiary of Sanofi S.A., in August 2014, which we refer to as the Collaboration Agreement, and we have not yet generated any revenue from product sales. We have never been profitable and have incurred net losses in each year since commencement of our operations. We expect to incur significant and increasing losses from operations for the foreseeable future, and we can provide no assurance that we will ever generate significant revenue or profits.

Through June 30, 2017, we have financed our operations through an IPO, a follow-on public offering, private placements of redeemable convertible preferred stock and funds received in connection with the Collaboration Agreement with Aventis Inc., a wholly-owned subsidiary of Sanofi S.A., entered into in August 2014. Prior to our IPO, we received net proceeds of $93.9 million from the sale of shares of our Series A, A-1 and B redeemable convertible preferred stock. On November 3, 2015, we completed our IPO of 6,253,125 shares of common stock at an offering price of $10.00 per share, resulting in net proceeds of approximately $55.6 million, after deducting underwriting discounts, commissions and offering costs. On October 3, 2016, we completed a follow-on public offering of 4,370,000 shares of common stock at an offering price of $15.00 per share, resulting in net proceeds of approximately $61.1 million, after deducting underwriting discounts, commissions and estimated offering costs. In connection with the Collaboration Agreement, we have received

15

$105.0 million from Sanofi S.A., consisting of a $35.0 million upfront payment, a $25.0 million milestone payment for the submission of an investigational new drug application (“IND”), for MYK-491 with the FDA in November 2016, and a $45.0 million continuation payment from Sanofi in January 2017. As of June 30, 2017, we had cash and cash equivalents of $117.3 million, short-term investments of $16.0 million and long-term investments of $32.0 million, which we believe will be sufficient to fund our planned operations through at least the next twelve months.

We have no manufacturing facilities, and all of our manufacturing activities are contracted out to a third party. Additionally, we currently utilize third-party clinical research organizations (“CROs”) to carry out our clinical development and trials. We do not yet have a sales organization.

We expect to incur substantial expenditures in the foreseeable future for the advancement of our precision medicine platform, the development and potential commercialization of mavacamten and MYK-491, and the discovery, development and potential commercialization of any additional product candidates we may pursue. Specifically, we expect to continue to incur substantial expenses in connection with our ongoing PIONEER-HCM Phase 2 clinical trial of mavacamten and any additional Phase 2 and Phase 3 clinical trials that we may conduct for mavacamten, as well as our ongoing and planned clinical development activities for MYK-491. We will need substantial additional funding to support our operating activities as we advance mavacamten, MYK-491, and other potential product candidates through clinical development, seek regulatory approval and prepare for, and if approved, proceed to commercialization. Adequate funding may not be available to us on acceptable terms, or at all.

The research and development expenses incurred in the development and potential commercialization of mavacamten, MYK-491 and other product candidates are (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

mavacamten

$

7,448

$

4,772

$

12,424

$

9,035

MYK-491

2,521

1,872

5,396

3,586

Other

3,720

2,635

7,786

4,788

Total research and development expenses:

$

13,689

$

9,279

$

25,606

$

17,409

License and Collaboration Agreement with Sanofi

In August 2014, we entered into the Collaboration Agreement with Aventis, Inc., a wholly-owned subsidiary of Sanofi S.A., that covers three main research programs: our first program in HCM (referred to as mavacamten or HCM-1), a second program in HCM (referred to as HCM-2) and our first program in DCM (referred to as MYK-491 or DCM-1). For purposes of this filing, we refer to Sanofi as our co-party to the Collaboration Agreement.

Under the Collaboration Agreement, we are responsible for conducting research and development activities through early human efficacy studies, except for specified research activities to be conducted by Sanofi. Thereafter, we will lead worldwide development and U.S. commercial activities for the mavacamten and HCM-2 programs, Sanofi will lead global development and commercial activities for MYK-491 and Sanofi will lead commercial activities for the mavacamten and HCM-2 programs where it has ex-U.S. commercialization rights. Sanofi also has the option to co-promote the mavacamten and HCM-2 programs in the United States only in the event of a potential expanded cardiovascular disease indication outside of the genetically targeted indications for mavacamten and HCM-2. We have co-commercialization rights to MYK-491 in the United States, at our option.

We are entitled to receive tiered royalties ranging from the mid-single digits to the mid-teens on net sales of certain HCM and DCM finished products outside the United States and on net sales of certain DCM finished products in the United States. Sanofi is eligible to receive tiered royalties ranging from the mid-single digits to the low teens on our net sales of certain HCM finished products in the United States.

16

Under the Collaboration Agreement, Sanofi also agreed to provide up to $200.0 million in upfront and milestone payments, equity investments and research and development support. As of June 30, 2017, of such amount, we have received from Sanofi an initial non-refundable upfront cash payment of $35.0 million and equity investments of $10.0 million in exchange for Series A-1 redeemable convertible preferred stock, and a $25.0 million milestone-based payment. In addition, we have received equity funding outside of the original agreement of $5.0 million in exchange for Series B redeemable convertible preferred stock and $9.0 million in exchange for shares of our common stock in our IPO. In January 2017, we also received a $45.0 million continuation payment. The total payments we were originally eligible to receive also included an obligation from Sanofi to purchase an additional $40.0 million of our capital stock if Sanofi provided notice of its intent to continue the collaboration prior to December 31, 2016. Under the Collaboration Agreement, Sanofi’s obligation to purchase the additional $40.0 million of our capital stock (which was reduced by $5.0 million for its purchase of the Series B redeemable convertible preferred stock) terminated in connection with the closing of our IPO in November 2015. Additionally, we are eligible to receive up to $45.0 million of approved in-kind research and clinical activities.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are more fully described in Note 2 of our Annual Report. We believe that the accounting policies discussed in our Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. There have been no changes to our significant accounting policies during the six months ended June 30, 2017, except with respect to changes in our policy on Stock-Based Compensation. As permitted under ASU 2016-09, we have elected to recognize forfeitures as they occur, and no longer estimate a forfeiture rate when calculating the stock-based compensation for our equity awards.

Components of Operating Results

Collaboration and License Revenue

We generate revenue from the Collaboration Agreement with Sanofi for the development and commercialization of products under the collaboration.

Operating Expense

Research and Development Expenses

Research and development expenses consist of salaries and benefits, including stock-based compensation, lab supplies and facility costs, as well as fees paid to CROs to conduct certain research and development activities on our behalf. Amounts incurred in connection with collaboration and license agreements are also included in research and development expense. Payments made to third parties in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered.

General and Administrative Expenses

General and administrative expenses consist principally of personnel-related costs, professional fees for legal, consulting, audit and tax services, market research, rent and other general operating expenses not otherwise classified as research and development expenses.

Interest and Other Income, Net

Interest and other income, net consists primarily of interest income earned on our cash and cash equivalents.

17

Results of Operations

Comparison of the Three-Month Periods Ended June 30, 2017 and 2016

Three Months Ended

June 30,

Increase

2017

2016

(Decrease)

(in thousands)

Collaboration and license revenue

$

5,625

$

3,549

$

2,076

Operating expenses:

Research and development

13,689

9,279

4,410

General and administrative

5,082

4,056

1,026

Total operating expenses

18,771

13,335

5,436

Loss from operations

(13,146

)

(9,786

)

3,360

Interest and other income, net

309

26

283

Net loss and comprehensive loss

$

(12,837

)

$

(9,760

)

$

3,077

Collaboration and License Revenue

Collaboration and license revenue increased $2.1 million, or 58%, from the $3.5 million during the three months ended June 30, 2016 to $5.6 million for the three months ended June 30, 2017. The amount for the period ended June 30, 2016 relates to revenue we recognized from the initial upfront payment of $35.0 million under the Collaboration Agreement with Sanofi. The amount for the period ended June 30, 2017 relates to revenue we recognized from the continuation payment of $45.0 million under the Collaboration Agreement.

Research and Development Expenses

Research and development expenses increased $4.4 million, or 48%, from $9.3 million for the three months ended June 30, 2016 to $13.7 million for the three months ended June 30, 2017. The increase in research and development expenses was primarily due to a $1.4 million increase in personnel expenses as a result of an increase in employee headcount, a $1.3 million increase in contract research, chemistry and biology expenses on discovery and pre-clinical programs including HCM-2 and a back-up program for DCM-1, a $0.1 million increase in drug manufacturing costs for mavacamten (formerly known as MYK-461) and MYK-491, $1.9 million increase in clinical expenses for mavacamten and MYK-491 clinical trials, and a $0.4 million increase in stock compensation expense.

We expect research and development expenses to increase in future periods as we continue the development of our lead product candidate, mavacamten, in clinical trials as well as preclinical and subsequent clinical activities for our MYK-491, HCM-2, additional mechanisms within DCM, and other back-up programs. As product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, we expect that our research and development expenses will increase substantially in the future.

General and Administrative Expenses

General and administrative expenses increased $1.0 million, or 25%, from $4.1 million for the three months ended June 30, 2016 to $5.1 million for the three months ended June 30, 2017. The increase in general and administrative expenses was primarily due to a $0.1 million increase in personnel expenses as a result of an increase in employee headcount, increases of $0.3 million in office and related expenses, $0.1 million in recruiting expense, and a $0.4 million increase in stock compensation expense as we expanded our operations.

We expect general and administrative expenses to continue to increase in future periods, reflecting both the increased costs in connection with the continued clinical development and potential future commercialization of mavacamten, the ongoing and planned clinical development of MYK-491, as well as an expanded infrastructure and increased professional fees.

Interest and Other Income, Net

Interest and other income increased $283,000 or 1088%, from $26,000 for the three months ended June 30, 2016 to $309,000 for the period ending June 30, 2017. The increase in interest income was primarily due to investments.

18

Comparison of the Six-Month Periods Ended June 30, 2017 and 2016

Six Months Ended

June 30,

Increase

2017

2016

(Decrease)

(in thousands)

Collaboration and license revenue

$

11,250

$

7,099

$

4,151

Operating expenses:

Research and development

25,606

17,409

8,197

General and administrative

10,558

7,916

2,642

Total operating expenses

36,164

25,325

10,839

Loss from operations

(24,914

)

(18,226

)

6,688

Interest and other income, net

530

46

484

Net loss and comprehensive loss

$

(24,384

)

$

(18,180

)

$

6,204

Collaboration and License Revenue

Collaboration and license revenue increased $4.2 million, or 58%, from the $7.1 million during the three months ended June 30, 2016 to $11.3 million for the six months ended June 30, 2017. The amount for the period ended June 30, 2016 relates to revenue we recognized from the initial upfront payment of $35.0 million under the Collaboration Agreement with Sanofi. The amount for the period ended June 30, 2017 relates to revenue we recognized from the continuation payment of $45.0 million under the Collaboration Agreement.

Research and Development Expenses

Research and development expenses increased $8.2 million, or 47%, from $17.4 million for the six months ended June 30, 2016 to $25.6 million for the six months ended June 30, 2017. The increase in research and development expenses was primarily due to a $2.6 million increase in personnel expenses as a result of an increase in employee headcount, a $2.6 million increase in contract research, chemistry and...


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