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Redeemable Convertible Preferred Stock and Common Stock | 12 Months Ended
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Dec. 31, 2019
Equity [Abstract] |
Redeemable Convertible Preferred Stock and Common Stock | Redeemable Convertible Preferred Stock and Common Stock On February 28, 2018 and May 7, 2018, the Board of Directors approved an amendment to our Certificate of Incorporation resulting in a total of 775,000,000 shares of common stock and a total of 509,352,795 shares of redeemable convertible preferred stock being authorized, respectively. Upon completion of our IPO, our authorized capital stock consists of 1,600,000,000 shares of common stock, par value $0.0001 per share, and 162,000,000 shares of preferred stock, par value $0.0001 per share, all of which shares of preferred stock are undesignated. On December 11, 2018, we completed our IPO, whereby we sold 26,275,993 shares of common stock at a price of $23.00 per share. The aggregate net proceeds received by us from the IPO were $563.0 million, net of underwriting discounts and commissions of $33.2 million and offering expenses of $8.1 million payable by us. Upon the closing of the IPO, all of the outstanding shares of our redeemable convertible preferred stock were converted into 236,012,913 shares of the common stock. As of December 31, 2019 and 2018, we did not have any convertible preferred stock issued or outstanding. Each share of Common Stock is entitled to one vote. The holders of Common Stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to all the rights, powers and preferences of the undesignated preferred stock. Our redeemable convertible preferred stock on the day immediately prior to the closing of our IPO, or December 11, 2018, and December 31, 2017 consisted of the following (in thousands, except share amounts):
|  | Redeemable Convertible Preferred Shares Authorized |  | Redeemable Convertible Preferred Shares Issued and Outstanding |  | Carrying Value |  | Liquidation Preference As of December 11, 2018
Series A redeemable convertible preferred stock |  | 42,000,000 |  |  | 42,000,000 |  |  | $ | 182 |  |  | $ | 2,859 |
Series B redeemable convertible preferred stock |  | 122,296,280 |  |  | 122,296,280 |  |  | 770 |  |  | 12,493 |
Series C redeemable convertible preferred stock |  | 85,669,774 |  |  | 85,669,774 |  |  | 36,238 |  |  | 41,750 |
Series D redeemable convertible preferred stock |  | 63,291,156 |  |  | 63,021,976 |  |  | 163,355 |  |  | 188,840 |
Series E redeemable convertible preferred stock |  | 81,428,340 |  |  | 80,884,240 |  |  | 498,525 |  |  | 498,814 |
Series F redeemable convertible preferred stock |  | 54,001,241 |  |  | 54,001,241 |  |  | 473,532 |  |  | 474,131 |
Series G redeemable convertible preferred stock |  | 55,666,004 |  |  | 55,666,004 |  |  | 549,413 |  |  | 560,000 |
Series H redeemable convertible preferred stock |  | 5,000,000 |  |  | 5,000,000 |  |  | 111,546 |  |  | 125,000 |
Balance at December 11, 2018 |  | 509,352,795 |  |  | 508,539,515 |  |  | $ | 1,833,561 |  |  | $ | 1,903,887 |
|  | Redeemable Convertible Preferred Shares Authorized |  | Redeemable Convertible Preferred Shares Issued and Outstanding |  |  |  | Liquidation Preference As of December 31, 2017
|  |  |  | Carrying Value |
Series A redeemable convertible preferred stock |  | 42,000,000 |  |  | 42,000,000 |  |  | $ | 182 |  |  | $ | 2,701 |
Series B redeemable convertible preferred stock |  | 122,296,280 |  |  | 122,296,280 |  |  | 770 |  |  | 11,801 |
Series C redeemable convertible preferred stock |  | 85,669,774 |  |  | 85,669,774 |  |  | 36,238 |  |  | 39,676 |
Series D redeemable convertible preferred stock |  | 63,291,156 |  |  | 63,291,156 |  |  | 164,059 |  |  | 179,462 |
Series E redeemable convertible preferred stock |  | 81,428,340 |  |  | 81,428,340 |  |  | 501,880 |  |  | 502,169 |
Series F redeemable convertible preferred stock |  | 54,001,241 |  |  | 54,001,241 |  |  | 473,532 |  |  | 474,131 |
Balance at December 31, 2017 |  | 448,686,791 |  |  | 448,686,791 |  |  | $ | 1,176,661 |  |  | $ | 1,209,940 |
Redeemable Convertible Preferred Stock We determined the exchange of common units, Series A, B, C, D and E redeemable convertible preferred units, incentive units, restricted stock units, and unit options upon the 2016 Reorganization was a modification of such units. Accordingly, the Series A, B, C, D and E redeemable convertible preferred stock were recorded at their historical carrying values, including previously accrued cumulative dividends, on the effective date of the 2016 Reorganization. Contemporaneous with the 2016 Reorganization, we entered into a preferred stock purchase agreement which authorized the sale and issuance of up to 68,337,129 shares of our Series F redeemable convertible preferred stock at a purchase price of $8.78 per share. We completed a financing in August 2016 which resulted in the issuance of an aggregate of 54,001,241 shares of Series F redeemable convertible preferred stock at an issuance price of $8.78 per share for gross proceeds of $474.1 million, less issuance costs of approximately $0.6 million. In February 2018 and May 2018, we completed additional preferred stock financings which resulted in the issuance of 55,666,004 shares of Series G redeemable convertible preferred stock and 5,000,000 shares of Series H redeemable convertible preferred stock, respectively. Series G redeemable convertible preferred stock was issued at a purchase price of $10.06 per share for gross proceeds of $560.0 million, less issuance costs of $10.5 million. Series H redeemable convertible preferred stock was issued at a purchase price of $25.00 per share for gross proceeds of $112.0 million, less issuance costs of $0.4 million. The Series H preferred stock is not convertible at the option of the holder until after February 7, 2020, after which, it will be convertible into common stock on a one-for-1.14 basis because the applicable original issuance price for such series is $25.00 and the initial applicable conversion price is $21.93 (adjusted for the reverse stock split). The initial carrying amount of the Series H redeemable convertible preferred stock was recorded at its fair value of $22.39 per share, which we determined based in part on an independent third-party valuation contemporaneously performed. The difference between the purchase price and the fair value of Series H redeemable convertible preferred stock was determined to be the premium associated with the Merck PCV/SAV Agreement entered in conjunction with the Series H issuance and recorded to deferred revenue of $13.0 million (Note 3). In September 2018, we repurchased 269,180 shares of our Series D redeemable convertible preferred stock and 544,100 shares of our Series E redeemable convertible preferred stock for an aggregate purchase price of $8.2 million. The repurchase was recorded as a decrease of carrying value of preferred stock and the excess of the purchase price paid to an existing shareholder over the carrying amount of redeemable convertible preferred stock surrendered was recorded to additional paid-in capital. The following table summarizes the activity for each series of our outstanding redeemable convertible preferred stock for the year ended December 31, 2018 (in thousands, except share data):
| Series A Redeemable Convertible Preferred Stock |  | Series B Redeemable Convertible Preferred Stock |  | Series C Redeemable Convertible Preferred Stock |  | Series D Redeemable Convertible Preferred Stock |  | Series E Redeemable Convertible Preferred Stock |  | Series F Redeemable Convertible Preferred Stock |  | Series G Redeemable Convertible Preferred Stock |  | Series H Redeemable Convertible Preferred Stock |  | Total Redeemable Convertible Preferred Stock
| Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount
Balance at December 31, 2017 | 42,000,000 |  |  | $ | 182 |  |  | 122,296,280 |  |  | $ | 770 |  |  | 85,669,774 |  |  | $ | 36,238 |  |  | 63,291,156 |  |  | $ | 164,059 |  |  | 81,428,340 |  |  | $ | 501,880 |  |  | 54,001,241 |  |  | $ | 473,532 |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | 448,686,791 |  |  | $ | 1,176,661 |
Issuance of Series G redeemable convertible preferred stock, net of issuance costs of $10,517 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 55,666,004 |  |  | 549,413 |  |  | — |  |  | — |  |  | 55,666,004 |  |  | 549,413 |
Issuance of Series H redeemable convertible preferred stock, net of issuance costs of $474 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,000,000 |  |  | 111,546 |  |  | 5,000,000 |  |  | 111,546 |
Repurchase of Series D redeemable convertible preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (269,180 | ) |  | (704 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (269,180 | ) |  | (704 | )
Repurchase of Series E redeemable convertible preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (544,100 | ) |  | (3,355 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (544,100 | ) |  | (3,355 | )
Conversion of redeemable convertible preferred stock | (42,000,000 | ) |  | (182 | ) |  | (122,296,280 | ) |  | (770 | ) |  | (85,669,774 | ) |  | (36,238 | ) |  | (63,021,976 | ) |  | (163,355 | ) |  | (80,884,240 | ) |  | (498,525 | ) |  | (54,001,241 | ) |  | (473,532 | ) |  | (55,666,004 | ) |  | (549,413 | ) |  | (5,000,000 | ) |  | (111,546 | ) |  | (508,539,515 | ) |  | (1,833,561 | )
Balance at December 31, 2018 | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Prior to the conversion of the redeemable convertible preferred stock into the common stock upon the closing of the IPO in December 2018, the holders of the redeemable convertible preferred stock had the following rights: Voting Rights The holders of redeemable convertible preferred stock were entitled to vote on all matters and had the number of votes equal to the number of shares of common stock into which the shares of redeemable convertible preferred stock were convertible. Certain directors comprising the Board of Directors were elected by majority vote of holders of redeemable convertible preferred stock. A majority vote of the holders of redeemable convertible preferred stock was required to liquidate or dissolve the Company, amend the Certificate of Incorporation or Bylaws, reclassify common stock or establish another class of capital stock, create shares that would rank senior to or authorize additional shares of redeemable convertible preferred stock, declare a dividend or make a distribution, change the authorized number of directors constituting the Board of Directors, or establish a new employee stock option plan. Dividends Dividends were cumulative and accrued annually, whether or not declared, and whether or not there were net profits available to pay dividends. The holders of Series A redeemable convertible preferred stock, Series B redeemable convertible preferred stock, Series C redeemable convertible preferred stock and Series D redeemable convertible preferred stock were entitled to dividends, at a rate per share, per annum, of $0.004, $0.006, $0.02568, and $0.171, respectively. The holders of the Series E redeemable convertible preferred stock, Series F redeemable convertible preferred stock, Series G redeemable convertible preferred stock and Series H redeemable convertible preferred stock were not entitled to dividends with respect to such shares. All accrued dividends on the redeemable convertible preferred stock were forfeited, as a result of the conversion to common stock, in connection with the closing of our IPO on December 11, 2018. Liquidation Preference The holders of the redeemable convertible preferred stock had preferences in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, as defined in the Third Amended and Restated Certificate of Incorporation. The preferences are set forth below:
i. | first, to the holders of Series H redeemable convertible preferred stock and Series G redeemable convertible preferred stock, on a pari passu basis, an amount equal to the greater of (a) each respective original issue price plus dividends declared but unpaid or (b) such amount that would be payable had all respective shares been converted to common stock;
ii. | next, to the holders of the Series F redeemable convertible preferred stock an amount equal to the greater of (a) the original issue price plus dividends declared but unpaid or (b) such amount that would be payable had all respective shares been converted to common stock;
iii. | next, to the holders of the Series E redeemable convertible preferred stock an amount equal to the greater of (a) the original issue price plus dividends declared but unpaid or (b) such amount that would be payable had all respective shares been converted to common stock;
iv. | next, to the holders of the Series C redeemable convertible preferred stock an amount equal to the greater of (a) the original issue price plus the Series C redeemable convertible preferred stock dividends accrued but unpaid or (b) such amount that would be payable had all respective shares been converted to common stock;
v. | next, pari passu, in relation to the holders of the Series A redeemable convertible preferred stock an amount equal to the greater of (a) the original issue price plus the Series A redeemable convertible preferred stock dividends accrued but unpaid or (b) such amount that would be payable had all respective shares been converted to common stock and in relation to the holders of the Series B redeemable convertible preferred stock an amount equal to the greater of (a) the original issue price plus the Series B redeemable convertible preferred stock dividends accrued but unpaid or (b) such amount that would be payable had all respective shares been converted to common stock;
vi. | next, to the holders of the Series D redeemable convertible preferred stock an amount equal to the Series D redeemable convertible preferred stock dividends accrued but unpaid; and
vii. | finally, to all holders of common stock, pro rata based on the number of shares held by each such holder.
Redemption Pursuant to the Third Amended and Restated Certificate of Incorporation as of May 7, 2018 the redeemable convertible preferred stock did not have any redemption rights that were at the election of the holder. However, the redeemable convertible preferred stock was entitled to payment upon the occurrence of certain contingent events. As it relates to the payment upon the occurrence of a contingent event, we evaluated the redeemable convertible preferred stock in accordance with the guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480), and determined that the payment of liquidation amounts due upon the occurrence of a contingent event was not solely within our control and accordingly the redeemable convertible preferred stock was classified in temporary equity in the consolidated balance sheet. As it relates to the accretion to redemption value, the redeemable convertible preferred stock was not then redeemable, nor was it probable that the instrument would become redeemable, as it was only redeemable upon the occurrence of a contingent event. Accordingly, no accretion was recognized for the redeemable convertible preferred stock and it would not have been accreted until it was probable that the shares would become redeemable. At December 31, 2017, the occurrence of the contingent events was not considered probable. Conversion Each share of Series A redeemable convertible preferred stock, Series B redeemable convertible preferred stock, Series C redeemable convertible preferred stock, Series D redeemable convertible preferred stock, Series E redeemable convertible preferred stock, Series F redeemable convertible preferred stock, and Series G redeemable convertible preferred stock was convertible at the option of the holder, at any time, into the number of shares of fully paid and non-assessable shares of common stock determined by dividing the applicable original issue price for such series of redeemable convertible preferred stock by the applicable conversion price then in effect for such series. The applicable conversion price was initially $0.11, $0.17, $0.70, $4.65, $13.45, $19.14, and $21.93 per share (as adjusted for the reverse stock split), for the Series A redeemable convertible preferred stock, Series B redeemable convertible preferred stock, Series C redeemable convertible preferred stock, Series D redeemable convertible preferred stock, Series E redeemable convertible preferred stock, Series F redeemable convertible preferred stock, and Series G redeemable convertible preferred stock, respectively. In the case of Series H redeemable convertible preferred stock, shares were not convertible at the option of the holder until the date that was twenty-one months following the date of filing of the Third Amended and Restated Certificate of Incorporation, February 7, 2020, after which, shares were convertible at the option of the holder with an applicable conversion price of $21.93 per share, consistent with the mechanics of conversion for the other series of redeemable convertible preferred stock (as adjusted for the reverse stock split). Each applicable conversion ratio would have been adjusted, if applicable, at the time of conversion of a share of redeemable convertible preferred stock into common stock. The adjustment contemplated cash distributions made to holders of the redeemable convertible preferred stock through the date of conversion by decreasing the number of shares of common stock into which the redeemable convertible preferred stock converted by an amount equal to the distributions divided by the fair value of the common stock at the time of conversion. All outstanding shares of redeemable convertible preferred stock were automatically converted into fully paid and non-assessable shares of common stock at the applicable conversion ratio then in effect upon: (i) the date and time, or the occurrence of an event, specified by vote or written consent of the requisite vote; (ii) the closing of a public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, as approved by the Board of Directors; or (iii) the date and time, or occurrence of an event, specified by vote or written consent of the holders of a majority or two-thirds (as applicable) of the then outstanding shares of the associated series of redeemable convertible preferred stock (applicable on a series-by-series basis). In the case of Series H redeemable convertible preferred stock, in the event of an automatic conversion prior to the twenty-one-month anniversary, shares converted at (a) in the case of an IPO, a 10% discount to the price per share of common stock sold pursuant to this Annual Report on Form 10-K; provided that such discounted price was no lower than $21.93 or (b) in the case of a liquidation, dissolution, winding up or deemed liquidation event, a 10% discount to the price per share payable to the holders of common stock; provided that such discounted price was no lower than $21.93. Common stock Holders of common stock are entitled to one vote per share and are entitled to receive dividends, if and when declared by our Board of Directors. In the event of liquidation, holders of common stock share ratably in our assets legally available for distribution to our shareholders. Holders of common stock have no preemptive, subscription, redemption or conversion rights.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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