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Document and Entity Information - shares	12 Months Ended
Document and Entity Information - shares	Dec. 31, 2019	Mar. 23, 2020
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Trading Symbol	VIR
Title of 12(b) Security	Common Stock, $0.0001 par value
Security Exchange Name	NASDAQ
Entity Registrant Name	Vir Biotechnology, Inc.
Entity Central Index Key	0001706431
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		109,799,589
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Document Annual Report	true
Document Transition Report	false
Entity File Number	1-39083
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-2730369
Entity Address, Address Line One	499 Illinois Street, Suite 500
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94158
City Area Code	415
Local Phone Number	906-4324
Documents Incorporated by Reference	Portions of the definitive proxy statement, or the Proxy Statement, for the Registrant’s 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year ended December 31, 2019.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 109,335	$ 47,598
Short-term investments	274,101	50,845
Restricted cash and cash equivalents, current	6,181	10,761
Prepaid expenses and other current assets	13,378	8,579
Total current assets	402,995	117,783
Intangible assets, net	35,694	36,917
Goodwill	16,937	16,937
Property and equipment, net	16,308	12,290
Restricted cash and cash equivalents, noncurrent	7,300	1,003
Long-term investments	24,290
Other assets	8,547	6,666
TOTAL ASSETS	512,071	191,596
CURRENT LIABILITIES:
Accounts payable	5,881	6,473
Accrued liabilities	26,495	14,534
Deferred revenue, current	6,181	8,761
Advanced proceeds from preferred stock financing		10,140
Contingent consideration, current	8,200
Derivative liability	12,449
Total current liabilities	59,206	39,908
Deferred revenue, noncurrent	12,670	6,561
Convertible preferred stock warrant liability		1,024
Contingent consideration, noncurrent	9,380	9,250
Deferred tax liability	3,305	3,305
Other long-term liabilities	3,568	1,588
TOTAL LIABILITIES	88,129	61,636
Commitments and contingencies (Note 8)
Convertible preferred stock, $0.0001 par value; zero and 421,450,000 shares authorized as of December 31, 2019 and 2018, respectively; zero and 69,910,520 shares issued and outstanding as of December 31, 2019 and 2018, respectively; aggregate liquidation preference of zero and $333,058 as of December 31, 2019 and 2018, respectively		309,137
STOCKHOLDERS’ EQUITY (DEFICIT):
Preferred stock, $0.0001 par value; 10,000,000 and zero shares authorized as of December 31, 2019 and 2018, respectively; no shares issued and outstanding as of December 31, 2019 and 2018
Common stock, $0.0001 par value; 300,000,000 and 558,350,000 shares authorized as of December 31, 2019 and 2018, respectively; 107,648,925, and 8,858,799 shares issued and outstanding as of December 31, 2019 and 2018, respectively	11	1
Additional paid-in capital	793,051	14,672
Accumulated other comprehensive loss	(601)	(14)
Accumulated deficit	(368,519)	(193,836)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)	423,942	(179,177)
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)	$ 512,071	$ 191,596

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Convertible preferred stock, par value	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	0	421,450,000
Convertible preferred stock, shares issued	0	69,910,520
Convertible preferred stock, shares outstanding	0	69,910,520
Convertible preferred stock, liquidation	$ 0	$ 333,058
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	558,350,000
Common stock, shares issued	107,648,925	8,858,799
Common stock, shares outstanding	107,648,925	8,858,799

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue:
Total revenue	$ 8,091	$ 10,668	$ 2,708
Operating expenses:
Research and development	148,472	100,229	62,512
General and administrative	37,598	29,131	21,693
Total operating expenses	186,070	129,360	84,205
Loss from operations	(177,979)	(118,692)	(81,497)
Other income (expense):
Interest income	8,511	2,540	638
Other income (expense), net	(5,061)	(212)	83
Total other income (expense)	3,450	2,328	721
Loss before benefit from (provision for) income taxes	(174,529)	(116,364)	(80,776)
Benefit from (provision for) income taxes	(154)	480	10,924
Net loss	$ (174,683)	$ (115,884)	$ (69,852)
Net loss per share, basic and diluted	$ (5.76)	$ (15.12)	$ (32.45)
Weighted-average shares outstanding, basic and diluted	30,349,920	7,666,463	2,152,273
Grant Revenue [Member]
Revenue:
Total revenue	$ 7,380	$ 9,800	$ 2,559
Contract Revenue [Member]
Revenue:
Total revenue	$ 711	$ 868	$ 149

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Net loss	$ (174,683)	$ (115,884)	$ (69,852)
Other comprehensive income (loss):
Unrealized gains (losses) on investments	149	(14)
Adjustment to projected benefit obligations, net of tax	(736)
Other comprehensive income (loss)	(587)	(14)
Comprehensive loss	$ (175,270)	$ (115,898)	$ (69,852)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Convertible Preferred Stock	Series A-1 Convertible Preferred Stock	Series A-2 Convertible Preferred Stock	Series B Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance at Dec. 31, 2016	$ (7,972)						$ 128		$ (8,100)
Beginning balance (in shares) at Dec. 31, 2016		5,555,549
Beginning balance at Dec. 31, 2016		$ 21,242
Beginning balance (in shares) at Dec. 31, 2016						446,108
Issuance of convertible preferred stock, net of issuance cost			$ 271,283
Issuance of convertible preferred stock, net of issuance cost (in Shares)			60,388,881
Issuance of common stock in connection with business acquisition	2,475						2,475
Issuance of common stock in connection with business acquisition (in shares)						1,666,656
Issuance of common stock in connection with acquisition of research and development license	1,651						1,651
Issuance of common stock in connection with acquisition of research and development license (in shares)						1,111,111
Vesting of restricted common stock						$ 1	(1)
Vesting of restricted common stock (in shares)						2,986,450
Stock-based compensation	4,782						4,782
Net loss	(69,852)								(69,852)
Ending balance at Dec. 31, 2017	$ (68,916)					$ 1	9,035		(77,952)
Ending balance (in shares) at Dec. 31, 2017	65,944,430
Ending balance at Dec. 31, 2017	$ 292,525
Ending balance (in shares) at Dec. 31, 2017						6,210,325
Issuance of convertible preferred stock, net of issuance cost			$ 14,269	$ 2,343
Issuance of convertible preferred stock, net of issuance cost (in Shares)			3,222,220	743,870
Vesting of restricted common stock (in shares)						2,247,673
Exercise of stock options	584						584
Exercise of stock option (in shares)						400,801
Stock-based compensation	5,053						5,053
Other comprehensive income (loss)	(14)							$ (14)
Net loss	(115,884)								(115,884)
Ending balance at Dec. 31, 2018	$ (179,177)					$ 1	14,672	(14)	(193,836)
Ending balance (in shares) at Dec. 31, 2018	69,910,520
Ending balance at Dec. 31, 2018	$ 309,137		$ 303,224	$ 5,913
Ending balance (in shares) at Dec. 31, 2018	8,858,799					8,858,799
Issuance of convertible preferred stock, net of issuance cost					$ 327,475
Issuance of convertible preferred stock, net of issuance cost (in Shares)					18,202,213
Conversion of convertible preferred stock into common stock	$ 636,612					$ 9	636,603
Conversion of convertible preferred stock into common (in shares)	(88,112,733)
Conversion of convertible preferred stock into common stock	$ (636,612)
Conversion of convertible preferred stock into common stock (in shares)						88,112,733
Issuance of common stock in connection with initial public offering, net of offering costs of $16,446	126,411					$ 1	126,410
Issuance of common stock in connection with initial public offering, net of offering costs (in shares)						7,142,858
Reclassification of warrant liability to additional paid-in capital	3,073						3,073
Settlement of fractional shares from reverse stock split	(3)						(3)
Issuance of common stock in connection with a license agreement	617						617
Issuance of common stock in connection with a license agreement (in shares)						38,888
Repayment of promissory notes, net of unvested shares	1,355						1,355
Repayment of promissory notes, net of unvested shares (in shares)						1,390,925
Vesting of restricted common stock	476						476
Vesting of restricted common stock (in shares)						1,348,297
Exercise of stock options	1,129						1,129
Exercise of stock option (in shares)						756,425
Stock-based compensation	8,719						8,719
Other comprehensive income (loss)	(587)							(587)
Net loss	(174,683)								(174,683)
Ending balance at Dec. 31, 2019	$ 423,942					$ 11	$ 793,051	$ (601)	$ (368,519)
Ending balance (in shares) at Dec. 31, 2019	0
Ending balance (in shares) at Dec. 31, 2019	107,648,925					107,648,925

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Initial public offering costs	$ 16,446
Series A-1 Convertible Preferred Stock
Convertible preferred stock, net of issuance cost		$ 232	$ 467
Series B Convertible Preferred Stock
Convertible preferred stock, net of issuance cost	$ 165

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (174,683)	$ (115,884)	$ (69,852)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on write-off and disposal of property and equipment	345	198
Depreciation and amortization	3,294	1,618	255
Amortization of intangible assets	1,223	1,138	177
Amortization of premiums (accretion of discounts) on investments, net	(179)	(328)
Change in estimated fair value of contingent consideration	8,330	250	2,750
Initial fair value of derivative liability	13,599
Change in estimated fair value of derivative liability	(1,150)
Change in estimated fair value of convertible preferred stock warrant liability	2,049	95	(82)
Preferred stock issued in connection with asset acquisition		1,750
Common stock issued in connection with license agreement	617		1,651
Change in deferred income taxes		(480)	(10,924)
Stock-based compensation	8,719	5,053	4,782
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(4,619)	(4,172)	(2,600)
Other assets	(1,881)	151	(246)
Accounts payable	964	1,471	2,011
Accrued liabilities and other long-term liabilities	10,211	7,171	4,809
Deferred revenue	3,529	7,873	888
Net cash used in operating activities	(129,632)	(94,096)	(66,381)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(8,940)	(8,192)	(2,742)
Purchases of investments	(643,898)	(123,105)
Maturities of investments	396,680	72,574
Proceeds from sale of property and equipment		25
Asset acquisitions		(1,743)
Business acquisition, net of cash acquired			(27,252)
Net cash used in investing activities	(256,158)	(60,441)	(29,994)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock in initial public offering, net of issuance costs	126,411
Proceeds from issuance of convertible preferred stock, net of issuance costs	317,335	14,254	271,182
Proceeds received from financing obligation	1,202
Cash paid in lieu of fractional shares related to reverse stock split	(3)
Payment of principal on financing lease obligations	(95)
Proceeds from repayment of promissory notes	3,265
Proceeds from exercise of stock options	1,129	584
Advanced proceeds from convertible preferred stock financing		10,140
Net cash provided by financing activities	449,244	24,978	271,182
Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents	63,454	(129,559)	174,807
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period	59,362	188,921	14,114
Cash, cash equivalents and restricted cash and cash equivalents at end of period	122,816	59,362	188,921
NONCASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued in connection with business acquisition			2,475
Contingent consideration recorded in connection with business acquisitions			6,250
Property and equipment purchases included in accounts payable and accrued liabilities	892	1,996	1,885
Issuance costs for convertible preferred stock in accounts payable and accrued liabilities			15
Receipt of promissory note from related parties for purchase of common stock			3,159
Issuance of preferred stock in connection with asset acquisition		593
Conversion of preferred stock into common stock upon completion of initial public offering	636,612
Reclassification of preferred stock warrant liability to additional paid-in capital	3,073
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	109,335	47,598	187,918
Restricted cash and cash equivalents, current	6,181	10,761
Restricted cash and cash equivalents, noncurrent	7,300	1,003	1,003
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$ 122,816	$ 59,362	$ 188,921

Organization

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Organization

1.	Organization

Vir Biotechnology, Inc. (“Vir” or the “Company”) is a clinical-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. The Company’s approach begins with identifying the limitations of the immune system in combating a particular pathogen, the vulnerabilities of that pathogen and the reasons why previous approaches have failed. The Company then brings to bear powerful technologies that the Company believes, individually or in combination, will lead to effective therapies.

Reverse Stock Split

On September 16, 2019, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-4.5 reverse split (“Reverse Split”) of shares of the Company’s common and convertible preferred stock, which was effected on September 27, 2019. The par value per share and authorized shares of common stock and convertible preferred stock were not adjusted as a result of the Reverse Split. All of the share and per share information included in the accompanying consolidated financial statements has been adjusted to reflect the Reverse Split.

Initial Public Offering

On October 10, 2019, the Company completed its initial public offering (“IPO”) of its common stock. In connection with its IPO, the Company issued and sold 7,142,858 shares of its common stock at a price of $20.00 per share. As a result of the IPO, the Company received $126.4 million in net proceeds, after deducting underwriting discounts, commissions and offering expenses. At the closing of the IPO, 88,112,733 shares of outstanding convertible preferred stock were automatically converted into 88,112,733 shares of common stock and a warrant to purchase 244,444 shares of convertible preferred stock was converted into a warrant to purchase 244,444 shares of common stock.

Need for Additional Capital

The Company has incurred net losses since inception and expects such losses to continue over the next several years. At December 31, 2019, the Company had an accumulated deficit of $368.5 million. Management expects to incur additional losses in the future to conduct research and development and recognizes the need to raise additional capital to fully implement its business plan. The Company had $407.7 million of cash, cash equivalents, and investments at December 31, 2019. Based on the Company’s business plans, management believes that its cash, cash equivalents, and short and long-term investments as of December 31, 2019 will be sufficient to meet its obligations for at least the next 12 months from the issuance date of these consolidated financial statements.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.	Summary of Significant Accounting Policies

Basis of Presentation

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The consolidated financial statements include the accounts of Vir and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Monetary assets and liabilities of foreign subsidiaries are translated into U.S. dollars at period-end exchange rates and non-monetary assets and liabilities are translated to U.S. dollars using historical exchange rates. Revenue and expenses are translated at average rates throughout the respective periods. Transaction gains and losses are included in other income (expense), net on the consolidated statements of operations and were immaterial for the years ended December 31, 2019, 2018 and 2017.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Segments

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

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and short and long-term investments. Cash and cash equivalents are deposited in checking and sweep accounts at a financial institution. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments, and issuers of the investments to the extent recorded on the consolidated balance sheets. As of December 31, 2019, the Company has no off-balance sheet concentrations of credit risk.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash and cash equivalents. Cash equivalents, which consist of amounts invested in money market funds, are stated at fair value.

Investments

Investments include available-for-sale securities and are carried at estimated fair value. The Company’s valuations of marketable securities are generally derived from independent pricing services based on quoted prices in active markets for similar securities at period end. Generally, investments with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the consolidated balance sheet date are considered short-term investments, with all others considered to be long-term investments. Unrealized gains and losses deemed temporary in nature are reported as a component of accumulated comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income, on the consolidated statements of operations

The Company’s Swiss subsidiary holds short-term structured deposits which include a feature that provides for the instrument to be settled in U.S. dollars or Swiss Francs (CHF) depending on the strike level set at the onset of the instrument compared to the U.S. dollars to CHF exchange rate at the settlement date. The Company has elected to account for these instruments using the fair value option with gains and losses recognized in earnings.

The Company, through its investment in Brii Biosciences Limited, holds privately held equity securities in which the Company does not have a controlling interest or significant influence. The Company’s investment in Brii Biosciences Limited is recorded at cost and adjusted for impairments and observable price changes with the same or similar security from the same issuer. The valuation of the Company’s investment in Brii Biosciences Limited utilizes significant unobservable inputs or data in an inactive market and the valuation requires the Company’s judgment due to the absence of market prices and inherent lack of liquidity. Additionally, the determination of whether an orderly transaction is for the same or similar investment requires significant management judgment including the nature of the rights and obligations of its investments, the extent to which differences in those rights and obligations would affect the fair values of those investments, and the impact of any differences based on the stage of operational development of the investee. Prior to 2019, the investment in Brii Biosciences was accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. See Note 6—Grant, License and Collaboration Agreements for additional information on the Company’s investment in Brii Biosciences Limited.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents represent money market funds to secure a standby letter of credit and a security deposit with financial institutions, both pursuant to office and laboratory space lease agreements; and a holdback retained by the Company pursuant to the acquisition of Agenovir Corporation (“Agenovir”) in 2018, which was paid to Agenovir in the second quarter of 2019. Additionally, funds received from certain grants are restricted as to their use and are therefore classified as restricted cash and cash equivalents.

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets, generally three to five years. Leasehold improvements are amortized over the lesser of their useful lives or the remaining life of the lease. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. No material impairment losses have been incurred to date.

Acquired Intangible Assets

The Company’s intangible assets were acquired via business combinations or asset acquisitions. Indefinite-lived intangible assets represent the estimated fair value assigned to in-process research and development (“IPR&D”) acquired in a business combination. The Company reviews indefinite-lived intangible assets for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, then it is written down to its adjusted fair value. As of December 31, 2019, there have been no such impairments. For IPR&D, if a product candidate derived from the indefinite-lived intangible asset is developed and commercialized, the useful life will be determined, and the carrying value will be amortized prospectively over that estimated useful life. Alternatively, if a product candidate is abandoned, the carrying value of the intangible asset will be charged to research and development expenses. IPR&D assets acquired as part of an asset acquisition are recorded at cost and expensed immediately if they have no alternative future uses.

Finite-lived intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date. In an asset acquisition, any consideration transferred in excess of the fair value of the assets acquired is allocated to each asset acquired on a relative fair value basis. Amortization is computed using the straight-line method over the estimated useful lives of the respective finite-lived intangible assets, generally three to twelve years. Intangible assets are reviewed for impairment at least annually or more frequently if indicators of potential impairment exist.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and intangible assets acquired in a business combination. The Company tests goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that this asset may be impaired.

Convertible Preferred Stock Warrant Liability

A freestanding warrant to purchase shares of Series A-1 convertible preferred stock at a future date was determined to be a freestanding instrument that was accounted for as a liability. At initial recognition, the Company recorded the convertible preferred stock warrant liability on the consolidated balance sheet at its estimated fair value. The warrant liability was subject to remeasurement at each reporting period, with changes in estimated fair value recognized as a component of other income (expense), net until the exercise of the convertible preferred stock warrant or conversion of such warrant into a warrant to purchase shares of common stock. Upon the completion of the IPO in October 2019, the warrant automatically converted into a warrant to purchase shares of common stock. Therefore, the convertible preferred stock warrant liability was reclassified to additional paid-in capital.

Revenue Recognition

The Company’s revenue primarily consists of research funding received from grants and contract revenue related to research services provided to customers. The Company has not had any product revenue since inception. Additionally, while the Company has entered into various collaboration arrangements, the Company has not recognized any revenue from licenses, milestones or royalties under such agreements.

Grant Revenue

Grants received, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution. An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred. Contributions are recognized as grant revenue when all donor-imposed conditions have been met.

Contract Revenue

In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the Company’s customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation.

For collaborative arrangements that fall within the scope of ASC 808, Collaborative Arrangements (“ASC 808”), the Company applies the revenue recognition model under ASC 606 to part or all of the arrangement, as deemed appropriate. The Company has entered into a number of license and collaboration agreements that fall within the scope of ASC 606. The Company evaluates the promised goods or services in these agreements to determine which ones represent distinct performance obligations. These agreements may include the following types of promised goods or services: (i) grants of licenses, (ii) performance of research and development services, and (iii) participation on joint research and/or development committees. They also may include options to obtain licenses to the Company’s intellectual property.

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. These agreements may include the following types of consideration: non-refundable upfront payments, reimbursement for research services, research, development or regulatory milestone payments, and royalty and commercial sales milestone payments.

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on their estimated standalone selling prices. For performance obligations satisfied over time, the Company estimates the efforts needed to complete the performance obligation and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligation using an input measure.

For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified level of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Achievement of these royalties and commercial milestones may solely depend upon performance of the licensee.

Research and Development Expenses

To date, research and development expenses have related primarily to discovery efforts and preclinical and clinical development of product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Research and development expenses include expenses related to license and collaboration agreements; personnel-related expenses, including salaries, benefits, and stock-based compensation for personnel contributing to research and development activities; expenses incurred under agreements with third-party contract manufacturing organizations, contract research organizations, and consultants; clinical costs, including laboratory supplies and costs related to compliance with regulatory requirements; and other allocated expenses, including expenses for rent, facilities maintenance, and depreciation and amortization.

The Company has and may continue to acquire the rights to develop and commercialize new product candidates from third parties. Upfront payments and research and development milestone payments made in connection with acquired license or product rights are expensed as incurred, provided that they do not relate to a regulatory approval milestone or assets acquired in a business combination. The Company records changes in research and development-based contingent consideration and changes in the estimated fair value of embedded derivatives associated with license agreements as research and development expenses.

Stock-based Compensation

The Company recognizes stock-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date fair value of the awards. The Company calculates the fair value of stock options using the Black-Scholes valuation model. Stock-based compensation is recognized using the straight-line method for awards that vest only upon the employee’s or non-employee’s continued service to the Company. Forfeitures are recognized as they occur.

Acquisitions

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired, including IPR&D projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date in the Company’s consolidated financial statements. Any excess fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with the business combination are recorded at their fair values on the acquisition date and are remeasured each subsequent reporting period until the related contingencies are resolved and are classified as contingent consideration on the consolidated balance sheets.

When the Company determines that assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets. Therefore, the initial cost of acquired IPR&D is expensed, and no goodwill is recorded. Any contingent consideration that meets the definition of an embedded derivative under other applicable GAAP is accounted for at fair value on the acquisition date and are remeasured each subsequent reporting period until the related contingencies are resolved and are classified as contingent consideration on the consolidated balance sheets. Otherwise, such contingent consideration is recognized only when it becomes payable or is paid.

The changes in fair values of contingent consideration related to achievement of various milestones related to product candidates are recorded within research and development expense. Otherwise, the changes in fair values are recorded within other income (expense), net.

Embedded Derivatives

The Company evaluates certain of its financial and business development transactions to determine if embedded components of these contracts meet the definition of a derivative under Topic ASC 815, “Derivatives and Hedging”. In general, embedded derivatives are required to be bifurcated from the host instrument if (i) the embedded feature is not clearly and closely related to the host contract and (ii) the embedded feature, if considered a freestanding instrument, meets the definition of a derivative. The embedded derivatives are reported on the consolidated balance sheets at their estimated fair values. Any change in estimated fair values, as determined at each measurement period, are recorded in the consolidated statements of operations.

Pension Benefits

Accounting for the defined pension benefit plan for the Company’s Swiss subsidiary requires actuarial valuations based on significant assumptions for discount rates and expected long-term rates of return on plan assets. These and other assumptions such as salary growth, retirement, and mortality rates are evaluated and selected based on expectations or actual experience during each remeasurement date. Pension expense could vary within a range of outcomes and have a material effect on reported earnings, projected benefit obligations and future cash funding. Actual results in any given year may differ from those estimated because of economic and other factors. The Company recognizes a liability for the underfunded status of its defined benefit pension plan as a component of other long-term liabilities. Actuarial gains or losses and prior service costs or credits are deferred in accumulated other comprehensive income (loss) and amortized over the remaining service attribution periods of the employees under the corridor method.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating losses and credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all of the tax benefits will not be realized.

The Company’s tax positions are subject to income tax audits. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. The Company evaluates uncertain tax positions on a regular basis. The evaluations are based on several factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of the audit, and effective settlement of audit issues. The provision for income taxes includes the effects of any accruals that the Company believes are appropriate, as well as any related net interest and penalties.

Net Loss Per Share

Basic net loss per common share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per common share is computed by dividing the net loss by the sum of the weighted average number of common shares outstanding during the period plus any potential dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the treasury stock method. Diluted net loss per share is the same as basic net loss per share since the effect of potentially dilutive securities is anti-dilutive.

Recently Adopted Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instrument-Overall (Subtopic 825-10) (“ASU 2016-01”), which requires entities to measure equity instruments at fair value and recognize any changes in fair value within the statement of operations. ASU 2016‑01 also provides a new measurement alternative for equity investments that do not have a readily determinable fair value (cost method investments). These investments are measured at cost, less impairment, adjusted for observable price changes in an orderly market for an identical or similar investment of the same issuer. ASU 2016-01 is effective for the Company for the annual period beginning January 1, 2019, and the interim period beginning January 1, 2020. For the year ended December 31, 2019, the Company adopted ASU 2016-01 and elected to subsequently account for its investment in Brii Biosciences Limited’s ordinary shares at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment in Brii Biosciences Limited. Prior to 2019, the Company’s investment in Brii Biosciences was accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. The adoption of ASU 2016-01 did not have a material impact on the Company’s consolidated financial statements and disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”). Topic 842 requires lessees to recognize all leases, including operating leases, on the balance sheet as a right-of-use asset and lease liability, unless the lease is a short-term lease, defined as having a term of twelve-months or less. In July 2018, the FASB issued supplemental adoption guidance and clarification to Topic 842 within ASU 2018-10 Codification Improvements to Topic 842, Leases and ASU 2018-11, Targeted Improvements—Leases (Topic 842). This update provides an alternative transition method that allows entities to elect to apply the standard as of the beginning of the latest period presented versus retrospectively as of the beginning of the earliest period presented. As an emerging growth company, Topic 842 is effective for the Company for fiscal year beginning after December 15, 2020, and interim periods within fiscal year beginning after December 15, 2021. The Company plans to early adopt the standard on January 1, 2020 using the optional transition method by recognizing a cumulative effect adjustment to the opening balance of accumulated deficit as of that date. Topic 842 provided a number of optional practical expedients in transition. The Company plans to elect the package of practical expedients, which permitted the Company to not reassess, under the new standard, its prior conclusions about lease classification and initial direct costs. The Company estimates the right-of-use assets and lease obligations for its lease portfolio as of January 1, 2020 to be within the range of $16.0 million and $18.3 million, which will be recorded on its consolidated balance sheet.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including the Company’s financial instruments. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will likely result in more timely recognition of credit losses. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). ASU 2019-04 modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis. As an emerging growth company, Topic 326 is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company plans to adopt ASU 2016-13 effective January 1, 2023, and has not yet evaluated the impact of adopting this standard on the consolidated financial statements and disclosures.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the current requirements for testing goodwill for impairment by eliminating the second step of the two-step impairment test to measure the amount of an impairment loss. ASU 2017-04 is effective for the Company’s interim and annual reporting periods beginning after December 31, 2021. Early adoption is permitted. The Company currently plans to adopt ASU 2017-04 on January 1, 2020 and does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”). ASU 2018-14 added, removed and clarified disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 is effective for the Company for fiscal years ending after December 15, 2021. Early adoption is permitted for all entities. The Company currently plans to adopt ASU 2018-14 in fiscal 2022 and is still evaluating the effect that ASU 2018-14 may have on its notes to consolidated financial statements.

In August 2018, the FASB issued ASU 2018‑13, Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes and adds certain disclosure requirements on fair value measurements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU 2018‑13 and delay adoption of the additional disclosures until their effective date. The Company will adopt ASU 2018-13 on January 1, 2020 and does expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements and related disclosures.

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

3.Fair Value Measurements

The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

•

Level 1: Inputs which include quoted prices in active markets for identical assets and liabilities.

•

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Level 3 liabilities consist of contingent consideration, derivative liability and convertible preferred stock warrant liability.

Contingent Consideration

Contingent consideration includes potential milestone payments in connection with the acquisitions of Humabs Biomed SA (“Humabs”) and TomegaVax, Inc. (“TomegaVax”). See further discussion in Note 4—Acquisitions.

The estimated fair value of the contingent consideration related to the Humabs acquisition was determined by calculating the probability-weighted clinical, regulatory and commercial milestone payments based on the assessment of the likelihood and estimated timing that certain milestones would be achieved. As of December 31, 2018, the fair value of the contingent consideration was estimated using discount rates between 16.8% to 20.3%. As of December 31, 2019, the Company applied the same methodology to calculate the fair value of the clinical and regulatory milestones using discount rates between 7.7% to 11.1%. For the commercial milestones, the Company used a Monte Carlo simulation upon the availability of a discrete revenue forecast and the increased likelihood that the clinical trials would commence. The Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecast, an expected revenue volatility of 55%, and a discount rate of 13%. The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. As of December 31, 2019 and 2018, the fair value of the contingent consideration was $14.9 million and $9.3 million, respectively. The increase in the estimated fair value of contingent consideration is primarily due to the lower discount rates; higher probability for achieving certain milestones; and shorter time period over which such milestones are expected to be achieved.

The estimated fair value of an embedded derivative related to the TomegaVax acquisition was determined by using a Monte Carlo simulation model which included estimates of both the probability and timing to achieve the required per share price of the Company’s common stock, expected volatility and discount rate. The fair value of the embedded derivative was estimated using discount rates ranging from 1.6% to 1.7% and volatility of 81%. The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. As of December 31, 2019, the fair value of the contingent consideration was $2.7 million, with changes in the estimated fair value recorded in other income (expense), net in the consolidated statement of operations.

Derivative Liability

The derivative liability relates to the Milestone Shares (as defined in Note 6) in connection with the collaboration and license agreement (the “Alnylam Agreement”) with Alnylam Pharmaceuticals, Inc. (“Alnylam”). See Note 6 – Grant, License and Collaboration Agreements.

The estimated fair value of the derivative liability was calculated based on the estimated probabilities of the likelihood and timing to achieve the development milestone, a discount for lack of marketability, and the fair value of the Milestone Shares using the Company’s closing stock price as of October 11, 2019, the effective date of the IPO, and December 31, 2019. The initial fair value of the embedded derivative was estimated to be $13.6 million and was charged to research and development expense. As of December 31, 2019, the fair value of the derivative liability was $12.4 million.

Convertible Preferred Stock Warrant Liability

In connection with the completion of the Company's IPO in October 2019, all of the outstanding warrants to purchase convertible preferred stock automatically converted into warrants to purchase shares of common stock. As a result, the Company remeasured and reclassified the convertible preferred stock warrant liability to additional paid-in capital. Prior to the IPO, the convertible preferred stock warrant liability was valued using the Black-Scholes option pricing model. The assumptions used to calculate the convertible preferred stock warrant liability as of October 15, 2019, the date immediately before the closing of the IPO, and December 31, 2018 were as follows:

	October 15, 2019			December 31, 2018
Exercise price	$	4.50		$	4.50
Expected term		6.9			7.7
Expected stock price volatility		88.8	%		83.5	%
Risk-free interest rate		1.7	%		2.6	%
Expected dividend yield		—			—

The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:

		December 31, 2019
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
				(in thousands)
Assets:
Money market funds⁽¹⁾	Level 1	$	106,127	$	—	$	—		$	106,127
U.S. government treasuries ⁽²⁾	Level 2		298,256		140		(5	)		298,391
Bank time deposits	Level 2		2,500		—		—			2,500
Total financial assets		$	406,883	$	140	$	(5	)	$	407,018
Liabilities:
Derivative liability	Level 3	$	12,449	$	—	$	—		$	12,449
Contingent consideration	Level 3		17,580		—		—			17,580
Total financial liabilities		$	30,029	$	—	$	—		$	30,029

(1)	Includes $13.5 million of restricted cash equivalents.

(2)	Includes $24.3 million classified as long-term investments.

		December 31, 2018
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds⁽¹⁾	Level 1	$	43,600	$	—	$	—		$	43,600
Structured deposits	Level 2		1,000		—		—			1,000
U.S. government treasuries	Level 2		49,859		—		(14	)		49,845
Total financial assets		$	94,459	$	—	$	(14	)	$	94,445
Liabilities:
Convertible preferred stock warrant liability	Level 3	$	1,024	$	—	$	—		$	1,024
Contingent consideration	Level 3		9,250		—		—			9,250
Total financial liabilities		$	10,274	$	—	$	—		$	10,274

(1)	Includes $11.8 million of restricted cash equivalents.

As of December 31, 2019 and 2018, there were no investments that have been in a continuous unrealized loss position for longer than twelve months. Total unrealized gains, net of $0.1 million and unrealized losses of $14 thousand were recorded in accumulated other comprehensive loss during the years ended December 31, 2019 and 2018, respectively.

As of December 31, 2019, all securities have contractual maturities of less than two years.

The following table sets forth the changes in the estimated fair value of the Company’s Level 3 financial liabilities (in thousands):

	Contingent Consideration		Derivative Liability			Warrant Liability			Total
Balance at December 31, 2018	$	9,250	$	—		$	1,024		$	10,274
Initial fair value		—		13,599			—			13,599
Changes in fair value		8,330		(1,150	)		2,049			9,229
Reclassification of warrant liability to additional paid-in capital upon the IPO		—		—			(3,073	)		(3,073	)
Balance at December 31, 2019	$	17,580	$	12,449		$	—		$	30,029

- 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

Acquisitions

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisitions

4.	Acquisitions

Acquisition of TomegaVax

In September 2016, the Company entered into an agreement and plan of merger (“TomegaVax Merger Agreement”) to acquire all of the equity interests of TomegaVax. The primary asset purchased in the acquisition was an in-process cytomegalovirus (“CMV”) vector-based vaccine platform for use in hepatitis B virus (“HBV”), human immunodeficiency virus (“HIV”), and tuberculosis (“TB”). The acquisition was accounted for as an asset purchase and the Company recorded the cash purchase price of $5.2 million in research and development expenses in 2016. The Company incurred transaction costs of $0.5 million.

In connection with the entry into the TomegaVax Merger Agreement, the Company also entered into a letter agreement with TomegaVax (the “TomegaVax Letter Agreement”), which provides for certain payments to TomegaVax’s former stockholders prior to September 2024, in each case so long as the Company is continuing to pursue the development of the TomegaVax technology. Under the terms of the TomegaVax Letter Agreement, the Company will be required to pay to the former stockholders of TomegaVax milestone payments of up to an aggregate of $30.0 million if the per share price of the Company’s publicly traded common stock, or implied price per share of the Company’s Series A-1 convertible preferred stock (or common stock upon conversion) upon a certain asset sale, merger or stock sale, is at least $45 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization), with the amount of such payments determined by the share price and the stage of the Company’s clinical development at the time of the relevant event triggering the payment. The share price of the Company’s publicly traded common stock will be determined using the average of the daily volume- weighted average trading price of the Company’s common stock for each trading day during a consecutive 90-day period. The foregoing payments are payable (i) during any date after the completion of an initial public offering by the Company or any successor or affiliate controlling the TomegaVax technology, provided that no payment will be due before the first anniversary of the initial public offering, (ii) upon the sale of all assets related to the TomegaVax technology or (iii) upon a merger or stock sale of the Company or any successor or affiliate controlling the TomegaVax technology, in each case subject to certain conditions with respect to the timing of the payments. The payments under the TomegaVax Letter Agreement can be made in cash or shares of the Company’s common stock, at the discretion of the Company’s board of directors. None of the milestones have been achieved as of December 31, 2019.

The Company determined that the future milestone payments contain net settlement provisions and therefore, they were required to be accounted for as embedded derivatives in accordance with the relevant accounting guidance. As of December 31, 2019, the fair value of the embedded derivative was $2.7 million.

Acquisition of Humabs

In August 2017, the Company acquired all of the outstanding equity of Humabs, a private Swiss company which discovers and develops monoclonal antibodies derived from individuals whose immune systems have successfully responded to major diseases. The Company acquired all of Humabs’ rights, title and interest in and to substantially all of the assets of Humabs except for rights under certain license agreements with third-parties. The Company is obligated to pass-through to the former Humabs shareholders any amounts received by Humabs under such license agreements, net of any program expenses. The transaction was accounted for as an acquisition of a business. The estimated fair value of total consideration was $42.3 million at the acquisition date. The consideration paid consisted of $30.0 million in cash and 1,666,656 shares of common stock, valued at $2.5 million as of the date of the transaction, to former Humabs shareholders. The Company also agreed to pay additional amounts in cash upon the achievement of specified milestone events: (i) up to $135.0 million upon the achievement of clinical, regulatory and commercial milestones for an HBV product; and (ii) up to $105.0 million upon the achievement of clinical, regulatory and commercial milestones for another product. The estimated fair value of this contingent consideration was $6.3 million as of the date of acquisition. Payments will vary based on milestones that are reached. The final component of the consideration was acquired net working capital of $3.6 million.

The acquired developed technologies that have associated patents issued are classified as finite-lived intangible assets and are amortized on a straight-lined basis over their estimated remaining useful lives, generally between seven to 12 years. The Company also acquired indefinite-lived intangible assets consisting of in-process research and development. These assets will not be amortized until regulatory approval is obtained in a major market. At that time, the Company will determine the useful life of the asset and begin amortization. If the associated research and development effort is abandoned, the related in-process research and development assets will be written-off and an impairment charge recorded. As of December 31, 2019, there have been no such impairments. The estimated fair value of the intangible assets was determined using the replacement cost method. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. None of the goodwill is expected to be deductible for income tax purposes.

Acquisition of Agenovir

In January 2018, the Company entered into an agreement and plan of merger (the “Agenovir Merger Agreement”) with Agenovir Corporation (“Agenovir”), pursuant to which the Company purchased all equity interests of Agenovir. The primary assets purchased in the acquisition were in-process research and development programs in human papillomavirus (“HPV”) and HBV using CRISPR/Cas9. The Company concluded that the assets acquired and liabilities assumed did not meet the definition of a business as a limited number of inputs were acquired but no substantive processes were acquired. As such, the acquisition was accounted for as an asset purchase.

As purchase consideration, the Company agreed to pay cash of $11.5 million and issued an aggregate of 555,537 shares of Series A-2 convertible preferred stock, valued at $1.8 million on the transaction date, to the former Agenovir stockholders. The Company also assumed certain liabilities of $1.3 million. The estimated fair value of the Company’s Series A-2 convertible preferred stock was $3.15 per share as of the date of the transaction and was determined by management with the assistance of a third-party valuation specialist. The Company retained $2.0 million of the cash consideration as holdback to satisfy claims for indemnification, of which, $1.8 million was paid to Agenovir in April 2019. In addition to the equity, the Company incurred transaction costs of $0.7 million.

The Company allocated the purchase price of $15.3 million between property and equipment of $0.8 million and in-process research and development of $14.5 million, based on the relative fair values of the assets acquired, which was expensed as research and development expenses in the accompanying consolidated statement of operations for the year ended December 31, 2018.

During a specified period following the closing of the Agenovir acquisition, the Company will be required to pay Agenovir’s former stockholders up to $45.0 million in the aggregate for the achievement of specified development and regulatory milestones for the first HBV product, and if the Company elects to progress the HPV program, the Company will owe up to $45.0 million in the aggregate for the achievement of development and regulatory milestones for the first HPV product. In addition, during a specified period following the closing of the Agenovir acquisition, if the Company successfully commercializes one or more products arising from the HBV program or the HPV program, the Company will owe milestone payments for the achievement of specified levels of worldwide annual net sales of up to $90.0 million for products arising from each program, or up to $180.0 million in the aggregate, if the Company were to commercialize products from both the HBV program and the HPV program. The Company terminated the HPV program in February 2020 and no longer has any further obligations related to this program under the Agenovir Merger Agreement.

None of the milestones have been achieved as of December 31, 2019, therefore no amounts were recognized relating to the contingent consideration.

Acquisition of Statera

In February 2018, the Company entered into an agreement and plan of reorganization with Statera Health, LLC (“Statera”), pursuant to which the Company acquired all equity interests of Statera. The Company paid $0.9 million in cash and issued an aggregate of 188,333 shares of Series A-2 Convertible Preferred Stock, valued at $0.6 million on the transaction date, to the former Statera stockholders as purchase consideration. The estimated fair value of the Company’s Series A-2 convertible preferred stock was $3.15 per share as of the date of the transaction and was determined by management with the assistance of a third party valuation specialist. The transaction was accounted for as an asset acquisition. The Company incurred transaction costs of $0.2 million.

The primary asset purchased was a cloud-based predictive analytics platform that translates clinical data into casual hypotheses of disease pathophysiology. The cloud-based predictive analytics platform was accounted for as developed technology and is classified as finite-lived intangible assets and is being amortized on a straight-lined basis over an estimated useful life of three years.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5.	Goodwill and Intangible Assets

Goodwill

Goodwill of $16.9 million represents the excess of the purchase price over the estimated fair value of the net assets acquired from Humabs. The Company tests goodwill for impairment on an annual basis or sooner, if deemed necessary. There was no impairment for the year ended December 31, 2019.

Intangible Assets

The following table summarizes the carrying amount of the Company’s finite-lived intangible assets (in thousands):

	December 31,						Weighted- Average Remaining Useful
	2019			2018			Life (Years)
Developed technology	$	7,000		$	7,000			6.1
Less accumulated amortization		(2,539	)		(1,316	)
Developed technology, net	$	4,461		$	5,684

Finite-lived intangible assets are carried at cost less accumulated amortization. Of the total cost of developed technology, $4.8 million and $2.2 million resulted from the acquisitions of Humabs and Statera, respectively. Amortization expense related to finite-lived intangible assets, included in research and development expenses in the consolidated statement of operations, totaled $1.2 million, $1.1 million and $0.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Based on the finite-lived intangible assets recorded as of December 31, 2019, the estimated future amortization expense for the next five years is as follows (in thousands):

Year Ending December 31:
2020	$	1,223
2021		584
2022		499
2023		499
2024		226
Total	$	3,031

Indefinite-Lived Intangible Assets

As of December 31, 2019, the Company had indefinite-lived intangible assets of $31.2 million related to the purchased IPR&D from the Humabs acquisition. No impairment losses have been recorded for the years ended December 31, 2019 and 2018.

Grant, License and Collaboration Agreements

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Grant, License and Collaboration Agreements

6.	Grant, License and Collaboration Agreements

The Company is a party to various grant and customer contract agreements. Descriptions of the material agreements are included below.

Bill & Melinda Gates Foundation Grants

Campylo/EPEC/EAEC Grant

As part of the Company’s acquisition of Humabs in August 2017, the Company acquired a grant agreement with the Bill & Melinda Gates Foundation pursuant to which it was awarded a grant totaling up to $4.7 million (the “2017 Grant”). The 2017 Grant supported the Company’s discovery, characterization and selection of human monoclonal antibodies with pre-clinical efficacy against three enteric pathogens responsible for life-threatening diarrhea in neonates. The 2017 Grant expired on May 31, 2019.

Payments received in advance that were related to future research activities were deferred and recognized as revenue when the donor-imposed conditions were met, which was as the research and development activities were performed. The Company recognized grant revenue of $0.9 million, $2.0 million and $0.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Human Immunodeficiency Virus (“HIV”) Grant

On January 26, 2018, the Company entered into a grant agreement with the Bill & Melinda Gates Foundation pursuant to which it was awarded a grant totaling up to $12.2 million for its HIV program (the “HIV Grant”). The HIV Grant will remain in effect until June 30, 2020, unless earlier terminated by the Bill & Melinda Gates Foundation for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the Bill & Melinda Gates Foundation reasonably believes may threaten the success of the project. In February 2020, the parties amended the HIV Grant. See Note 17 – Subsequent Events for further discussion.

Payments received in advance that are related to future research activities are deferred and recognized as revenue when the donor-imposed conditions are met, which is as the research and development activities are performed. The Company recognized grant revenue of $3.7 million and $4.4 million for the years ended December 31, 2019 and 2018, respectively.

Tuberculosis (“TB”) Grant

On March 16, 2018, the Company entered into a grant agreement with the Bill & Melinda Gates Foundation pursuant to which it was awarded a grant totaling up to $14.9 million for its TB program (the “TB Grant”). The TB Grant will remain in effect until June 30, 2020, unless earlier terminated by the Bill & Melinda Gates Foundation for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the Bill & Melinda Gates Foundation reasonably believes may threaten the success of the project. The Company anticipates extending the term of the TB Grant by another year.

Payments received in advance that are related to future research activities are deferred and recognized as revenue when the donor-imposed conditions are met, which is as the research and development activities are performed. The Company recognized grant revenue of $1.9 million and $2.3 million for the years ended December 31, 2019 and 2018, respectively.

National Institutes of Health

As part of the Company’s acquisition of TomegaVax in September 2016, the Company acquired grant agreements related to TomegaVax’s research effort in infectious diseases and cancer that entitled them to several awards under the Small Business Innovation Research Program from the National Institutes of Health (“NIH”). Through December 31, 2019, the Company has acquired or been awarded grants from NIH totaling $5.1 million. These grants are cost plus fixed fee agreements in which the Company is reimbursed for its direct and indirect costs. Only costs that are allowable under certain government regulations and NIH’s supplemental policy and procedure manual may be claimed for reimbursement, subject to government audit.

The Company recognized grant revenue of $0.9 million, $1.1 million and $1.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Brii Biosciences

In May 2018, the Company entered into an option and license agreement (the “Brii Agreement”) with Brii Biosciences Limited (previously named BiiG Therapeutics Limited) (“Brii Bio Parent”) and Brii Biosciences Offshore Limited (“Brii Bio”), pursuant to which the Company granted to Brii Bio, with respect to up to four of the Company’s programs, an exclusive option to obtain exclusive rights to develop and commercialize compounds and products arising from such programs in China, Taiwan, Hong Kong and Macau (collectively, the “China Territory”) for the treatment, palliation, diagnosis, prevention or cure of acute and chronic diseases of infectious pathogen origin or hosted by pathogen infection (the “Field of Use”). The Company’s HBV siRNA program being developed under the Alnylam Agreement (described below) is included within the Brii Agreement as a program for which Brii Bio may exercise one of its options. In partial consideration for the options granted by the Company to Brii Bio, Brii Bio Parent and Brii Bio granted the Company, with respect to up to four of Brii Bio Parent’s or Brii Bio’s programs, an exclusive option to be granted exclusive rights to develop and commercialize compounds and products arising from such Brii Bio programs in the United States for the Field of Use. The number of options that the Company may exercise for a Brii Bio program is limited to the corresponding number of options that Brii Bio exercises for a Vir program. As of December 31, 2019, and 2018, no license option had been exercised.

As partial consideration for the Company’s entry into the Brii Agreement, upon closing of Brii Bio Parent’s Series A preferred stock financing, the Company received ordinary shares equal to 9.9% of the outstanding shares in Brii Bio Parent. As a result of Brii Bio’s right to exercise one of its options for the Company’s HBV siRNA program, under the terms of the Alnylam Agreement, as amended, the Company will transfer to Alnylam a specified percentage of such equity consideration allocable to such program. The Company also received an option to purchase additional ordinary shares of Brii Bio Parent at a purchase price of $0.0001 per share in connection with additional Series A preferred stock issuances by Brii Bio Parent and an option to acquire shares of Brii Bio Parent’s Series B preferred stock (“Series B Closing Option”) upon the occurrence of a Series B financing at the same purchase price paid by the other Series B investors. In December 2019, Brii Bio Parent completed its initial Series B preferred stock financing. However, the Company did not exercise its Series B Closing Option and the option expired.

With respect to programs for which Brii Bio exercises its options, Brii Bio will be required to pay the Company an option exercise fee for each such Vir program ranging from the mid-single-digit millions up to $20.0 million, determined based on the commercial potential of the licensed program. Brii Bio will also be required to pay regulatory milestone payments on a licensed product-by-licensed product basis ranging from the mid-single-digit millions up to $30.0 million, also determined based on the commercial potential of such program. Following commercialization, Brii Bio will be required to make sales milestone payments based on certain specified levels of aggregate annual net sales of products arising from each licensed program in the China Territory, up to an aggregate of $175.0 million per licensed program. Brii Bio also will pay royalties to the Company that range from the mid-teens to the high-twenties, as described below.

Upon exercise of each option for a Brii Bio program, the Company will be required to pay to Brii Bio an option exercise fee ranging from the low tens of millions to up to $50.0 million, determined based on the commercial potential of the licensed program. The Company will be required to make regulatory milestone payments to Brii Bio on a licensed product-by-licensed product basis ranging from the low tens of millions up to $100.0 million, also determined based on the commercial potential of such program. The Company will also be required to make sales milestone payments based on certain specified levels of aggregate annual net sales of products in the United States arising from each licensed program, up to an aggregate of $175.0 million per licensed program.

In addition, the Company is obligated under the Brii Agreement to pay Brii Bio tiered royalties based on net sales of products arising from the licensed programs in the United States, and Brii Bio is obligated to pay the Company tiered royalties based on net sales of products arising from the licensed programs in the China Territory. The rates of royalties payable by the Company to Brii Bio, and by Brii Bio to the Company, on net sales range from mid-teens to high-twenties. Each party’s obligations to pay royalties expires, on a product-by-product and territory-by-territory basis, on the latest of 10 years after the first commercial sale of such licensed product in the United States or China Territory, as applicable; the expiration or abandonment of licensed patent rights that cover such product in the United States or China Territory, as applicable; and the expiration of regulatory exclusivity in the United States or the China Territory, as applicable. Royalty rates are subject to specified reductions and offsets.

The Brii Agreement will remain in force until expiration of all options or, if any option is exercised, expiration of all royalty payment obligations for all licensed products within such licensed program, unless terminated in its entirety or on a program-by-program basis by either party. Each party may terminate for convenience all rights and obligations with respect to any program for which it has an option, with 30 days’ written notice (if the terminating party has not exercised an option for such program) or 180 days’ notice (following the exercise of an option for such program). The Brii Agreement may also be terminated by either party for insolvency of the other party, and either party may terminate the Brii Agreement in its entirety or on a program-by-program basis for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice following failure to make payment).

The Company has determined that Brii Bio Parent and its wholly owned subsidiary Brii Bio are variable interest entities due to their reliance on future financing and having insufficient equity at risk. However, the Company does not have the power to direct activities which most significantly impact the economic success of these entities and is not considered the primary beneficiary of these entities. Therefore, the Company does not consolidate Brii Bio Parent or Brii Bio. The Company also determined that it does not exercise significant influence over Brii Bio Parent or Brii Bio. The investment in Brii Bio Parent was recorded at its initial estimated fair value of $6.6 million and was subsequently accounted for under the cost method. The Company also recorded a contract liability of $6.6 million within deferred revenue which represents deferred consideration for the four options that the Company granted to Brii Bio. The deferred consideration will be recognized when Brii Bio exercises its options or the options expire. In 2019, the Company adopted ASU 2016-01 and elected to account for its investment in Brii Bio Parent’s ordinary shares at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment in Brii Bio Parent. As of December 31, 2019 and 2018, the carrying value of the investment in Brii Bio is $6.6 million, which is included in other assets on the consolidated balance sheets. There were no identical or similar investment transactions in Brii Biosciences that would require any changes to the carrying value of the Company’s investment as of December 31, 2019.

The Company’s maximum exposure to loss under the Brii Agreement is represented by options to acquire licenses to develop and commercialize potential products and future milestone payments. The ultimate expense that the Company incurs under the Brii Agreement cannot be quantified at this time as the amount will vary based on the timing and outcome of research activities.

Alnylam

In October 2017, the Company entered into the Alnylam Agreement for the development of siRNA products for the treatment of HBV and following the exercise of certain program options, the development and commercialization of siRNA therapeutic products directed to up to four other infectious disease targets selected by the Company. The technology licensed under the Alnylam Agreement forms the basis of the Company’s siRNA technology platform.

Pursuant to the Alnylam Agreement, the Company obtained a worldwide, exclusive license to develop, manufacture and commercialize the HBV siRNA product candidates, including VIR-2218, for all uses and purposes other than agricultural, horticultural, forestry, aquaculture and other residential applications, such excluded fields, the Excluded Fields. In addition, Alnylam granted us an exclusive option, for each of the infectious disease siRNA programs directed to the Company’s selected targets, to obtain a worldwide, exclusive license to develop, manufacture and commercialize siRNA products directed to the target of each such program for all uses and purposes other than the Excluded Fields. On a product-by-product basis for each product arising from the HBV and, following the Company’s option exercise, the infectious disease programs, Alnylam has an exclusive option, exercisable during a specified period prior to the initiation of a Phase 3 clinical trial for each such product, to negotiate and enter into a profit-sharing agreement for such product.

The Company and Alnylam are jointly responsible for funding the initial research and development activities for VIR-2218 through completion of proof of concept studies. Prior to the exercise of the Company’s option for each siRNA program directed to one of the Company’s selected infectious disease targets, Alnylam is responsible for conducting all development activities, at the Company’s expense, in accordance with an agreed upon development plan. Following the Company’s exercise of an option for a program and payment of the program option exercise fee and any outstanding program costs due to Alnylam, the Company is solely responsible, at the Company’s expense (subject to Alnylam’s exercise of a profit-sharing option), for conducting all development, manufacture and commercialization activities for products arising from each such program. If Alnylam exercises a profit-sharing option for a product, the Company will negotiate the terms of such profit-sharing agreement, which will include sharing equally with Alnylam all subsequent costs associated with the development of such product, as well as the profits and losses in connection with such product, subject to reimbursement by Alnylam of a portion of specified development costs in certain circumstances.

Pursuant to the Alnylam Agreement, the Company paid Alnylam an upfront fee of $10.0 million and issued to Alnylam 1,111,111 shares of the Company’s common stock. Both the upfront fee and the estimated fair value of the common stock were recognized as research and development expenses in 2017. Additionally, the receipt of consideration from Brii Bio as discussed above triggered a requirement under the Alnylam Agreement to transfer a portion of the consideration, consisting of equity in Brii Bio, to Alnylam. Accordingly, the Company recognized a liability of $0.8 million as of December 31, 2018 and a corresponding charge to research and development expenses. The liability of $0.8 million remained outstanding as of December 31, 2019.

Upon the achievement of a certain development milestone, the Company will also issue shares of the Company’s common stock equal to the lesser of (i) 1,111,111 shares or (ii) a certain number of shares based on the Company’s stock price at the time such milestone is achieved (the “Milestone Shares”). The Company will be required to pay Alnylam up to $190.0 million in the aggregate for the achievement of specified development and regulatory milestones by the first siRNA product directed to HBV, and up to $115.0 million for the achievement of specified development and regulatory milestones by the first product directed to the target of each infectious disease siRNA program for which the Company exercised its option. Following commercialization, the Company will be required to pay to Alnylam up to $250.0 million in the aggregate for the achievement of specified levels of net sales by siRNA products directed to HBV and up to $100.0 million for the achievement of specified levels of net sales by products directed to the target of each infectious disease siRNA program for which the Company exercised its option. The Company may also be required to pay Alnylam tiered royalties at percentages ranging from the low double-digits to mid-teens on annual net sales of HBV products, and tiered royalties at percentages ranging from the high single-digits to the sub-teen double-digits on annual net sales of licensed infectious disease products, in each case subject to specified reductions and offsets. The royalties are payable on a product-by-product and country-by-country basis until the later of the expiration of all valid claims of specified patents covering such product in such country and 10 years after the first commercial sale of such product in such country. No such liabilities have been recorded as of December 31, 2019.

The term of the Alnylam Agreement will continue, on a product-by-product and country-by-country basis, until expiration of all royalty payment obligations under the Alnylam Agreement. If the Company does not exercise its option for an infectious disease program directed to one of its selected targets, the Alnylam Agreement will expire upon the expiration of the applicable option period with respect to such program. However, if Alnylam exercises its profit-sharing option for any product, the term of the Alnylam Agreement will continue until the expiration of the profit-sharing arrangement for such product. The Company may terminate the Alnylam Agreement on a program-by-program basis or in its entirety for any reason on 90 days’ written notice. Either party may terminate the agreement for cause for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice for payment breach), or if the other party challenges the validity or enforceability of any patent licensed to it under the Alnylam Agreement on 30 days’ notice.

In February 2020, the Company completed the transfer of a portion of its equity in Brii Bio to Alnylam. In addition, in March 2020, the Company and Alnylam executed an amendment to the Alnylam Agreement. See Note 17 – Subsequent Events for further discussion.

At inception of the Alnylam Agreement, the Milestone Shares did not meet the net settlement criteria to be accounted for as an embedded derivative. Therefore, there was no liability recorded from the inception of the Alnylam Agreement through September 30, 2019. Upon completion of the Company’s IPO in October 2019, the net settlement criteria of the definition of an embedded derivative had been met for the Milestone Shares. The initial fair value of the embedded derivative was estimated to be $13.6 million and was charged to research and development expense. The estimated fair value of the derivative liability was $12.4 million as of December 31, 2019.

The Company incurred $18.1 million, $8.3 million and $1.1 million of expenses for the joint funding of development activities for the proof of concept study under the Alnylam Agreement during the years ended December 31, 2019, 2018 and 2017, respectively.

Visterra

In August 2017, the Company entered into a collaboration, license and option agreement (the “Visterra Agreement”) with Visterra, Inc. (“Visterra”) to license Visterra’s proprietary technology and to research, develop, and commercialize certain product candidates. Under the Visterra Agreement, the Company paid an upfront fee of $25.0 million, which was recognized as research and development expenses in 2017. The Company incurred $2.6 million and $0.9 million for the research and development activities under the Visterra Agreement during the years ended December 31, 2018 and 2017, respectively. No expense was incurred under the Visterra Agreement during the year ended December 31, 2019. In July 2019, the Company notified Visterra of its intention to terminate the Visterra Agreement and return the rights to Visterra. The termination became effective in November 2019.

Rockefeller University

In July 2018, the Company entered into an exclusive license agreement with The Rockefeller University (“Rockefeller”), which was amended in May 2019 (the “Rockefeller Agreement”). Pursuant to the Rockefeller Agreement, Rockefeller granted the Company a worldwide exclusive license under certain patent rights, and a worldwide non-exclusive license under certain materials and know-how covering certain antibody variants relating to a specified mutation leading to enhanced antibody function and utility, to develop, manufacture and commercialize infectious disease products covered by the licensed patents, or that involve the use or incorporation of the licensed materials and know-how, in each case for all uses and purposes for infectious diseases. The Company uses technology licensed under the Rockefeller Agreement in the Company’s antibody platform and in the Company’s product candidate VIR-3434.

The Company paid Rockefeller an upfront fee of $0.3 million for entry into the Rockefeller Agreement, and is required to pay annual license maintenance fees of $1.0 million, which will be creditable against royalties following commercialization. In addition, for achievement of specified development and regulatory milestone events, the Company will be required to pay up to $8.5 million with respect to the first infectious disease product for the HIV indication, up to $7.0 million with respect to each of the first four other infectious disease products with specified projected peak worldwide annual net sales, and up to $3.6 million with respect to any other infectious disease product. Following regulatory approval, the Company will be required to pay commercial success milestones of up to $40.0 million in the aggregate for the achievement of specified aggregate worldwide annual net sales of the first infectious disease product for the HIV indication and the first four infectious disease products with specified projected peak worldwide annual net sales. The Company will also be required to pay to Rockefeller a royalty at a low single-digit percentage rate on net sales of licensed products, subject to certain adjustments. The Company’s obligation to pay royalties to Rockefeller will terminate, on a product-by-product and jurisdiction-by-jurisdiction basis, upon the latest of the expiration of the last valid claim of a licensed patent in such jurisdiction, the expiration of all regulatory exclusivity in such jurisdiction or 12 years following the first commercial sale of the applicable licensed product in such jurisdiction. The Company recognized $1.0 million of annual license maintenance fee as research and development expense for the year ended December 31, 2019.

The Rockefeller Agreement will remain in force, absent earlier termination, until the expiration of all of the Company’s obligations to pay royalties to Rockefeller in all jurisdictions. The Company has the right to terminate the Rockefeller Agreement in its entirety, or in part, for any reason on 60 days’ written notice to Rockefeller. Rockefeller may terminate the Rockefeller Agreement on 90 days’ written notice for the Company’s uncured material breach, or if the Company challenges the validity or enforceability of any of the licensed patents, or immediately in the event of the Company’s insolvency. Rockefeller may also terminate the Rockefeller Agreement if the Company ceases to carry on business with respect to the rights granted to the Company under the agreement.

MedImmune

In September 2018, the Company entered into a license agreement (“2018 MedImmune Agreement”) with MedImmune, Inc. (“MedImmune”), pursuant to which the Company obtained a worldwide, exclusive license to develop and commercialize half-life extended versions of two specified antibodies under development by MedImmune that target influenza A and influenza B, respectively, for all uses in humans and animals. The Company is developing VIR-2482 using technology licensed under the 2018 MedImmune Agreement.

In consideration for the grant of the licenses under the 2018 MedImmune Agreement, the Company made an upfront payment to MedImmune of $10.0 million. The upfront fee was recognized as research and development expenses in the third quarter of 2018.

The Company will be obligated to make development, regulatory, and commercial milestone payments of up to $343.3 million in the aggregate relating to influenza A and influenza B products. MedImmune will also be entitled to receive tiered royalties based on net sales of products containing half-life extended versions of antibodies directed to influenza A and/or influenza B at percentages ranging from the mid-single-digits to sub-teen double-digits.

The 2018 MedImmune Agreement will remain in force until the expiration on a country-by-country and product-by-product basis of all of the Company’s obligations to pay royalties to MedImmune. The Company may terminate the 2018 MedImmune Agreement in its entirety or on a product-by-product basis, for convenience, upon 120 days’ notice. Either party may terminate the 2018 MedImmune Agreement for cause for the other party’s uncured material breach on 60 days’ notice or immediately in the event of bankruptcy of the other party. Additionally, MedImmune may terminate the 2018 MedImmune Agreement for cause on 30 days’ written notice if the Company challenges the validity or enforceability of the patents to which the Company has obtained a license under the 2018 MedImmune Agreement.

In August 2019, the Company achieved one of the specified development milestones relating to influenza A pursuant to the 2018 MedImmune Agreement. As such, the Company paid $5.0 million related to this milestone event in September 2019. The milestone payment was expensed to research and development.

Xencor

In August 2019, the Company entered into a patent license agreement (the “Xencor Agreement”) with Xencor, Inc., (“Xencor”). Pursuant to the Xencor Agreement, the Company obtained a non-exclusive, sublicensable (only to its affiliates and subcontractors) license to incorporate Xencor’s half-life extension Fc region-related technologies into, and to evaluate, antibodies that target influenza A and HBV, and a worldwide, non-exclusive, sublicensable license to develop and commercialize products containing such antibodies incorporating such technologies for all uses, including the treatment, palliation, diagnosis and prevention of human or animal diseases, disorders or conditions. The Company is obligated to use commercially reasonable efforts to develop and commercialize an antibody product that incorporates Xencor’s half-life extension Fc-related technologies, for each of the influenza A and HBV research programs. These technologies are used in the Company’s VIR-2482 and VIR-3434 product candidates.

In consideration for the grant of the license, the Company paid Xencor an upfront fee. For each of the influenza A and HBV research programs, the Company will be required to pay Xencor development and regulatory milestone payments of up to $17.8 million in the aggregate, and commercial sales milestone payments of up to $60.0 million in the aggregate, for a total of up to $77.8 million in aggregate milestones for each program and $155.5 million in aggregate milestones for both programs. On a product-by-product basis, the Company will also be obligated to pay tiered royalties based on net sales of licensed products in the low single-digits. The royalties are payable, on a product-by-product and country-by-country basis, until the expiration of the last to expire valid claim in the licensed patents covering such product in such country.

The Xencor Agreement will remain in force, on a product-by-product and country-by-country basis, until expiration of all royalty payment obligations under the Xencor Agreement. The Company may terminate the Xencor Agreement in its entirety, or on a target-by-target basis, for convenience upon 60 days’ written notice. Either party may terminate the Xencor Agreement for the other party’s uncured material breach upon 60 days’ written notice (or 30 days in the case of non-payment) or in the event of bankruptcy of the other party immediately upon written notice. Xencor may terminate the Xencor Agreement immediately upon written notice if the Company challenges, or upon 30 days’ written notice if any of the Company’s sublicensees challenge, the validity or enforceability of any patent licensed to the Company under the Xencor Agreement.

In August 2019, the Company achieved one of the specified development milestones pursuant to the Xencor Agreement. As such, the Company paid $0.8 million related to the upfront fee and this milestone event in September 2019. The total payment was expensed to research and development.

Balance Sheet Components

12 Months Ended

Dec. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

7.	Balance Sheet Components

Property and Equipment, net

Property and equipment, net consists of the following:

	December 31,
	2019			2018
	(in thousands)
Lab equipment	$	11,986		$	7,538
Computer equipment		540			518
Furniture and fixtures		1,351			943
Leasehold improvements		7,121			3,114
Construction in progress		142			1,893
Property and equipment, gross		21,140			14,006
Less accumulated depreciation and amortization		(4,832	)		(1,716	)
Total property and equipment, net	$	16,308		$	12,290

Depreciation and amortization expenses were $3.3 million, $1.6 million and $0.3 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Sale-Leaseback Transaction

In August 2019, the Company entered into a lease agreement whereby the Company sold various laboratory instruments, furniture, and other equipment for gross proceeds of $1.2 million to a bank and leased them back for a five-year term, collateralized by the underlying equipment. The Company determined it did not relinquish control of the assets to the buyer-lessor. Therefore, the Company accounted for the transaction as a failed sale-leaseback whereby the Company continues to depreciate the assets and recorded a financing obligation for the consideration received from the buyer-lessor. As of December 31, 2019, the current and long-term portions of the financing obligation were $0.2 million and $0.9 million, respectively. The current and long-term portions of the financing obligation are included within accrued liabilities and other long-term liabilities, respectively.

Accrued Liabilities

Accrued liabilities consist of the following:

	December 31,
	2019		2018
	(in thousands)
Payroll and related expenses	$	9,410	$	6,165
Research and development expenses		12,530		5,016
Restricted stock liability		1,434		—
Financing lease obligation, current		237		—
Other professional and consulting expenses		1,634		694
Other accrued expenses		1,250		2,659
Total accrued liabilities	$	26,495	$	14,534

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8.	Commitments and Contingencies

Facility Leases

The Company has various lease arrangements for office and laboratory space located in California, Oregon, Missouri and Switzerland with contractual lease periods expiring between 2020 and 2028. The lease agreements also provide the Company with the option to renew for additional periods ranging from one to five years. In addition, the Company entered into a sale-leaseback transaction in August 2019. See further discussion in Note 7—Balance Sheet Components.

Rent expense is recognized on a straight-line basis over the terms of the operating leases accordingly and the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability.

The following are the aggregate non-cancelable future minimum lease payments under operating and financing leases as of December 31, 2019 (in thousands):

Year Ending December 31:
2020	$	4,525
2021		4,145
2022		4,206
2023		4,250
2024 and thereafter		4,005
Total	$	21,131

Rent expense for the years ended December 31, 2019, 2018 and 2017 were $4.4 million, $4.0 million and $2.6 million, respectively.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the Company’s consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows.

Related Party Transactions

12 Months Ended

Dec. 31, 2019

Related Party Transactions

9.	Related Party Transactions

In January 2017, the Company issued a promissory note to an executive officer and a promissory note to a director for an aggregate principal amount of $3.1 million with an interest rate of 1.97% per annum. Principal and interest under these notes were due the earlier of (i) December 31, 2025 or (ii) in an event of default. The entire principal amount was used to purchase 3,624,355 shares of restricted stock. The outstanding balance of these notes was $3.2 million as of December 31, 2018. In August 2019, in accordance with the terms of the notes, the Company received $3.3 million as repayment of the outstanding promissory notes and accrued interest. As the promissory notes were non-recourse in nature, they were accounted for as in-substance stock options. See further discussion in Note 12—Stock-Based Awards.

As a result of the Brii Agreement in May 2018, the Company holds a minority equity interest in Brii Bio through its parent company, Brii Bio Parent. Additionally, the Company’s Chief Executive Officer and member of the board of directors as well as another member of the Company’s board of directors serve on Brii Bio Parent’s board of directors.

In January 2019, the Company issued 18,202,213 shares of Series B convertible preferred stock to existing Series A-1 preferred stockholders. See further discussion in Note 10—Convertible Preferred Stock.

Convertible Preferred Stock

12 Months Ended

Dec. 31, 2019

Temporary Equity Disclosure [Abstract]

Convertible Preferred Stock

10.	Convertible Preferred Stock

Prior to the IPO, under the Company’s amended and restated certificate of incorporation, the Company was authorized to issue two classes of shares: preferred stock and common stock. The preferred stock was issued in series.

In August 2017, the Series A-1 and B Preferred Stock Purchase Agreement was amended and restated (the “A&R Series A-1 and B Purchase Agreement”), pursuant to which the Company sold an aggregate of 25,843,330 shares of Series A-1 convertible preferred stock at $4.50 per share for gross proceeds of $116.3 million in five closings: (i) 21,111,110 shares in two closings in August 2017; (ii) 3,968,270 shares in two closings in September 2017; and (iii) 763,950 shares in October 2017.

In June 2018, the A&R Series A-1 and B Purchase Agreement was amended (as amended, the “Amended A&R Series A-1 and B Purchase Agreement”), pursuant to which the Company sold an aggregate of 3,222,220 shares of Series A-1 convertible preferred stock at $4.50 per share for gross proceeds of $14.5 million in three closings (the “Additional Closings”): (i) 2,777,776 shares in two closings in June 2018; and (ii) 444,444 shares in July 2018. Pursuant to the Amended A&R Series A-1 and B Purchase Agreement, after the Additional Closings, the Company was authorized to sell up to 1,111,121 additional shares of Series A-1 convertible preferred stock in one or more additional closings.

In January 2019, pursuant to the Amended A&R Series A-1 and B Purchase Agreement, the Company sold an aggregate of 18,202,213 shares of Series B convertible preferred stock at $18.00 per share for gross proceeds of $327.5 million in two closings (the “Series B Closing”). The Company was authorized to sell up to 4,020,009 additional shares of Series B convertible preferred stock in one or more additional closings.

Upon closing of the IPO, all of the outstanding convertible preferred stock automatically converted into 88,112,733 shares of common stock. Subsequent to the closing of the IPO, there were no shares of convertible preferred stock outstanding.

At December 31, 2018, convertible preferred stock consisted of the following (in thousands, except share and per share amounts):

	2018
	Shares Authorized		Shares Issued and Outstanding		Issuance Price per Share		Carrying Value		Liquidation Preference
Series A-1		310,350,000		67,611,100	$	4.50	$	303,224	$	322,100
Series A-2		11,100,000		2,299,420	$	2.57		5,913		10,958
Series B