View Filing Data

General and administrative

^[1]

$ 1,088

$ 3,582

$ 2,446

$ 6,285

Operating expenses:

Research and development

^[2]

25,633

17,120

45,152

31,925

12,741

7,768

21,577

16,410

Total operating expenses

38,374

24,888

66,729

48,335

Loss from equity method investment

(37,286)

(21,306)

(64,283)

(42,050)

Other (expense):

(1,153)

(505)

(2,244)

(951)

Other income (expense), net

155

(161)

(167)

Total other (expense), net

(998)

(666)

(2,215)

(1,118)

Provision for income taxes

(38,284)

(21,972)

(66,498)

(43,168)

(96)

(343)

(182)

(622)

Foreign currency translation adjustment

(38,380)

(22,315)

(66,680)

(43,790)

(21)

(9)

Reconciliation of net loss to net loss attributable to common shareholders:

(38,401)

(22,309)

(66,689)

(43,760)

Net loss per share attributable to common shareholders—basic and diluted

$ (38,380)

$ (22,315)

$ (66,680)

$ (43,790)

$ (0.82)

$ (0.56)

$ (1.44)

$ (1.10)

Weighted-average common shares outstanding used in net loss per share attributable to common shareholders—basic and diluted

46,842,316

39,895,938

46,362,538

39,811,412

[1]	Including the following revenue from a related party, see Note 10:
[2]	Including the following research and development expense with a related party, see Note 10:

Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Revenue from related party	$ 881	$ 1,475	$ 1,963	$ 2,639
Research and development expense with a related party	$ 1,246	$ 1,355	$ 2,352	$ 2,491

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating activities:
Net loss	$ (66,680)	$ (43,790)
Reconciliation of net loss to net cash and restricted cash used in operating activities:
Depreciation and amortization	1,691	1,426
Equity-based compensation	13,906	7,026
Unrealized foreign currency remeasurement loss		(9)
Loss from equity method investment	2,244	951
Other income, non-cash	(169)
Changes in:
Accounts receivable	1,682	(3,657)
Prepaid expenses and other assets	(3,804)	(736)
Accounts payable and accrued expenses	3,764	(2,103)
Deferred revenue	(244)	1,586
Deferred rent	(381)	(355)
Other liabilities, net	88	278
Net cash and restricted cash (used in) operating activities	(47,903)	(39,383)
Investing activities:
Purchase of property and equipment	(1,078)	(4,615)
Net cash and restricted cash (used in) investing activities	(1,078)	(4,615)
Financing activities:
Proceeds from issuance of common shares in secondary offering, net of issuance	122,597
Proceeds from exercise of options	6,433	715
Repurchase of treasury shares	(50)
Net cash provided by financing activities	128,980	715
Effect of exchange rate changes on cash	(9)	31
Increase (decrease) in cash and restricted cash	79,990	(43,252)
Cash and restricted cash, beginning of period	242,912	318,670
Cash and restricted cash, end of period	322,902	275,418
Supplemental disclosure of non-cash investing and financing activities
Property and equipment purchases in accounts payable and accrued expenses	$ 125	$ 2,697

Organization and Operations	6 Months Ended
Organization and Operations	Jun. 30, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Operations	1. Organization and Operations The Company CRISPR Therapeutics AG (“CRISPR” or the “Company”) was formed on October 28, 2013 in Basel, Switzerland. The Company was established to translate CRISPR/Cas9, a genome editing technology, into transformative gene-based medicines for the treatment of serious human diseases. The foundational intellectual property underlying the Company’s operations was licensed to the Company and its subsidiaries in April 2014. The Company devotes substantially all of its efforts to product research and development activities, initial market development and raising capital. The Company’s principal offices are in Zug, Switzerland and operations are in Cambridge, Massachusetts. The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products. The Company had an accumulated deficit of $193.3 million as of June 30, 2018 and has financed its operations to date from proceeds obtained from its IPO, a subsequent offering of its common shares in January 2018, a series of preferred shares and convertible loan issuances, and upfront fees received under its collaboration and joint venture arrangements. The Company will require substantial additional capital to fund its research and development and ongoing operating expenses. Liquidity In January 2018, the Company completed an offering of 5,750,000 common shares, which were sold at a price to the public of $22.75 per share. This offering resulted in $122.6 million of net proceeds to the Company. The Company expects its cash of $319.7 million at June 30, 2018 to be sufficient to fund its current operating plan through at least the next 24 months. Thereafter, the Company will be required to obtain additional funding. There can be no assurances, however, that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all. Unaudited Interim Financial Information The condensed consolidated financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “Annual Report”)..

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies”, in the Annual Report. Significant changes to the Company’s accounting policies as a result of adopting ASC 606 are discussed below:

Revenue Recognition

In May 2014, the Financing Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which supersedes existing revenue recognition guidance. The Company adopted ASU 2014-09 and its related amendments (collectively known as “ASC 606”) on January 1, 2018 using the modified retrospective method, by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of equity at January 1, 2018. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition (“ASC 605”). The Company has elected a practical expedient and applied ASC 606 only to contracts that are not completed at the date of initial application.

ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company’s revenue is from collaboration agreements. Within collaboration agreements, a counterparty may be a collaborator or partner that shares in the risks and benefits of developing a product to be marketed. These arrangements generally are in the scope of ASC 808, Collaborative Arrangements (“ASC 808”) yet may also contain vendor-customer aspects. Therefore, the Company considers all of the facts and circumstances to determine which transactions have a vendor-customer relationship that is subject to ASC 606. At the inception of each agreement the Company must determine which promised goods and services are under the scope of ASC 606 versus ASC 808 (discussed in the Collaborative Arrangements note below).

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services. To achieve this core principle, the Company applies the following five steps:

1) Identify the contract with the customer

A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

2) Identify the performance obligations in the contract

Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, the Company must apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation.

3) Determine the transaction price

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes. Determining the transaction price requires significant judgment, which is discussed in further detail for each of the Company’s contracts with customers in Note 6.

4) Allocate the transaction price to performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. The consideration to be received is allocated among the separate performance obligations based on relative standalone selling prices.

5) Recognize revenue when or as the Company satisfies a performance obligation

The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized over time if either 1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, 2) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. Examples of control are using the asset to produce goods or services, enhance the value of other assets, settle liabilities, and holding or selling the asset. ASC 606 requires the Company to select a single revenue recognition method for the performance obligation that faithfully depicts the Company’s performance in transferring control of the goods and services. The guidance allows entities to choose between two methods to measure progress toward complete satisfaction of a performance obligation:

Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units of produced or units delivered); and

Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation.

The Company has the right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (i.e. R&D services), as such the Company has elected a practical expedient to recognize revenue in the amount to which the entity has a right to invoice for such services.

The terms of the Company’s collaboration and license agreements contain multiple promised goods and services, which include options to license CRISPR/Cas9-based therapeutic products directed to specific targets, referred to as co-exclusive or exclusive licenses, joint steering committee participation, as well as research and development activities to be performed by the Company on behalf of the collaboration partner related to the licensed targets. Payments that the Company may receive under these agreements include nonrefundable upfront fees, payments for research activities, payments based upon the achievement of specified milestones and royalties on any resulting net product sales.

To date, the Company’s only source of revenue has been the collaboration and license and joint development and commercialization agreement with Vertex Pharmaceuticals, Incorporated (“Vertex”) as well as research and development services provided to Casebia Therapeutics LLP (“Casebia”) under the joint venture with Bayer HealthCare LLC (“Bayer”). Please refer to Note 6 for the specific accounting treatment and revenue recognized during the period for each of these arrangements.

Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company must consider the nature of the intellectual property to which the customer will have rights (i.e. access at a point in time or benefit of intellectual property enhancements over time). The Company recognizes revenue from non-refundable, up-front fees allocated to the license at a point in time/over the period the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments for promised goods and services, the Company evaluates the circumstances of whether the milestones will be reached and estimates the amount to be included in the transaction price that will not cause a significant revenue reversal. The Company will evaluate these types of payments for customer options once those options have been exercised. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company will use the most likely amount method for development and regulatory milestone payments. Management believes the most likely amount method is the better predictor as the Company expects to be entitled to only one of two possible amounts. Additionally, management believes that the most likely amount of milestone consideration is its stated amount. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. The transaction price is then allocated to performance obligations on a specific basis or on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates whether it is probable that a significant revenue reversal will not occur in future periods, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, 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).

Up-front payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

Contract Balances

The Company recognizes a contract asset when the Company transfers goods or services to a customer before the customer pays consideration or before payment is due, excluding any amounts presented as a receivable (i.e. accounts receivable). A contract asset is an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer. The contract liabilities (i.e. deferred revenue) primarily relate to contracts where we have received payment but we have not yet satisfied the related performance obligations. The advance consideration received from customers for R&D services or licenses bundled with other promises is a contract liability, recorded as deferred revenue, until the underlying performance obligations are transferred to the customer. The change in deferred revenue from December 31, 2017 to June 30, 2018 is primarily related to the transition adjustment upon the adoption of ASC 606.

Costs to Obtain and Fulfill a Contract with Customer

The Company recognizes an asset related to incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The Company will recognize an asset from costs incurred to fulfill a contract only if such costs relate directly to a contract that the entity can specifically identify, the costs generate or enhance resources of the Company that will be used in satisfying performance obligations in the future, and the costs are expected to be recovered. Any assets recognized related to costs to obtain or fulfill a contract are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates.

Income Taxes

The adoption of ASC 606 resulted in a reduction of revenue as of January 1, 2018, which in turn generated additional deferred tax assets. As the Company fully reserves its net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606, this impact was offset by a corresponding change to the valuation allowance.

Impact of Adopting ASC 606 on the Financial Statements

The Company adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. The Company elected to apply a practical expedient to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:

	As Reported December 31, 2017			ASC 606 Adjustment			Adjusted January 1, 2018
Consolidated Balance Sheet Data (in thousands):
Other current liabilities	$	137		$	102		$	239
Total current liabilities	$	14,511		$	102		$	14,613
Deferred revenue	$	56,928		$	1,046		$	57,974
Total liabilities	$	83,514		$	1,148		$	84,662
Accumulated deficit	$	(125,440	)	$	(1,148	)	$	(126,588	)
Total shareholders' equity	$	187,832		$	(1,148	)	$	186,684
Total liabilities and shareholders’ equity	$	271,346		$	-		$	271,346

Impact of New Revenue Guidance on Financial Statement Line Items

The following table compares the reported condensed consolidated balance sheet, statement of operations and cash flows, as of and for the three and six months ended June 30, 2018, to the pro-forma amounts had the previous guidance been in effect:

	As of June 30, 2018
	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Consolidated Balance Sheet Data (in thousands):
Other current liabilities	$	226		$	(102	)	(5)	$	124
Total current liabilities	$	18,481		$	(102	)	(5)	$	18,379
Deferred revenue	$	57,832		$	(851	)	(1)(2)(3)(5)	$	56,981
Total liabilities	$	87,976		$	(953	)	(1)(2)(3)(5)	$	87,023
Accumulated deficit	$	(193,268	)	$	953		(1)(2)(3)	$	(192,315	)
Total shareholders' equity	$	265,154		$	953		(1)(2)(3)	$	266,107
Total liabilities and shareholders’ equity	$	353,130		$	—		(1)(2)(3)	$	353,130

	Three Months Ended June 30, 2018
Consolidated Statement of Operations Data (in thousands):	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Collaboration revenue	$	1,088		$	(94	)	(2)(3)	$	994
Loss from operations	$	(37,286	)	$	(94	)	(2)(3)	$	(37,380	)
Net loss before income taxes	$	(38,284	)	$	(94	)	(2)(3)	$	(38,378	)
Net loss	$	(38,380	)	$	(94	)	(2)(3)	$	(38,474	)
Comprehensive loss	$	(38,401	)	$	(94	)	(2)(3)	$	(38,495	)

	Six Months Ended June 30, 2018
Consolidated Statement of Operations Data (in thousands):	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Collaboration revenue	$	2,446		$	(195	)	(2)(3)	$	2,251
Loss from operations	$	(64,283	)	$	(195	)	(2)(3)	$	(64,478	)
Net loss before income taxes	$	(66,498	)	$	(195	)	(2)(3)	$	(66,693	)
Net loss	$	(66,680	)	$	(195	)	(2)(3)	$	(66,875	)
Comprehensive loss	$	(66,689	)	$	(195	)	(2)(3)	$	(66,884	)

Consolidated Statement of Cash Flows (in thousands):
Operating activities:
Net loss	$	(66,680	)	$	(195	)	(2)(3)	$	(66,875	)
Reconciliation of net loss to net cash and restricted cash used in operating activities:
Changes in:
Deferred revenue	$	(244	)	$	297		(1)(2)(3)(4)(5)	$	53
Other liabilities, net	$	88		$	(102	)	(1)(2)(3)(4)(5)	$	(14	)
Net cash and restricted cash used in operating activities		#N/A		$	—		(1)(2)(3)(4)(5)		#N/A
Increase (decrease) in cash and restricted cash	$	79,990		$	—		(1)(2)(3)(4)(5)	$	79,990
Cash and restricted cash, end of period	$	322,902		$	—		(1)(2)(3)(4)(5)	$	322,902

(1)

Adjustment of $1,148 to reverse the ASC 606 transition adjustment from retained earnings and deferred revenue.

(2)

Adjustment of $68 and $144 for the three and six months ended June 30, 2018, related to R&D services that would be deferred under ASC 605 versus recognized as invoiced under ASC 606.

(3)

Adjustment of $26 and $51 for the three and six months ended June 30, 2018, related to non-exclusive research license revenue that would be recognized upon option exercise under ASC 605 versus recognized overtime under ASC 606.

(4)

Adjustment to reverse the ASC 606 transition adjustment to retained earnings and deferred revenue netted to zero as the transaction did not impact cash.

(5)

Adjustment to reclass $102 from deferred revenue to other current liabilities (current deferred revenue) related to the change in revenue allocated to the non-exclusive research license recognized upon option exercise under ASC 605 versus ratably over time under ASC 606.

Collaboration Arrangements

The Company records the elements of its collaboration agreements that represent joint operating activities in accordance with ASC 808. Accordingly, the elements of the collaboration agreements that represent activities in which both parties are active participants and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities, are recorded as collaborative arrangements. The Company considers the guidance in ASC 606 in determining the appropriate treatment for the transactions between the Company and its collaborative partner and the transactions between the Company and third parties. Generally, the classification of transactions under the collaborative arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants.

The Company evaluates the proper presentation of the commercial activities and the proﬁt and loss sharing associated with the collaboration agreements. ASC 808 states that when payments between parties in a collaborative arrangement are not within the scope of other authoritative accounting literature, the income statement classification should be based on the nature of the arrangement, the nature of its business operations and the contractual terms of the arrangement. To the extent that these payments are not within the scope of other authoritative accounting literature, the income statement classification for the payments shall be based on an analogy to authoritative accounting literature or if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election.

New Accounting Pronouncements - Recently Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date.

Financial Instrument Accounting

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new standard amends certain aspects of accounting and disclosure requirements of financial instruments, including the requirement that equity investments with readily determinable fair values be measured at fair value with changes in fair value recognized in the results of operations. The new standard was effective January 1, 2018. The Company adopted ASU No. 2016-01 in the first quarter of 2018. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

Income Taxes

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (“ASU 2016-16”): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party, which is an exception to the principle of comprehensive recognition of current and deferred income taxes. The amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. The Company adopted ASU No. 2016-16 in the first quarter of 2018. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

Statement of Cash Flows

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending balances shown on the statement of cash flows. The Company adopted ASU No. 2016-18 retrospectively in the first quarter of 2018 and the change in accounting principle is reflected in the statements of cash flows for the six months ended June 30, 2018 and 2017 accordingly. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

Business Combinations

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) (“ASU 2017-01”). ASU 2017-01 clarifies whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The purpose of the guidance is to narrow the definition of a business at it relates to recording transactions as business acquisitions or asset acquisitions. The Company adopted ASU No. 2017-01 in the first quarter of 2018. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

Stock Compensation

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (“ASU 2017-09”): Scope Modification Accounting. The new standard is intended to reduce the diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. The Company adopted ASU No. 2017-09 in the first quarter of 2018. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

New Accounting Pronouncements - to be adopted in future periods

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which applies to all leases and will require lessees to record most leases on the balance sheet but recognize expense in a manner similar to the current standard. In July 2018, the FASB also issued ASU No. 2018-11, Codification Improvements to Topic 842, Leases (“ASU 2018-11”), which clarifies and corrects narrow aspects of the guidance issued in ASU 2016-02. ASU 2016-02 and 2018-11 are effective for fiscal years beginning after December 15, 2018 and interim periods within those years, first of which is the year ending December 31, 2019 for the Company. Entities are required to use a modified retrospective approach of adoption for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is evaluating the new guidance and the expected impact on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Stock Compensation (“ASU 2018-07”) which provides improvements to nonemployee share-based payment accounting. ASU 2018-07 is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. The scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) is expanded to include share-based payments issued to nonemployees for goods or services. Subtopic 505-50, Equity-Equity-Based payments to Non-Employees is superseded and consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The update is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company intends to early adopt this standard for the three- month period ending September 30, 2018. The adoption of this guidance is could have a material impact on the Company’s consolidated financial statements. As a result of adopting this standard, the fair value of outstanding nonemployee awards as of June 30, 2018 will no longer be remeasured each reporting period. All future expense related to these awards will be recorded based on the fair value measured as of June 30, 2018, the last period prior to the adoption of ASU 2018-07.

Net Loss Per Share Attributable to Common Shareholders

Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to common shareholders by the weighted-average number of common equivalent shares outstanding for the period, including any dilutive effect from outstanding stock options and warrants using the treasury stock method.

The following common share equivalents, presented on an as converted basis, were excluded from the calculation of net loss per share for the periods presented, due to their anti-dilutive effect (in common stock equivalent shares):

	As of
	June 30, 2018		June 30, 2017
Outstanding options		6,617,181		5,636,786
Unvested unissued restricted common shares		169,930		72,603
Total		6,787,111		5,709,389

Basis of Presentation and Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP, and include the accounts of (i) the Company, and (ii) its wholly-owned subsidiaries, CRISPR Therapeutics Ltd., CRISPR Therapeutics Inc., and TRACR Hematology Inc. All intercompany accounts and transactions have been eliminated. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and ASUs of the FASB. The Company accounts for its 50% interest in Casebia under the equity method of accounting. See Note 6 for further details.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates its estimates, which include, but are not limited to, equity-based compensation expense, revenue recognition, equity method investments, fair value of intangible assets, the provision for or benefit from income taxes and reported amounts of research and development expenses during the period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. The consolidated statements reflect all adjustments which are of a normal recurring nature necessary for presentation. Actual results may differ from those estimates or assumptions.

Property and Equipment, net

6 Months Ended

Jun. 30, 2018

Property Plant And Equipment [Abstract]

Property and Equipment, net

3. Property and Equipment, net

Property and equipment, net, consists of the following (in thousands):

	As of
	June 30,			December 31,
	2018			2017
Computer equipment	$	403		$	285
Furniture, fixtures, and other		2,214			2,104
Laboratory equipment		7,475			6,603
Leasehold improvements		13,776			13,776
Construction work in process		102			-
		23,970			22,768
Accumulated Depreciation		(5,575	)		(3,911	)
Property and equipment, net	$	18,395		$	18,857

Depreciation expense for the three and six months ended June 30, 2018 was $0.9 million and $1.7 million, respectively. Depreciation expense for the three and six months ended June 30, 2017 was $0.7 million and $1.4 million, respectively.

Accrued Expenses

6 Months Ended

Jun. 30, 2018

Payables And Accruals [Abstract]

Accrued Expenses

4. Accrued Expenses

Accrued expenses consist of the following (in thousands):

	As of
	June 30,		December 31,
	2018		2017
Payroll and employee-related costs	$	4,696	$	5,550
Research costs		4,921		2,285
Licensing fees		216		609
Professional fees		1,487		2,176
Intellectual property costs		1,352		500
Other		30		241
Total	$	12,702	$	11,361

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2018
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	5. Commitments and Contingencies Research Agreements and Manufacturing Agreements The Company has engaged several research institutions and companies to identify new delivery strategies and applications of the CRISPR/Cas9 technology and has sponsored research programs. In association with these arrangements, the Company has remaining commitments for related research and development services of $0.8 million through 2020. The Company is also a party to a number of research license agreements which require significant upfront payments, future royalty payments and potential milestone payments from time to time. In association with these agreements, the Company has committed to making payments for related research and development services of $1.2 million through 2020. In connection with these agreements, during the three and six months ended June 30, 2018, the Company has made payments of $0.8 million and of $1.2 million, respectively. In connection with these agreements, during the three and six months ended June 30, 2017, the Company has made payments of $0.8 million and of $1.7 million, respectively. The Company is a party to a number of manufacturing agreements that require upfront payments for the future performance of services. In connection with these agreements, the Company has made upfront payments and recorded $3.3 million as prepaid expenses on the condensed consolidated balance sheet as of June 30, 2018. The Company will amortize the prepaid balance as services are performed. Litigation The Company licenses a U.S. patent application from Emmanuelle Charpentier (as described in more detail in this Report) that is currently subject to interference proceedings declared by the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office. Following motions by the parties and other procedural matters, the PTAB concluded in February 2017 that the declared interference should be dismissed because the claim sets of the two parties were not directed to the same patentable invention in accordance with the PTAB’s two-way test for patent interferences. In April 2017, Dr. Charpentier, the regents of the University of California (“UC”), and the University of Vienna appealed the PTAB decision to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”). In the appeal, California is seeking review and reversal of the PTAB’s February 2017 decision, which terminated the interference without determining which inventors actually invented the use of the CRISPR/Cas9 genome editing technology in eukaryotic cells. The Federal Circuit conducted a hearing on the appeal on April 30, 2018. In February 2018, several parties filed oppositions in the European Patent Office to the grant of the Company’s in-licensed European patent. Opposition proceedings can lead to the revocation of a patent in its entirety; the maintenance of the patent as granted, or the maintenance of a patent in amended form. Opposition proceedings typically take years to resolve, including the time taken by appeals that can be filed by any of the parties. The Company cannot guarantee the outcome of the oppositions to its in-licensed European patent, and an adverse result could preclude the Company from enforcing its rights in Europe against third parties. On December 15, 2016, the Company entered into a Consent to Assignments, Licensing and Common Ownership and Invention Management Agreement (the “Invention Management Agreement”) with the University of California, University of Vienna, Dr. Emmanuelle Charpentier, Intellia Therapeutics, Inc. Caribou Biosciences, Inc., ERS Genomics Ltd. and TRACR Hematology Ltd. Under the Invention Management Agreement, the Company is obligated to share costs related to patent maintenance, defense and prosecution. During the three and six months ended June 30, 2018, the Company incurred $0.6 million and $1.1 million, respectively, in shared costs. During the three and six months ended June 30, 2017, the Company incurred $0.5 million, and $1.0 million, respectively, in shared costs. The Company recorded accrued legal costs from the cost sharing of $1.2 million and $0.4 million as of June 30, 2018 and December 31, 2017, respectively. The Company is unable to predict the outcome of these matters and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome.

Significant Contracts

6 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Significant Contracts

6. Significant Contracts

Collaboration Agreement with and Joint Development Agreement with Vertex Pharmaceuticals, Incorporated

Summary of Agreement

On October 26, 2015, the Company entered into a strategic collaboration, option, and license agreement (as may be amended from time to time, “Collaboration Agreement”) with Vertex, focused on the use of CRISPR’s gene editing technology, known as CRISPR/Cas9, to discover and develop potential new treatments aimed at the underlying genetic causes of human disease. On December 12, 2017, the Company and Vertex entered into Amendment No. 1 to the Collaboration Agreement (the “Amendment”) and the Joint Development Agreement (the “JDA”). The Amendment, among other things, modified certain definitions and provisions of the Collaboration Agreement to make them consistent with the JDA and clarified how many options are exercised (or deemed exercised) in connection with certain targets specified under the Collaboration Agreement. The Amendment also amended other provisions of the Collaboration Agreement, including the expiration terms of the Collaboration Agreement.

In connection with the Collaboration Agreement, Vertex made a nonrefundable upfront payment of $75.0 million. Under the Collaboration Agreement, Vertex will fund all of the discovery activities conducted pursuant to the agreement while retaining options to co-exclusive and exclusive licenses. In December 2017, upon execution of the JDA and Amendment, Vertex exercised its option to obtain a co-exclusive license to develop and commercialize hemoglobinopathy and beta-globin targets. As such, for potential hemoglobinopathy treatments, including treatments for sickle cell disease, the Company and Vertex will share equally all research and development costs and worldwide revenues. For other targets that Vertex elects to license, Vertex will lead all development and global commercialization activities. For each of up to four remaining targets that Vertex elects to license, the Company has the potential to receive up to $420.0 million in development, regulatory and commercial milestones and royalties on net product sale.

In connection with entering into the JDA, the Company received a $7.0 million up-front payment from Vertex and is eligible for a one-time low seven-digit milestone payment upon the dosing of the second patient in a clinical trial with the initial product candidate. The net profits and net losses, as applicable, incurred under the JDA will be shared equally between the Company and Vertex.

Accounting for the Collaboration Agreement, Amendment and JDA

As the overall arrangement was modified in December 2017, the Company applied the practical expedient in ASC 606-10-65-1 in identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price under the practical expedient in ASC 606.

The arrangement includes components of a customer-vendor relationship and a collaborative arrangement as defined under ASC 808. The Company will apply the guidance of ASC 606 by analogy to the vendor-customer performance obligations of the Collaboration Agreement and the performance obligations of the JDA subject to ASC 606 as outlined below. The Company will apply the guidance of ASC 808 to those elements in which there is a collaboration relationship in which both parties share equally in the risks and rewards of the research and development which include (i) development and commercialization services for currently identified shared products; (ii) R&D services for any follow-on products subject to the JDA; and (iii) committee participation.

The Company evaluated the Collaboration Agreement, Amendment and JDA in accordance with the provisions of ASC 606. The Company identified the following performance obligations: (i) the non-exclusive research license; (ii) four material rights representing the option for up to four exclusive licenses to develop and commercialize the collaboration targets; (iii) a combined performance obligation representing the co-exclusive research license, and a development and commercialization license to develop and commercialize hemoglobinopathies and beta-globin targets; and (iv) the performance of R&D Services.

The selling price of each performance obligation was determined based on the Company’s estimated standalone selling price (the “ESSP”). The Company developed the ESSP for all the performance obligations included in the Collaboration Agreement and JDA with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis. The ESSP for material rights was determined based on the incremental discount given to Vertex based on the ESSP of the four remaining exclusive licenses and the exercise price paid at the time of exercise.

The Company developed the ESSP for the R&D Services primarily based on the nature of the services to be performed and estimates of the associated effort and cost of the services, adjusted for a reasonable profit margin that would be expected to be realized under similar contracts. The Company’s ESSP for the satisfied and unsatisfied R&D Services was $19.3 million.

The Company’s ESSP for each of the remaining material rights to obtain an exclusive license to develop and commercialize a single collaboration target are $45.6 million, $38.4 million, $17.3 million and $17.3 million for a total of $118.6 million. ESSPs for these items were determined based on probability and present value adjusted cash flows from the milestones payments owed for exclusive licenses outlined in the Collaboration Agreement less the price paid to exercise the material right option. ESSP reflects the level of risk and expected probability of success inherent in the nature of the associated research area.

The Company’s ESSP for the co-exclusive research license and the development and commercialization licenses for of the hemoglobinopathy and beta-globin targets is $48.9 million. ESSP for this item was determined based on probability and present value adjusted cash flows from the equal sharing of projected worldwide net profit or net loss. ESSP reflects the level of risk and expected probability of success inherent in the nature of the associated research area.

The Company used a market-based approach to determine the ESSP of the non-exclusive research license of $1.0 million. The Company determined ESSP by use of comparative data, including in-licensed research agreements negotiated and executed within the Company.

As the Company has a right to consideration from Vertex in an amount that corresponds directly with the value of the Company’s performance completed to date for the R&D services, thus the Company will recognize revenue related to the R&D services as invoiced, in line with the practical expedient in ASC 606-10-55-18.

The transaction price is comprised of: (i) original upfront payment of $75.0 million, (ii) an upfront payment of $7.0 million under the JDA, and (iii) $19.3 million of variable consideration associated with the R&D services. The R&D services revenue will be recognized as invoiced and specifically allocated to the R&D services performance obligation. The remaining transaction price of $82.0 million was allocated among the performance obligations using the relative selling price method as follows: (i) a non-exclusive research license: $0.5 million; (ii) a material right to discounts for exclusive licenses for up to four Collaboration Targets: $22.2 million, $18.7 million, $8.4 million and $8.4 million for a total of $57.7 million; and (iii) co-exclusive development and commercialization licenses for hemoglobinopathy and beta-globin targets identified in the JDA and co-exclusive research license for the follow-on products: $23.8 million.

The Company determined that the non-exclusive research license is symbolic intellectual property as Vertex receives value from the license through the Company’s ongoing activities, as such, the revenue related to the non-exclusive research license is recognized ratably over the term of the arrangement. Upon the execution of the JDA, a co-exclusive research, development and commercialization license was granted for hemoglobinopathy and beta-globin targets. The Company determined that the revenue related to these licenses was recognized at a point in time, in which they were delivered at inception of the JDA in December 2017. As Vertex has material right in its option to obtain four additional exclusive licenses to develop and commercialize four additional collaboration targets, the Company determined that consideration allocated to these material rights would be included in the transaction price of the exclusive license and recognized at a point in time, upon the exercise of the option by Vertex or expiration.

Milestones under the Collaboration Agreement

The Company has evaluated all of the milestones that may be received in connection with the Collaboration Agreement and JDA. The first potential milestone the Company will be entitled to receive is the milestone in the JDA to receive a one-time low seven-digit milestone payment in any clinical trial in the initial shared product and is currently fully constrained. The remaining milestones are predominately related to the development and commercialization of a product resulting from the arrangement and are payable with respect to each selected exclusive license which have yet to be exercised and are not currently included in the determination of the transaction price. Each milestone is payable only once per collaboration target, regardless of the number of products directed to such collaboration target that achieve the relevant milestone event. There are nine remaining clinical development and regulatory approval milestones which may trigger proceeds of up to $90.0 million and $235.0 million, respectively, for each selected exclusive license, and two commercial milestones which may trigger proceeds of up to $75.0 million for each selected exclusive license (which, when combined with the $10.0 million due upon exercise of the exclusive option and the $10.0 million development milestone associated with an Investigational New Drug- enabling application, total $420.0 million for each selected Exclusive License), as follows:

Developmental Milestone Events

Initiation of the first Clinical Trial of a Product

Establishment of Proof of Concept for a Product

Initiation of the first Phase 3 Clinical Trial of a Product

Acceptance of Approval Application by the U.S. Food and Drug Administration for a Product

Acceptance of Approval Application by the European Medicines Agency for a Product

Acceptance of Approval Application by a Regulatory Authority in Japan for a Product

Marketing Approval in the U.S. for a Product

Marketing Approval in the EU for a Product

Marketing Approval in Japan for a Product

Commercial Milestone Events

Annual Net Sales for Products with respect to a Collaboration Target exceed $500 million; and

Annual Net Sales for Products with respect to a Collaboration Target exceed $1.0 billion

There is uncertainty that the events to obtain the developmental milestones will be achieved given the nature of clinical development and the stage of the CRISPR/Cas9 technology. Upon exercise of the exclusive license options, developmental milestones will be constrained until the Company is sure that a significant revenue reversal will not occur. Commercial milestones and royalties relate predominantly to a license of intellectual property and are determined by sales or usage-based thresholds. The commercial milestones and royalties will be accounted for under the royalty recognition constraint and will be accounted for as constrained variable consideration. The Company will apply the royalty recognition constraint for each commercial milestone and will not recognize revenue for each until the subsequent sale of a licensed product (achievement of each) occurs.

Collaborative elements

The Company evaluated the Collaboration Agreement, Amendment and JDA in accordance with the provisions of ASC 808. The Company identified the following elements of ASC 808: (i) development and commercialization services for shared products; (ii) R&D services for follow-on products; and (iii) committee participation.

The Company evaluated that the nature of the arrangement and determined the arrangement is a cost/profit sharing arrangement and not a revenue arrangement. Therefore, the related impact of the cost sharing associated with research and development will be included in R&D expense. Expenses related to services performed by the Company will be classified as R&D expense. Payments received from Vertex for partial reimbursement of expenses are recorded as a reduction of R&D expense.

During the three and six months ended June 30, 2018, the Company recognized $0.2 million and $0.4 million of revenue related to the collaboration with Vertex, respectively. During the three and six months ended June 30, 2017, the Company recognized $2.1 million and $3.6 million of revenue related to the collaboration with Vertex, respectively. Research and development expense incurred by the Company in relation to its performance under the Collaboration Agreement for the three and six months ended June 30, 2018 was $0.2 million and $0.4 million, respectively. Research and development expense incurred by the Company in relation to its performance under the Collaboration Agreement for the three and six months ended June 30, 2017 was $3.3 million and $5.9 million, respectively. Research and development expense incurred by the Company in relation to its performance under the JDA for the three and six months ended June 30, 2018 was $8.9 million and $16.3 million, respectively. Reimbursements from Vertex under the JDA for the three and six months ended June 30, 2018 was $3.7 million and $6.9 million, respectively. As of June 30, 2018, and December 31, 2017, there was $57.8 million and $56.8 million of non-current deferred revenue related to the Collaboration Agreement, respectively. The transaction price allocated to the remaining performance obligations is $57.9 million. The remaining performance obligations will be recognized as follows: four material rights to obtain an exclusive commercialization and development license at a point in time, upon exercise; and the non-exclusive research license ratably over/within the remaining two-and-a-half-year research term. As of June 30, 2018, the remaining amount to be recognized for the non-exclusive research license is not significant. R&D services will be recognized as invoiced under the practical expedient and are not disclosed within the remaining performance obligation balance. Reported amounts for 2018 are reflective of accounting under ASC 606 and amounts for 2017 are reflective of accounting under ASC 605 and therefore may not be comparable.

Joint Venture with Bayer Healthcare LLC

On December 19, 2015, the Company entered into an agreement with Bayer, to establish a joint venture (“Bayer Joint Venture”) to focus on the research the development of new therapeutics to cure blood disorders, blindness, and congenital heart disease. On February 12, 2016, the Company and Bayer completed the formation of the joint venture entity, Casebia, a limited liability partnership formed in the United Kingdom. Bayer and the Company each received a 50% equity interest in the entity in exchange for their respective contributions to the entity. The Company contributed $0.1 million in cash and licensed its proprietary CRISPR/Cas9 gene editing technology and intellectual property for selected disease indications. Bayer contributed its protein engineering expertise and relevant disease know-how.

Under the agreement, Casebia has paid the Company $35.0 million in exchange for a worldwide, exclusive license to commercialize the Company’s CRISPR/Cas9 technology specifically for the indications covered by the license. There are no milestone, royalties or other payments due to the Company under this aspect of the agreement. The Company determined that the contribution of the CRISRP/Cas9 technology by license to Casebia did not meet the definition of a business under ASC 805.

The Company also entered into a separate services agreement with Casebia, under which the Company agreed to provide compensated research and development services.

Concurrent with the execution of the Bayer Joint Venture agreement, the Company also issued a convertible note to Bayer BV (the “Bayer Convertible Loan”) for gross proceeds of $35.0 million which was immediately converted to the Company’s Series B Preferred Shares at a conversion price of $13.43 per share. Concurrent with the Company’s initial public offering in October 2016, the Company issued and sold 2,500,000 common shares to Bayer BV, at the public offering price of $14.00 per share, resulting in aggregate net proceeds of $35.0 million.

As the agreements relating to the Bayer Joint Venture (including the CRISPR/Cas9 technology license and the research and development services) and the Bayer Convertible Loan were executed at the same time, the Company determined that the contracts should be combined and evaluated as a single arrangement. Additionally, the Company also determined that ASC 845, Nonmonetary Transactions (“ASC 845”) did not apply to this arrangement given the Company’s significant continuing involvement with Casebia and the amount of cash involved in the arrangement. As a result, the Company analogized to the guidance within ASC 606 regarding the allocation of arrangement consideration, however elements under transaction that were not in the scope of ASC 606 were accounted for under accounting literature based on the allocated arrangement consideration.

The Company determined the total consideration to be allocated to various elements of the transaction includes (i) the total cash payment by Casebia for the technology access fee, net of the Company’s $0.1 million contribution, of $34.9 million, (ii) the fair value of the equity interest in the Joint Venture of $36.4 million, (iii) the $35.0 million received from the issuance of the Bayer Convertible Loan, and (iv) $6.3 million of estimated cash consideration to be received under the research and development service arrangement, accumulating to $112.6 million.

The Company identified the following performance obligations in the combined transaction:

(i) Combined element of an exclusive, worldwide, royalty free, license to the CRISPR/Cas9 technology specifically for the indications designated by Casebia, and delivery of the consents of the assignors of the underlying patents to the technology to develop, manufacture, and commercialize licensed products under that license

(ii)Research and development services, and

The Company also identified the issuance of the Bayer Convertible Loan as another element to be accounted for under ASC 470, “Debt.”

The Company allocated consideration to the performance obligations and other elements based on the relative proportion of their standalone selling prices. The Company determined the standalone selling price of the license was $71.4 million based on the consideration paid and the fair value of the 50% interest in Casebia, which was determined utilizing discounted cash flows based on reasonable estimates and assumptions of cash flows expected from Casebia. The standalone selling prices of the separate research and development services was determined to be $6.3 million and of the fair value of the Bayer Convertible Loan was determined to be $24.5 million, based on the fair value of the underlying preferred shares that were exchanged as part of the immediate conversion. Using a relative standalone selling price allocation, the Company allocated the aggregate arrangement consideration paid as follows:

(i) $79.1 million was allocated to the license and patent holder consent combined element;

(ii)$27.2 million was allocated to the Bayer Convertible Loan.

The difference between combined above amounts of $106.3 million and the total transaction price of $112.6 million is due to variable consideration of $6.3 million associated with the research and development service arrangement. The amount of the transaction price related to the research and development services ($6.3 million) will be allocated specifically to the research and development performance obligation under the right to invoice practical expedient in ASC 606-10-55-18.

The combined amount attributed to the license and patent holder consent element of $79.1 million was recognized as other income for the year ended December 31, 2016.

During 2016, the Company recorded an equity method investment of $36.5 million equal to the fair value of the Company’s interest in Casebia (which was included in the allocable arrangement consideration described above). During 2016, the Company recorded unrealized equity method losses of up to the remaining amount of the $36.5 million investment.

The R&D services are the only remaining performance obligations as of June 30, 2018.

At June 30, 2018 and December 31, 2017, the value of the Company’s equity method investment in Casebia was zero.

Collaborative elements

The Company also participates in cost sharing activities with Casebia with respect to shared research and technology licenses with other vendors. The Company evaluated that the nature of the activity and determined the arrangement is a cost/profit sharing arrangement and not a revenue arrangement. Therefore, the related impact of the cost sharing is included in R&D expense. The Company received reimbursements of $0.6 million and $0.9 million for both research and license agreements during the three and six months ended June 30, 2018, respectively, which was recorded as a reduction of R&D expense in the income statement. The Company received reimbursements of $0.9 million and $1.5 million for both research and license agreements during the three and six months ended June 30, 2017, respectively.

Collaboration Revenue

During the three and six months ended June 30, 2018, the Company recognized $0.9 million and $2.0 million of revenue, respectively, related to the collaboration with Casebia. During the three and six months ended June 30, 2017, the Company recognized $1.5 million and $2.6 million of revenue, respectively, related to the collaboration with Casebia. Amounts for 2018 are reflective of accounting under ASC 606 and amounts for 2017 are reflective of accounting under ASC 605 and therefore may not be comparable. During the three and six months ended June 30, 2018, the Company recognized $1.2 million and $2.4 million of research and development expense, respectively, in relation to its performance under the agreement. During the three and six months ended June 30, 2017, the Company recognized $1.4 million and $2.5 million of research and development expense, respectively, in relation to its performance under the agreement. During the three and six months ended June 30, 2018, the Company recognized $1.2 million and $2.2 million, respectively, of stock-based compensation expense related to Casebia employees. During the three and six months ended June 30, 2017, the Company recognized $0.5 million and $1.0 million, respectively, of stock-based compensation expense related to Casebia employees. Deferred revenue related to the Company’s collaboration with Casebia was zero and $0.1 million as of June 30, 2018 and December 31, 2017, respectively. Unrecognized equity method losses in excess of the Company’s equity investment in Casebia was $33.0 million and $21.2 million as of June 30, 2018 and December 31, 2017, respectively.

Total operating expenses and net loss of Casebia for the three and six months ended June 30, 2018 was $13.5 million and $25.8 million, respectively. Total operating expenses, and net loss of Casebia for the three and six months ended June 30, 2017 was $9.0 million and $14.6 million, respectively.

Share Capital

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Share Capital

7. Share Capital

The Company had 47,520,292 registered common shares as of June 30, 2018, with a par value of CHF 0.03 per share, which includes 39,096 shares of unvested unissued restricted common shares and 409,361 treasury shares which are legally outstanding but not considered outstanding for accounting purposes.

Conditional Capital Reserved for Future Issuance

The Company had the following conditional capital reserved for future issuance:

	As of
Conditional Capital	June 30, 2018		December 31, 2017
Unvested unissued restricted stock		—		166,667
Outstanding stock options		6,617,181		6,262,339
Reserved for future issuance under stock option plans (1)		7,749,714		4,657,700
Shares available for bonds and similar debt instruments		4,919,700		4,919,700
Shares available for employee purchase plans		413,226		413,226
Total		19,699,821		16,419,632

(1)	The Company’s Board of Directors and shareholders approved an increase to the option pool of 2,012,684 options in May 2017 and an additional increase to the option pool of an additional 4,000,000 options in May 2018.

Equity-based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity-based Compensation

8. Equity-based Compensation

The Company uses the straight-line attribution method to recognize stock-based compensation expense for stock options and restricted stock awards. Stock options and restricted stock awards generally vest over four years with 25% vesting on the first anniversary of service commencement and the remaining 75% vesting monthly thereafter. The following table presents stock-based compensation expense included in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Research and development	$	5,167	$	1,946	$	8,083	$	3,676
General and administrative		3,157		1,780		5,823		3,350
Loss from equity method investment		1,153		505		2,244		951
Total	$	9,477	$	4,231	$	16,150	$	7,977

Grant-Date Fair Value

The Company estimated the fair value of each employee and non-employee stock option award using the Black-Scholes option-pricing model based on the following assumptions:

	Six Months Ended June 30,
	2018			2017
Employees:
Weighted average expected volatility		72.2	%		72.7	%
Expected term (in years)		6.0			6.0
Risk free interest rate	2.4%-2.9		%	1.8-2.3		%
Expected dividend yield		0.0	%		0.0	%

The fair value of the restricted stock awards was determined based on the fair value of the common shares on the grant date. Non-employee stock options and restricted stock awards, including those granted to employees of Casebia, are marked-to-market at each reporting period.

Share Based Payment Activity

Stock Option Awards

The following table summarizes stock option activity for employees and non-employees (intrinsic value in thousands):

	Stock Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2017		6,262,339		$	13.24		8.8	$	64,120
Granted		1,735,997		$	52.47
Exercised		(747,007	)	$	10.47
Cancelled or forfeited		(634,148	)	$	18.43
Outstanding at June 30, 2018		6,617,181		$	23.35		8.8	$	235,281
Exercisable at June 30, 2018		1,757,151		$	12.38		8.1	$	81,507
Vested or expected to vest at June 30, 2018 (1)		6,617,181		$	23.35		8.8	$	235,281

(1)	Represents the number of vested options at June 30, 2018 plus the number of unvested options expected to vest in the future.

As of June 30, 2018, total unrecognized compensation expense related to stock options was $90.4 million which the Company expects to recognize over a remaining weighted-average period of 3.3 years.

During the six months ended June 30, 2018 and 2017, the Company granted options to purchase 0 and 60,000 common shares, respectively, subject to performance-based vesting conditions.

During 2017, the Company also granted 150,000 stock options with market-based vesting conditions in which the recipient is eligible to receive between zero and 150,000 options to purchase common shares at the end of a four-year service period based upon achieving a specified average stock price. As of June 30, 2018, no options to purchase common shares subject to market-based vesting conditions were vested; however 150,000 options were earned as the specified average stock price limits were achieved.

In May 2018, the Company modified the terms of certain options held by a departing employee. The modification resulted in $2.2 million in stock-based compensation expense recorded during the period.

Restricted Stock Awards

The following table summarizes restricted stock activity for employees and non-employees during the six months ended June 30, 2018:

	Reflected as outstanding upon vesting			Reflected as outstanding upon grant date			Total			Weighted- Average Grant Date Fair Value
Unvested restricted common shares as of December 31, 2017		157,515			208,886			366,401		$	8.49
Granted		32,500			—			32,500			55.03
Vested		(20,085	)		(158,891	)		(178,976	)		6.15
Cancelled or forfeited		—			—			—			—
Unvested restricted common shares as of June 30, 2018		169,930			49,995			219,925		$	17.08

During the six months ended June 30, 2018, the total fair value of vested restricted common shares was $8.1 million. As of June 30, 2018, total unrecognized compensation expense related to unvested restricted common shares was $2.9 million which the Company expects to recognize over a remaining weighted-average period of 1.9 years.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	9. Income Taxes During the three and six months ended June 30, 2018, the Company recorded an income tax provision of $0.1 million and $0.2 million, respectively, representing an effective tax rate of -0.3% and -0.3%, respectively. During the three and six months ended June 30, 2017, the Company recorded an income tax provision of $0.3 million and $0.6 million, respectively, representing an effective tax rate of -1.6%, and -1.4%, respectively. The income tax provision is primarily attributable to the year-to-date pre-tax income earned by the Company’s U.S. subsidiary. The difference in the statutory tax rate and effective tax rate is primarily a result of the jurisdictional mix of earnings and losses that are not benefited. The Company maintains a valuation allowance against certain deferred tax assets that are not more-likely-than-not realizable. As a result, the Company has not recognized a tax benefit related to losses generated in Switzerland in the current periods. As disclosed in the Company’s Annual Report, the Company recorded provisional amounts in its 2017 financial statements to reflect the federal, state and foreign impacts of the Tax Cuts and Jobs Act of 2017 (the “Act”). These amounts remain provisional and subject to Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act,” (“SAB 118”) as of June 30, 2018. There have been no changes to the provisional amounts recorded in the 2017 financial statements during the three and six months ended June 30, 2018.

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2018
Related Party Transactions [Abstract]
Related Party Transactions	10. Related Party Transactions The Company is a party to intellectual property license agreements with Dr. Charpentier. During the three and six months ended June 30, 2018 and 2017, the Company did not record any sublicensing fees due to Dr. Charpentier in research and development expense related to the Bayer Joint Venture Agreement. Refer to Note 6, “Joint Venture with Bayer Healthcare LLC”, for discussion of transactions with Casebia, a related party.

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2018
Subsequent Events [Abstract]
Subsequent Events	11. Subsequent Events As of August 7, 2018, the Company is not aware of any events that have occurred that have a material effect on the financial statements.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Revenue Recognition

1) Identify the contract with the customer

2) Identify the performance obligations in the contract

3) Determine the transaction price

4) Allocate the transaction price to performance obligations in the contract

5) Recognize revenue when or as the Company satisfies a performance obligation

Contract Balances

Costs to Obtain and Fulfill a Contract with Customer

Income Taxes

Impact of Adopting ASC 606 on the Financial Statements

	As Reported December 31, 2017			ASC 606 Adjustment			Adjusted January 1, 2018
Consolidated Balance Sheet Data (in thousands):
Other current liabilities	$	137		$	102		$	239
Total current liabilities	$	14,511		$	102		$	14,613
Deferred revenue	$	56,928		$	1,046		$	57,974
Total liabilities	$	83,514		$	1,148		$	84,662
Accumulated deficit	$	(125,440	)	$	(1,148	)	$	(126,588	)
Total shareholders' equity	$	187,832		$	(1,148	)	$	186,684
Total liabilities and shareholders’ equity	$	271,346		$	-		$	271,346

Impact of New Revenue Guidance on Financial Statement Line Items

	As of June 30, 2018
	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Consolidated Balance Sheet Data (in thousands):
Other current liabilities	$	226		$	(102	)	(5)	$	124
Total current liabilities	$	18,481		$	(102	)	(5)	$	18,379
Deferred revenue	$	57,832		$	(851	)	(1)(2)(3)(5)	$	56,981
Total liabilities	$	87,976		$	(953	)	(1)(2)(3)(5)	$	87,023
Accumulated deficit	$	(193,268	)	$	953		(1)(2)(3)	$	(192,315	)
Total shareholders' equity	$	265,154		$	953		(1)(2)(3)	$	266,107
Total liabilities and shareholders’ equity	$	353,130		$	—		(1)(2)(3)	$	353,130

	Three Months Ended June 30, 2018
Consolidated Statement of Operations Data (in thousands):	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Collaboration revenue	$	1,088		$	(94	)	(2)(3)	$	994
Loss from operations	$	(37,286	)	$	(94	)	(2)(3)	$	(37,380	)
Net loss before income taxes	$	(38,284	)	$	(94	)	(2)(3)	$	(38,378	)
Net loss	$	(38,380	)	$	(94	)	(2)(3)	$	(38,474	)
Comprehensive loss	$	(38,401	)	$	(94	)	(2)(3)	$	(38,495	)

	Six Months Ended June 30, 2018
Consolidated Statement of Operations Data (in thousands):	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Collaboration revenue	$	2,446		$	(195	)	(2)(3)	$	2,251
Loss from operations	$	(64,283	)	$	(195	)	(2)(3)	$	(64,478	)
Net loss before income taxes	$	(66,498	)	$	(195	)	(2)(3)	$	(66,693	)
Net loss	$	(66,680	)	$	(195	)	(2)(3)	$	(66,875	)
Comprehensive loss	$	(66,689	)	$	(195	)	(2)(3)	$	(66,884	)

Consolidated Statement of Cash Flows (in thousands):
Operating activities:
Net loss	$	(66,680	)	$	(195	)	(2)(3)	$	(66,875	)
Reconciliation of net loss to net cash and restricted cash used in operating activities:
Changes in:
Deferred revenue	$	(244	)	$	297		(1)(2)(3)(4)(5)	$	53
Other liabilities, net	$	88		$	(102	)	(1)(2)(3)(4)(5)	$	(14	)
Net cash and restricted cash used in operating activities		#N/A		$	—		(1)(2)(3)(4)(5)		#N/A
Increase (decrease) in cash and restricted cash	$	79,990		$	—		(1)(2)(3)(4)(5)	$	79,990
Cash and restricted cash, end of period	$	322,902		$	—		(1)(2)(3)(4)(5)	$	322,902

(1)

Adjustment of $1,148 to reverse the ASC 606 transition adjustment from retained earnings and deferred revenue.

(2)

Adjustment of $68 and $144 for the three and six months ended June 30, 2018, related to R&D services that would be deferred under ASC 605 versus recognized as invoiced under ASC 606.

(3)

(4)

Adjustment to reverse the ASC 606 transition adjustment to retained earnings and deferred revenue netted to zero as the transaction did not impact cash.

(5)

Collaboration Arrangements

New Accounting Pronouncements - Recently Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date.

Financial Instrument Accounting

Income Taxes

Statement of Cash Flows

Business Combinations

Stock Compensation

New Accounting Pronouncements - to be Adopted in Future Periods

New Accounting Pronouncements - to be adopted in future periods

Net Loss Per Share Attributable to Common Shareholders

	As of
	June 30, 2018		June 30, 2017
Outstanding options		6,617,181		5,636,786
Unvested unissued restricted common shares		169,930		72,603
Total		6,787,111		5,709,389

Basis of Presentation and Use of Estimates

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Summary Of Significant Accounting Policies [Line Items]

Schedule of Antidilutive Securities Excluded from Computation of Net Loss per Share

	As of
	June 30, 2018		June 30, 2017
Outstanding options		6,617,181		5,636,786
Unvested unissued restricted common shares		169,930		72,603
Total		6,787,111		5,709,389

ASU 2014-09 [Member]

Summary Of Significant Accounting Policies [Line Items]

Modified Retrospective Method to Adopt New Revenue Guidance and Adjustments to Consolidated Balance Sheet

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:

	As Reported December 31, 2017			ASC 606 Adjustment			Adjusted January 1, 2018
Consolidated Balance Sheet Data (in thousands):
Other current liabilities	$	137		$	102		$	239
Total current liabilities	$	14,511		$	102		$	14,613
Deferred revenue	$	56,928		$	1,046		$	57,974
Total liabilities	$	83,514		$	1,148		$	84,662
Accumulated deficit	$	(125,440	)	$	(1,148	)	$	(126,588	)
Total shareholders' equity	$	187,832		$	(1,148	)	$	186,684
Total liabilities and shareholders’ equity	$	271,346		$	-		$	271,346

Impact of New Revenue Guidance on Financial Statement Line Items

	As of June 30, 2018
	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Consolidated Balance Sheet Data (in thousands):
Other current liabilities	$	226		$	(102	)	(5)	$	124
Total current liabilities	$	18,481		$	(102	)	(5)	$	18,379
Deferred revenue	$	57,832		$	(851	)	(1)(2)(3)(5)	$	56,981
Total liabilities	$	87,976		$	(953	)	(1)(2)(3)(5)	$	87,023
Accumulated deficit	$	(193,268	)	$	953		(1)(2)(3)	$	(192,315	)
Total shareholders' equity	$	265,154		$	953		(1)(2)(3)	$	266,107
Total liabilities and shareholders’ equity	$	353,130		$	—		(1)(2)(3)	$	353,130

	Three Months Ended June 30, 2018
Consolidated Statement of Operations Data (in thousands):	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Collaboration revenue	$	1,088		$	(94	)	(2)(3)	$	994
Loss from operations	$	(37,286	)	$	(94	)	(2)(3)	$	(37,380	)
Net loss before income taxes	$	(38,284	)	$	(94	)	(2)(3)	$	(38,378	)
Net loss	$	(38,380	)	$	(94	)	(2)(3)	$	(38,474	)
Comprehensive loss	$	(38,401	)	$	(94	)	(2)(3)	$	(38,495	)

	Six Months Ended June 30, 2018
Consolidated Statement of Operations Data (in thousands):	As Reported Under ASC 606			Adjustments			Notes	Adjusted Balance Under ASC 605
Collaboration revenue	$	2,446		$	(195	)	(2)(3)	$	2,251
Loss from operations	$	(64,283	)	$	(195	)	(2)(3)	$	(64,478	)
Net loss before income taxes	$	(66,498	)	$	(195	)	(2)(3)	$	(66,693	)
Net loss	$	(66,680	)	$	(195	)	(2)(3)	$	(66,875	)
Comprehensive loss	$	(66,689	)	$	(195	)	(2)(3)	$	(66,884	)

Consolidated Statement of Cash Flows (in thousands):
Operating activities:
Net loss	$	(66,680	)	$	(195	)	(2)(3)	$	(66,875	)
Reconciliation of net loss to net cash and restricted cash used in operating activities:
Changes in:
Deferred revenue	$	(244	)	$	297		(1)(2)(3)(4)(5)	$	53
Other liabilities, net	$	88		$	(102	)	(1)(2)(3)(4)(5)	$	(14	)
Net cash and restricted cash used in operating activities		#N/A		$	—		(1)(2)(3)(4)(5)		#N/A
Increase (decrease) in cash and restricted cash	$	79,990		$	—		(1)(2)(3)(4)(5)	$	79,990
Cash and restricted cash, end of period	$	322,902		$	—		(1)(2)(3)(4)(5)	$	322,902

(1)

Adjustment of $1,148 to reverse the ASC 606 transition adjustment from retained earnings and deferred revenue.

(2)

Adjustment of $68 and $144 for the three and six months ended June 30, 2018, related to R&D services that would be deferred under ASC 605 versus recognized as invoiced under ASC 606.

(3)

(4)

Adjustment to reverse the ASC 606 transition adjustment to retained earnings and deferred revenue netted to zero as the transaction did not impact cash.

(5)

Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2018

Property Plant And Equipment [Abstract]

Summary of Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):

	As of
	June 30,			December 31,
	2018			2017
Computer equipment	$	403		$	285
Furniture, fixtures, and other		2,214			2,104
Laboratory equipment		7,475			6,603
Leasehold improvements		13,776			13,776
Construction work in process		102			-
		23,970			22,768
Accumulated Depreciation		(5,575	)		(3,911	)
Property and equipment, net	$	18,395		$	18,857

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Payables And Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued expenses consist of the following (in thousands):

	As of
	June 30,		December 31,
	2018		2017
Payroll and employee-related costs	$	4,696	$	5,550
Research costs		4,921		2,285
Licensing fees		216		609
Professional fees		1,487		2,176
Intellectual property costs		1,352		500
Other		30		241
Total	$	12,702	$	11,361

Share Capital (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of Conditional Capital Reserved for Future Issuance

The Company had the following conditional capital reserved for future issuance:

	As of
Conditional Capital	June 30, 2018		December 31, 2017
Unvested unissued restricted stock		—		166,667
Outstanding stock options		6,617,181		6,262,339
Reserved for future issuance under stock option plans (1)		7,749,714		4,657,700
Shares available for bonds and similar debt instruments		4,919,700		4,919,700
Shares available for employee purchase plans		413,226		413,226
Total		19,699,821		16,419,632

(1)	The Company’s Board of Directors and shareholders approved an increase to the option pool of 2,012,684 options in May 2017 and an additional increase to the option pool of an additional 4,000,000 options in May 2018.

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

+ References

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-Name Accounting Standards Codification
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 210
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(28))
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-URI http://asc.fasb.org/extlink&oid=65877616&loc=d3e177068-122764

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 210
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-Paragraph 1
-Subparagraph (SX 210.5-02(29))
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(d))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Subparagraph (SX 210.3-04)
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Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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-Subparagraph (SX 210.5-02(27))
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Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Equity-based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Stock-Based Compensation Expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Research and development	$	5,167	$	1,946	$	8,083	$	3,676
General and administrative		3,157		1,780		5,823		3,350
Loss from equity method investment		1,153		505		2,244		951
Total	$	9,477	$	4,231	$	16,150	$	7,977

Fair Value of Employee and Non-employee Stock Option Award Estimated Using the Black-Scholes Option-Pricing Model

The Company estimated the fair value of each employee and non-employee stock option award using the Black-Scholes option-pricing model based on the following assumptions:

	Six Months Ended June 30,
	2018			2017
Employees:
Weighted average expected volatility		72.2	%		72.7	%
Expected term (in years)		6.0			6.0
Risk free interest rate	2.4%-2.9		%	1.8-2.3		%
Expected dividend yield		0.0	%		0.0	%

Summary of Stock Option Activity for Employees and Non-employees

The following table summarizes stock option activity for employees and non-employees (intrinsic value in thousands):

	Stock Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2017		6,262,339		$	13.24		8.8	$	64,120
Granted		1,735,997		$	52.47
Exercised		(747,007	)	$	10.47
Cancelled or forfeited		(634,148	)	$	18.43
Outstanding at June 30, 2018		6,617,181		$	23.35		8.8	$	235,281
Exercisable at June 30, 2018		1,757,151		$	12.38		8.1	$	81,507
Vested or expected to vest at June 30, 2018 (1)		6,617,181		$	23.35		8.8	$	235,281

(1)	Represents the number of vested options at June 30, 2018 plus the number of unvested options expected to vest in the future.

Summary of the Company's Restricted Stock Activity

The following table summarizes restricted stock activity for employees and non-employees during the six months ended June 30, 2018:

	Reflected as outstanding upon vesting			Reflected as outstanding upon grant date			Total			Weighted- Average Grant Date Fair Value
Unvested restricted common shares as of December 31, 2017		157,515			208,886			366,401		$	8.49
Granted		32,500			—			32,500			55.03
Vested		(20,085	)		(158,891	)		(178,976	)		6.15
Cancelled or forfeited		—			—			—			—
Unvested restricted common shares as of June 30, 2018		169,930			49,995			219,925		$	17.08

Organization and Operations - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		6 Months Ended
	Jan. 31, 2018	Oct. 31, 2016	Jun. 30, 2018	Dec. 31, 2017
Organization and operations [Line Items]
Company formation date			Oct. 28, 2013
Company formation country name			Basel, Switzerland
Accumulated deficit			$ (193,268)	$ (125,440)
Proceeds from issuance of common shares		$ 35,000	122,597
Cash			$ 319,737	$ 239,758
Equity Offering [Member]
Organization and operations [Line Items]
Issuance of common shares, net of issuance cost (in shares)	5,750,000
Common shares price per share	$ 22.75
Proceeds from issuance of common shares	$ 122,600

Summary of Significant Accounting Policies - Additional Information (Detail)	Jun. 30, 2018	Feb. 12, 2016
Casebia Therapeutics LLP [Member]
Summary Of Significant Accounting Policies [Line Items]
Equity method investment, ownership percentage	50.00%	50.00%
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Period between payment by the customer and the transfer of the promised goods or services	1 year

Summary of Significant Accounting Policies - Modified Retrospective Method to Adopt New Revenue Guidance and Adjustments to Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Other current liabilities	$ 226		$ 137
Total current liabilities	18,481		14,511
Deferred revenue	57,832		56,928
Total liabilities	87,976		83,514
Accumulated deficit	(193,268)		(125,440)
Total shareholders' equity	265,154		187,832
Total liabilities and shareholders’ equity	353,130		$ 271,346
ASU 2014-09 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Other current liabilities		$ 239
Total current liabilities		14,613
Deferred revenue		57,974
Total liabilities		84,662
Accumulated deficit		(126,588)
Total shareholders' equity		186,684
Total liabilities and shareholders’ equity		271,346
ASC 606 Adjustment [Member] \| ASU 2014-09 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Other current liabilities	(102)	102
Total current liabilities	(102)	102
Deferred revenue	(851)	1,046
Total liabilities	(953)	1,148
Accumulated deficit	953	(1,148)
Total shareholders' equity	$ 953	$ (1,148)

Summary of Significant Accounting Policies - Impact of New Revenue Guidance on Financial Statement Line Items (Detail) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2018

Jun. 30, 2017

Jun. 30, 2018

Jun. 30, 2017

Jan. 01, 2018

Dec. 31, 2017

Dec. 31, 2016

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

$ 226

$ 137

18,481

14,511

57,832

56,928

87,976

83,514

(193,268)

(125,440)

Total liabilities and shareholders’ equity

265,154

187,832

353,130

271,346

^[1]

1,088

$ 3,582

2,446

$ 6,285

(37,286)

(21,306)

(64,283)

(42,050)

(38,284)

(21,972)

(66,498)

(43,168)

(38,380)

(22,315)

(66,680)

(43,790)

(38,401)

(22,309)

(66,689)

(43,760)

Operating activities:

(66,680)

(43,790)

Changes in:

Net cash and restricted cash used in operating activities

(244)

1,586

Other liabilities, net

278

(47,903)

(39,383)

Increase (decrease) in cash and restricted cash

79,990

(43,252)

Cash and restricted cash, end of period

322,902

$ 275,418

322,902

$ 275,418

$ 242,912

$ 318,670

ASU 2014-09 [Member]

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

$ 239

14,613

57,974

84,662

(126,588)

Total liabilities and shareholders’ equity

186,684

271,346

Adjustments [Member] | ASU 2014-09 [Member]

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

(102)

102

(102)

102

(851)

1,046

(953)

1,148

953

(1,148)

953

$ (1,148)

(94)

(195)

(94)

(195)

(94)

(195)

(94)

(195)

(94)

(195)

Operating activities:

(195)

Changes in:

Adjusted Balance Under ASC 605 [Member] | ASU 2014-09 [Member]

297

Other liabilities, net

(102)

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

124

18,379

56,981

87,023

(192,315)

Total liabilities and shareholders’ equity

266,107

353,130

994

2,251

(37,380)

(64,478)

(38,378)

(66,693)

(38,474)

(66,875)

(38,495)

(66,884)

Operating activities:

(66,875)

Changes in:

Increase (decrease) in cash and restricted cash

Other liabilities, net

(14)

79,990

Cash and restricted cash, end of period

$ 322,902

[1]	Including the following revenue from a related party, see Note 10:

Summary of Significant Accounting Policies - Impact of New Revenue Guidance on Financial Statement Line Items (Parenthetical) (Detail) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2018

Jun. 30, 2017

Jun. 30, 2018

Jun. 30, 2017

Jan. 01, 2018

Dec. 31, 2017

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

$ (193,268)

$ (125,440)

Research and development

^[1]

25,633

$ 17,120

45,152

$ 31,925

ASU 2014-09 [Member]

ASU 2014-09 [Member] | ASC 606 Adjustment [Member]

$ (126,588)

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

1,148

Non-exclusive research revenue

953

$ (1,148)

Research and development

144

ASU 2014-09 [Member] | ASC 606 Adjustment [Member] | Other Current Liabilities [Member]

New Accounting Pronouncements Or Change In Accounting Principle [Line Items]

Deferred revenue current

$ 102

[1]	Including the following research and development expense with a related party, see Note 10:

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Net Loss per Share (Detail) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of net loss per share	6,787,111	5,709,389
Outstanding Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of net loss per share	6,617,181	5,636,786
Unvested Unissued Restricted Common Shares [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of net loss per share	169,930	72,603

Property and Equipment, net - Summary of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 23,970	$ 22,768
Accumulated Depreciation	(5,575)	(3,911)
Property and equipment, net	18,395	18,857
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	403	285
Furniture, Fixtures, and Other [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	2,214	2,104
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	7,475	6,603
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	13,776	$ 13,776
Construction Work in Progress [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 102

Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Property Plant And Equipment [Abstract]
Depreciation expense	$ 0.9	$ 0.7	$ 1.7	$ 1.4

Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accrued Liabilities Current [Abstract]
Payroll and employee-related costs	$ 4,696	$ 5,550
Research costs	4,921	2,285
Licensing fees	216	609
Professional fees	1,487	2,176
Intellectual property costs	1,352	500
Other	30	241
Total	$ 12,702	$ 11,361

Commitments and Contingencies - Additional Information (Detail) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

12 Months Ended

Jun. 30, 2018

Jun. 30, 2017

Jun. 30, 2018

Jun. 30, 2017

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Cost sharing expensed relating to patent maintenance, defense and prosecution, incurred

^[1]

$ 25,633

$ 17,120

$ 45,152

$ 31,925

600

500

1,100

1,000

Cost sharing expensed relating to patent maintenance, defense and prosecution, accrued

1,200

$ 400

Research Institutions [Member] | Scenario Forecast [Member]

Research Agreements [Member]

$ 800

Research Agreements [Member] | Scenario Forecast [Member]

800

$ 800

1,200

$ 1,700

Manufacturing Agreements [Member] | Prepaid Expenses [Member]

$ 1,200

Upfront payment recorded as prepaid expense

$ 3,300

[1]	Including the following research and development expense with a related party, see Note 10:

Significant Contracts - Additional Information (Detail)

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

Feb. 12, 2016

USD ($)

Dec. 19, 2015

USD ($)

$ / shares

Oct. 26, 2015

USD ($)

Milestone

May 31, 2018

USD ($)

Oct. 31, 2016

USD ($)

$ / shares

Jun. 30, 2018

USD ($)

Jun. 30, 2017

USD ($)

Jun. 30, 2018

USD ($)

Jun. 30, 2017

USD ($)

Dec. 31, 2017

USD ($)

Dec. 31, 2016

USD ($)

Jan. 01, 2018

USD ($)

Research and Development Arrangement, Contract to Perform for Others [Line Items]

^[1]

$ 1,088,000

$ 3,582,000

$ 2,446,000

$ 6,285,000

^[2]

25,633,000

17,120,000

45,152,000

31,925,000

Date of joint venture agreement

57,832,000

$ 57,832,000

$ 56,928,000

Dec. 19, 2015

Proceeds from issuance of common shares in secondary offering, net of issuance

$ 35,000,000

$ 122,597,000

Standalone selling price allocation of arrangement consideration paid

106,300,000

Other income

155,000

(161,000)

29,000

(167,000)

$ 79,100,000

Equity method investment

36,500,000

Unrealized equity method losses

(1,153,000)

(505,000)

(2,244,000)

(951,000)

$ (36,500,000)

Stock-based compensation expense

$ 2,200,000

9,477,000

4,231,000

16,150,000

7,977,000

ASC 606 [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

ASC 606 [Member] | ASC 605 [Member]

$ 57,974,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

994,000

2,251,000

Licensing Agreements [Member]

56,981,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Standalone selling price

71,400,000

License and Patent Holder Consent [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Standalone selling price allocation of arrangement consideration paid

79,100,000

Research and Development Services [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Standalone selling price

6,300,000

Common Stock [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Shares issued and sold | shares

2,500,000

Shares issued, price per share | $ / shares

$ 14.00

Series B Preferred Shares [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Debt instrument, conversion price | $ / shares

$ 13.43

Bayer Convertible Loans [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Gross proceeds from convertible debt

$ 35,000,000

Fair value of convertible loan

24,500,000

Standalone selling price allocation of arrangement consideration paid

27,200,000

Casebia Therapeutics LLP [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

112,600,000

Reimbursements from research and license agreements

1,200,000

1,400,000

2,400,000

2,500,000

600,000

900,000

1,500,000

Date of formation of joint venture entity

$ 0

100,000

Feb. 12, 2016

Equity method investment, ownership percentage

50.00%

Cash contribution

$ 100,000

Other payments due to company from joint venture entity

Cash contribution

$ 100,000

Equity interest in the Joint Venture

$ 36,400,000

36,400,000

Convertible Loan

35,000,000

Estimated revenue related to research and development services

6,300,000

Equity method investment

Stock-based compensation expense

1,200,000

500,000

2,200,000

1,000,000

Unrecognized equity method losses in excess of Company's interest

33,000,000

21,200,000

Operating expenses of joint venture

13,500,000

9,000,000

13,500,000

14,600,000

Net loss of joint venture

13,500,000

9,000,000

25,800,000

14,600,000

Research and Development Expenses [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Stock-based compensation expense

5,167,000

1,946,000

8,083,000

3,676,000

License and Service [Member] | Casebia Therapeutics LLP [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

License and Service [Member] | Casebia Therapeutics LLP [Member] | ASC 605 [Member]

35,000,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

License and Service [Member] | Casebia Therapeutics LLP [Member] | ASC 606 [Member]

1,500,000

2,600,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Royalty [Member] | Casebia Therapeutics LLP [Member]

900,000

2,000,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Technology Service [Member] | Casebia Therapeutics LLP [Member]

$ 0

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Non-Exclusive Research License [Member] | Market-based Approach [Member]

34,900,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Estimated standalone selling price for collaboration agreement

$ 1,000,000

Vertex Pharmaceuticals Inc [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Nonrefundable upfront payment received

75,000,000

Potential milestone receivable

420,000,000

Non-exclusive research revenue

19,300,000

Estimated standalone selling price for collaboration agreement

118,600,000

Clinical milestone payment payable

82,000,000

57,900,000

10,000,000

200,000

3,300,000

400,000

5,900,000

Vertex Pharmaceuticals Inc [Member] | Research and Development Expenses [Member]

57,800,000

$ 56,800,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Variable consideration received

19,300,000

Vertex Pharmaceuticals Inc [Member] | Rights One [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Estimated standalone selling price for single collaboration

45,600,000

Vertex Pharmaceuticals Inc [Member] | Rights Two [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Estimated standalone selling price for single collaboration

38,400,000

Vertex Pharmaceuticals Inc [Member] | Rights Three [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Estimated standalone selling price for single collaboration

17,300,000

Vertex Pharmaceuticals Inc [Member] | Rights Four [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Estimated standalone selling price for single collaboration

17,300,000

Vertex Pharmaceuticals Inc [Member] | License and Service [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Joint Development Agreement [Member]

200,000

$ 2,100,000

400,000

$ 3,600,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Nonrefundable upfront payment received

7,000,000

Up-front payment received

$ 7,000,000

Agreement description

Reimbursements from research and license agreements

8,900,000

$ 16,300,000

$ 3,700,000

$ 6,900,000

Vertex Pharmaceuticals Inc [Member] | Beta-Globin [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Estimated standalone selling price for single collaboration

48,900,000

Vertex Pharmaceuticals Inc [Member] | Non-Exclusive Research License [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Material Right to Discounts for Exclusive Licenses [Member]

500,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Material Right to Discounts for Exclusive Licenses [Member] | Unit One [Member]

57,700,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Material Right to Discounts for Exclusive Licenses [Member] | Unit Two [Member]

22,200,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Material Right to Discounts for Exclusive Licenses [Member] | Unit Three [Member]

18,700,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Material Right to Discounts for Exclusive Licenses [Member] | Unit Four [Member]

8,400,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Co-exclusive Development and Commercialization Licenses and Research License [Member]

8,400,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Clinical Development And Regulatory Milestone [Member]

$ 23,800,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Number of developmental milestone events | Milestone

Vertex Pharmaceuticals Inc [Member] | Clinical Development Milestones [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Revenue recognition, milestone method, revenue recognized

$ 90,000,000

Vertex Pharmaceuticals Inc [Member] | Regulatory Approval Milestone [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Revenue recognition, milestone method, revenue recognized

$ 235,000,000

Vertex Pharmaceuticals Inc [Member] | Commercial Milestones [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Number of developmental milestone events | Milestone

Revenue recognition, milestone method, revenue recognized

$ 75,000,000

Vertex Pharmaceuticals Inc [Member] | Investigational New Drug Application ("IND") [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Revenue recognition, milestone method, revenue recognized

10,000,000

Vertex Pharmaceuticals Inc [Member] | Developmental Milestone Events [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Revenue recognition, milestone method, revenue recognized

420,000,000

Vertex Pharmaceuticals Inc [Member] | Commercial Milestone Event One [Member] | Minimum [Member]

Research and Development Arrangement, Contract to Perform for Others [Line Items]

Vertex Pharmaceuticals Inc [Member] | Commercial Milestone Event Two [Member] | Minimum [Member]

500,000,000

Research and Development Arrangement, Contract to Perform for Others [Line Items]