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Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company classifies deposits in banks, money market funds and cash invested temporarily in various instruments with maturities of three months or less at the time of purchase as cash and cash equivalents. At September 30, 2018 and December 31, 2017, cash and cash equivalents consisted principally of U.S. Treasury notes, amounts held in money market funds and cash on deposit at commercial banks.

Short-term Investments

The Company generally invests its excess cash in money market funds and short-term investments in U.S. Treasury notes. Such investments included in short-term investments on the Company's consolidated balance sheets are considered available-for-sale and are reported at fair value with unrealized gains and losses included as a component of shareholders’ equity (deficit). Realized gains and losses, if any, on short-term investments are included in interest income (expense), net.

The Company evaluates its short-term investments with unrealized losses for other-than-temporary impairment. When assessing short-term investments for other-than-temporary declines in value, the Company considers such factors as, among other things, how significant the decline in value is as a percentage of the original cost, the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions in general. If any adjustment to fair value reflects a decline in the value of the investment that the Company considers to be “other than temporary,” the Company reduces the investment to fair value through a charge to the consolidated statement of operations and comprehensive loss. No such adjustments were necessary during the periods presented.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and short-term investments. At September 30, 2018 and December 31, 2017, all of the Company’s cash, cash equivalents and short-term investments were held at two financial institutions. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash, cash equivalents and short-term investments and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Restricted Cash

Restricted cash as of December 31, 2017 consisted of cash held in a money market fund in connection with the Company’s corporate credit cards. Restricted cash amounts have been classified as current assets based on the expected release date of the restrictions.

In conjunction with the Company’s lease agreement entered into in March 2018 (see Note 11), the Company maintains a letter of credit for the benefit of the landlord. As of September 30, 2018, the underlying cash balance of $210 securing this letter of credit, was classified as non‑current in its consolidated balance sheet.

Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s restricted cash, which is held in a money market fund, is carried at fair value, determined based on Level 1 inputs in the fair value hierarchy described above (see Note 3). The Company’s cash equivalents and short-term investments, consisting of money market funds and U.S. Treasury notes, are carried at fair value, determined based on Level 1 and 2 inputs in the fair value hierarchy described above (see Note 3). The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these assets and liabilities.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, share‑based compensation expense, allocated facility‑related and depreciation expenses, third‑party license fees and external costs of outside vendors engaged to conduct pre-clinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non‑refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with companies both inside and outside of the United States. The related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company's estimates. The Company's historical accrual estimates have not been materially different from the actual costs.

Share‑Based Compensation

The Company measures all share-based awards granted to employees and directors based on their fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are accounted for as they occur. The Company issues share-based awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company has not issued any share-based awards with performance-based vesting conditions.

For share-based awards granted to consultants and non-employees, compensation expense is recognized over the vesting period of the awards, which is generally the period during which services are rendered by such consultants and non-employees until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company's Class A common shares and updated assumption inputs in the Black-Scholes option-pricing model.

The Company classifies share-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.

The fair value of each restricted share award is estimated on the date of grant based on the fair value of the Company’s Class A or Class B common shares on that same date. The fair value of each option grant is estimated using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the award, the risk-free interest rate, and expected dividends (see Note 8). Prior to May 2018, the Company was a private company and, accordingly, lacks company-specific historical and implied volatility information for its shares. Therefore, it estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

Net Income (Loss) per Share

The Company follows the two‑class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The two‑class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two‑class method requires income available to common shareholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

Basic net income (loss) per share attributable to common shareholders is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) attributable to common shareholders is computed by adjusting net income (loss) attributable to common shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common shareholders is computed by dividing the diluted net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding options, unvested restricted common shares and convertible preferred shares are considered potential dilutive common shares.

Prior to the closing of it’s IPO, when the Company’s convertible preferred shares converted to common shares, the Company's convertible preferred shares contractually entitled the holders of such shares to participate in dividends but did not contractually require the holders of such shares to participate in losses of the Company. Accordingly, for periods in which the Company reported a net loss attributable to common shareholders, such losses were not allocated to convertible preferred shareholders. In periods in which the Company reports a net loss attributable to common shareholders, diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common shareholders for the three and nine months ended September 30, 2018 and 2017.

The Company identified an error in its calculation of weighted average shares for certain shares issued and outstanding during the three and six months ended June 30, 2018, which is not considered material to the previously issued financial statements, however the Company will revise the three and six month periods ended June 30, 2018 the next time they are presented. This revision did not impact the loss per share for the three months ended September 30, 2018, however it resulted in an increase of $0.09 loss per share for the nine months ended September 30, 2018 compared to what the Company disclosed in its press release dated November 1, 2018.

Recently Adopted Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” ASU 2018-07 aligns the accounting for share-based payment awards issued to employees and nonemployees as well as improves financial reporting for share-based payments to nonemployees. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years and will be applied to all new option awards granted after the date of adoption. Early adoption is permitted. The Company elected to early adopt ASU 2017-09 effective as of January 1, 2018 and applied it to share-based payment awards issued during the nine months ended September 30, 2018. The adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"), which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2017-09 as of the required effective date of January 1, 2018. The adoption of ASU 2017-09 will have an impact on the modification of stock-based awards, if any, after the date of adoption. The adoption of ASU 2017-09 did not have an impact on the Company's financial position, results of operations or cash flows.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230) ("ASU 2016-15"). This guidance addresses diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The standard is effective for public entities for fiscal years beginning after December 15, 2017, including interim periods in those fiscal years, and early adoption is permitted. The adoption of ASU 2016-15 is required to be applied retrospectively. The Company adopted ASU 2017-09 on the required effective date of January 1, 2018, and the adoption did not have an impact on the Company's financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which supersedes existing revenue recognition guidance under GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard defines a five-step process to achieve this principle, and will require companies to use more judgment and make more estimates than under the current guidance. The Company expects that these judgments and estimates will include identifying performance obligations in the customer contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 such that the standard is effective for public entities for annual periods beginning after December 15, 2017 and for interim periods within those fiscal years. Early adoption of the standard is permitted for annual periods beginning after December 15, 2016. The FASB subsequently issued amendments to ASU 2014-09 that have the same effective date and transition date. The Company adopted ASU 2014-09 as of the required effective date of January 1, 2018 and the adoption did not have an impact on the Company's consolidated financial statements as the Company does not currently have any revenue-generating arrangements.

Recently Issued Accounting Pronouncements

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) (Part I) Accounting for Certain Financial Instruments with Down Round Features (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down-round features. Part II replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. ASU 2017-11 is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU 2017-11 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The guidance is effective for public entities for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years, and early adoption is permitted. The Company is still evaluating the full impact this standard will have on its consolidated financial statements and related disclosures, but expects to recognize substantially all of its leases on the balance sheet as of January 1, 2019, which is the Company’s adoption date, by recording a right-of-use asset and a corresponding lease liability.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned U.S. subsidiary, Kiniksa Pharmaceuticals Corp. (“Kiniksa US”), after elimination of all significant intercompany accounts and transactions.

In assessing the consolidation requirement for variable interest entities (“VIEs”), the Company focuses on identifying whether it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE. In the event that the Company is the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE would be included in the Company’s consolidated financial statements. At December 31, 2016 and 2017 and during the years then ended, the Company was not the primary beneficiary of a VIE.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of common shares and share‑based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company classifies deposits in banks, money market funds and cash invested temporarily in various instruments with maturities of three months or less at the time of purchase as cash and cash equivalents. At December 31, 2016 and 2017, cash and cash equivalents consisted principally of U.S. Treasury notes, amounts held in money market accounts and cash on deposit at commercial banks.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. At December 31, 2016 and 2017, all of the Company’s cash and cash equivalents were held at two financial institutions. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Restricted Cash

Restricted cash classified as a current asset as of December 31, 2016 and 2017 includes cash held in a money market fund in connection with the Company’s corporate credit cards. These amounts have been classified as current assets based on the contractual release date of the restrictions.

Property and Equipment

Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheet and any resulting gains or losses are included in the consolidated statement of operations and comprehensive loss in the period of disposal. The expected useful lives of the respective assets are as follows:


		Estimated Useful Life
Computer hardware and software		3 - 5 years
Vehicles		5 years
Laboratory and facility equipment		5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		Shorter of estimated useful life or lease term

Impairment of Long-Lived Assets

Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets.

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process preferred share or common equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to the carrying value of convertible preferred shares or in shareholders’ equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations and comprehensive loss. The Company recorded deferred offering costs related to the sale of convertible preferred shares of $8 and $25 as of December 31, 2016 and 2017, respectively.

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

The Company’s restricted cash, which is held in a money market fund, is carried at fair value, determined based on Level 1 inputs in the fair value hierarchy described above (see Note 3). The Company’s cash equivalents, consisting of money market accounts and U.S. Treasury notes, are carried at fair value, determined based on Level 1 and 2 inputs in the fair value hierarchy described above (see Note 3). The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these assets and liabilities.

Segment Information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on developing and delivering therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, share‑based compensation expense, allocated facility‑related and depreciation expenses, third‑party license fees and external costs of outside vendors engaged to conduct clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non‑refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with companies both inside and outside of the United States. The related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Patent Costs

The Company charges patent-related costs in connection with filing and prosecuting patent applications to operations as incurred as their realization is uncertain. These costs are classified as general and administrative expenses.

Share‑Based Compensation

The fair value of each restricted share award is estimated on the date of grant based on the fair value of the Company’s Class A or Class B common shares on that same date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the award, the risk-free interest rate, and expected dividends (see Note 8). The Company historically has been a private company and lacks company-specific historical and implied volatility information for its shares. Therefore, it estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in shareholders’ equity (deficit) that result from transactions and economic events other than those with shareholders. There was no difference between net loss and comprehensive loss for each of the periods presented in the accompanying consolidated financial statements.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. To date, the Company has not taken any uncertain tax positions or recorded any reserves, interest or penalties.

Net Income (Loss) per Share

The Company’s convertible preferred shares contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common shareholders, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to common shareholders, diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common shareholders for the years ended December 31, 2016 and 2017.

Recently Adopted Accounting Pronouncements

In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2017-09 as of the required effective date of January 1, 2018. The adoption of ASU 2017-09 will have an impact on the modification of stock-based awards, if any, after the date of adoption. The adoption of ASU 2017-09 did not have an impact on the Company’s financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The ASU is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company adopted this standard effective as of January 1, 2016 and applied it to its license and asset purchase agreements during the years ended December 31, 2016 and 2017 (see Note 9).

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years and should be applied using a retrospective transition method to each period presented. Early adoption is permitted. The Company elected to early adopt ASU 2016-18 effective as of January 1, 2017 and has reflected the adoption retrospectively to all periods presented in its consolidated financial statements. As a result, the Company’s consolidated statements of cash flows include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the such statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This guidance addresses diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods in those fiscal years, and early adoption is permitted. The adoption of ASU 2016-15 is required to be applied retrospectively. The Company adopted ASU 2017-09 as of the required effective date of January 1, 2018, and the adoption did not have an impact on the Company’s consolidated statement of cash flows.

In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 addresses several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross share compensation expense with actual forfeitures recognized as they occur, and classification on the statement of cash flows. Certain of these changes are required to be applied retrospectively, while other changes are required to be applied prospectively. The Company adopted ASU 2016‑09 effective as of January 1, 2016 and elected prospectively to account for forfeitures as they occur rather than apply an estimated forfeiture rate to share-based compensation expense. The adoption of ASU 2016-09 did not have a material impact on the Company’s financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 requires deferred tax liabilities and assets to be classified as non‑current in the consolidated balance sheet. The amendment may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted ASU 2015-17 effective as of January 1, 2016 and has reflected the adoption retrospectively to all periods presented in its consolidated financial statements. The adoption of ASU 2015-17 did not have a material impact on the Company’s financial position, results of operations or cash flows.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). The amendments in this update explicitly require a company’s management to assess if there is substantial doubt about an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements and to provide related footnote disclosures in certain circumstances. The Company adopted ASU 2014-15 effective as of January 1, 2016. This guidance relates to footnote disclosure only and its adoption had no impact on the Company’s financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard defines a five-step process to achieve this principle, and will require companies to use more judgment and make more estimates than under the current guidance. The Company expects that these judgments and estimates will include identifying performance obligations in the customer contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 such that the standard is effective for public entities for annual periods beginning after December 15, 2017 and for interim periods within those fiscal years. The FASB subsequently issued amendments to ASU 2014-09 that have the same effective date and transition date. The Company adopted ASU 2014-09 as of the required effective date of January 1, 2018 and the adoption did not have an impact on the Company’s consolidated financial statements as the Company does not currently have any revenue-generating arrangements.

Recently Issued Accounting Pronouncements

In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”). Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down-round features. Part II replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. ASU 2017-11 is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU 2017-11 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The guidance is effective for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements.

Fair Value of Financial Assets and Liabilities

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

Short-term investments as of September 30, 2018 consisted of U.S. Treasury notes all of which are due within six months. As of September 30, 2018, the fair value of short-term investments was $268,200 of which the amortized cost was $268,255 and gross unrealized loss was $55. The Company did not have any short-term investments as of December 31, 2017.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:


	Fair Value Measurements
	as of September 30, 2018 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		5,299		—		—		5,299
Cash equivalents — U.S. Treasury notes		—		15,336		—		15,336
Short-term investments - U.S. Treasury notes		—		268,200		—		268,200
	$	5,509	$	283,536	$	—	$	289,045


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587

During the periods ended September 30, 2018 and December 31, 2017 there were no transfers between Level 1, Level 2 and Level 3.

The money market funds were valued using quoted prices in active markets, which represent a Level 1 measurement in the fair value hierarchy. The Company's cash equivalents and short-term investments as of September 30, 2018 and cash equivalents as of December 31, 2017 also consisted of U.S. Treasury notes, which are not traded on a daily basis and, therefore, represent a Level 2 measurement in the fair value hierarchy at each period end.

3. Fair Value of Financial Assets and Liabilities


	Fair Value Measurements
	as of December 31, 2016 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		550		—		—		550
Cash equivalents — U.S. Treasury notes		—		52,504		—		52,504
	$	655	$	52,504	$	—	$	53,159


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587

During the years ended December 31, 2016 and 2017, there were no transfers between Level 1, Level 2 and Level 3.

The money market funds were valued using quoted prices in active markets, which represent a Level 1 measurement in the fair value hierarchy. The Company’s cash equivalents as of December 31, 2016 and 2017 also consisted of U.S. Treasury notes, which are not traded on a daily basis and, therefore, represent a Level 2 measurement in the fair value hierarchy at each period end.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Property and Equipment, Net

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Property and Equipment, Net

4. Property and Equipment, Net

Property and equipment, net consisted of the following:


	September 30,		December 31,
	2018		2017
Furniture and fixtures	$	6	$	83
Computer hardware and software		94		9
Vehicles		85		85
Construction in progress		2,241		—
		2,426		177
Less: Accumulated depreciation		(66)		(52)
	$	2,360	$	125

During the nine months ended September 30, 2018, the Company initiated the construction of a laboratory at Kiniksa US’s headquarters. Construction in progress is primarily comprised of leasehold improvements and lab equipment which the Company anticipates will be placed into service by the end of 2018.

Depreciation expense was $12 and $8 during the three months ended September 30, 2018 and 2017, respectively, and $32 and $20 during the nine months ended September 30, 2018 and 2017, respectively.

4. Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,
	2016		2017
Furniture and fixtures	$	14	$	83
Computer hardware and software		9		9
Vehicles		85		85
		108		177
Less: Accumulated depreciation		(24)		(52)
	$	84	$	125

Depreciation expense for the years ended December 31, 2016 and 2017 was $22 and $28, respectively.

Accrued Expenses

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Convertible Preferred Shares

Accrued Expenses

5. Accrued Expenses

Accrued expenses consisted of the following:


	September 30,		December 31,
	2018		2017
Accrued employee compensation and benefits	$	3,160	$	1,570
Accrued research and development expenses		9,313		3,905
Accrued legal and professional fees		548		688
Other		332		49
	$	13,353	$	6,212

5. Accrued Expenses

Accrued expenses consisted of the following:


	December 31,
	2016		2017
Accrued employee compensation and benefits	$	986	$	1,570
Accrued research and development expenses		979		3,905
Accrued legal and professional fees		122		688
Other		3		49
	$	2,090	$	6,212

Convertible Preferred Shares

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Convertible Preferred Shares

6. Convertible Preferred Shares

As of December 31, 2017, the Company’s bye-laws, as amended and restated, designated 22,885,492 authorized shares to be issued as convertible preferred shares with a par value of $0.000273235 per share, of which 17,128,120 shares were further designated as Series A convertible preferred shares (the “Series A preferred shares”) and 5,757,372 shares were further designated as Series B convertible preferred shares (the "Series B preferred shares"). In February 2018, the Company’s bye-laws were further amended and restated to, among other things, effect an increase in the number of authorized convertible preferred shares with a par value of $0.000273235 per share to 35,670,093 shares, of which 12,784,601 shares were further designated as Series C convertible preferred shares (the "Series C preferred shares"). The holders of convertible preferred shares had liquidation rights in the event of a deemed liquidation that, in certain situations, was not solely within the control of the Company. Therefore, the Series A, Series B and Series C convertible preferred shares (collectively, the “Preferred Shares”) were classified outside of shareholders' equity (deficit).

In October 2015, the Company issued and sold 8,028,809 Series A preferred shares at a price of $4.6707 per share (the “Series A Original Issue Price”) for proceeds of $37,398, net of issuance costs of $102.

In September 2016, the Company issued and sold an additional 9,099,311 Series A preferred shares at a price of $4.6707 per share for proceeds of $42,499, net of issuance costs of $1.

In March 2017, the Company issued and sold 5,757,372 Series B preferred shares at a price of $6.9475 per share (the “Series B Original Issue Price”) for proceeds of $39,873, net of issuance costs of $127.

In February 2018, the Company issued and sold 12,784,601 Series C preferred shares at a price of $15.6438 per share (the “Series C Original Issue Price”) for proceeds of $190,822, net of issuance costs of $9,178.

In May 2018, upon the completion of the Company’s IPO (which qualified as a “Qualified IPO” under the Company’s bye-laws, as amended and restated), all of the outstanding Preferred Shares were converted into 5,546,019 Class A common shares, 1,070,502 Class B common shares, 12,995,954 Class A1 common shares and 16,057,618 Class B1 common shares in accordance with the Company’s bye-laws, as amended and restated. In connection with the completion of its IPO in May 2018, the Company amended and restated its bye-laws (the “Amended & Restated Bye-Laws”) to, among other things, authorize the issuance of undesignated preferred shares. As of September 30, 2018, no preferred shares were designated or issued.

Prior to the conversion to common shares, the holders of the Preferred Shares had the following rights and preferences:

Voting

The holders of Preferred Shares were entitled to vote, together with the holders of common shares, on all matters submitted to shareholders for a vote. The holders of Series A preferred shares were entitled to the number of votes per Series A preferred share equal to the number of whole Class B common shares into which the Series A preferred shares were convertible at the time of such vote (which is ten votes for each Class B common share). The holders of Series B preferred shares were entitled to the number of Votes per Series B preferred share equal to the number of whole Class A common shares into which the Series B preferred shares were convertible at the time of such vote (which is one vote for each Class A common share). Except as provided by law or by the other provisions of the Company’s bye-laws, holders of Preferred Shares voted together with the holders of common shares as a single class.

The holders of Preferred Shares, voting together as a single class, were entitled to elect two directors of the Company. The holders of Preferred Shares, voting together with the holders of common shares as a single class, were entitled to elect the remaining directors of the Company, except for the one director that the holders of Class A common shares and Class B common shares, voting together as a single class were entitled to elect.

Conversion

Each Series A preferred share was convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, in such manner as is permitted by Bermuda law, into such number of fully paid and non-assessable Class B common shares as is determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined below) in effect at the time of conversion. Each Series B preferred share was convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, in such manner as is permitted by Bermuda law, into such number of fully paid and non-assessable Class A common shares as is determined by dividing the Series B Original Issue Price by the Series B Conversion Price (as defined below) in effect at the time of conversion. Each Series C preferred share was convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, in such manner as is permitted by Bermuda law, into such number of fully paid and non-assessable Class A Shares as is determined by dividing the Series C Original Issue Price by the Series C Conversion Price (as defined below) in effect at the time of conversion.

The Series A Original Issue Price and Series A Conversion Price were equal to $4.6707. The Series B Original Issue Price and Series B Conversion Price were equal to $6.9475. The Series C Original Issue Price and Series C Conversion Price were equal to $15.6438. Each Series A preferred share was convertible into one Class B common share, each Series B preferred share was convertible into one Class A common share and each Series C preferred share was convertible into one Class A common share.

Further, upon either (i) the closing of the sale of Class A common shares or Class B common shares to the public at a price of at least $15.6438 per share (subject to appropriate adjustment in the event of any share dividend, share split, combination or other similar recapitalization with respect to the applicable class of common shares) in an initial public offering resulting in at least $100,000 of gross proceeds to the Company (a “Qualified IPO”) or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of a majority of the outstanding Preferred Shares, voting together as a single class on an as if converted to Class A common shares basis, all outstanding Series A preferred shares would automatically be converted, in such manner as is permitted pursuant to Bermuda law, into Class B common shares at the then effective conversion rate, and all outstanding Series B and Series C preferred shares would automatically be converted, in such manner as is permitted pursuant to Bermuda law, into Class A common shares at the then effective conversion rate. Notwithstanding the foregoing, in the event of a mandatory conversion of preferred shares as a result of a Qualified IPO, (a) holders of Series A preferred shares could elect to receive Class B1 common shares in lieu of Class B common shares and (b) holders of Series B and Series C preferred shares could elect to receive Class A1 common shares in lieu of Class A common shares.

Dividends

The holders of the Preferred Shares were entitled to receive noncumulative dividends when and if declared by Company’s board of directors. The Company was not permitted to declare, pay or set aside any dividends on any other class or series of shares of the Company, other than dividends on common shares payable in common shares, unless the holders of the Preferred Share first receive, or simultaneously receive, a dividend on each outstanding Preferred Share equal to (i) in the case of a dividend on any class of common shares or any class or series that is convertible into common shares, that dividend per Preferred Share as would equal the product of (a) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into common shares and (b) the number of common shares issuable upon conversion of a share the applicable series of Preferred Shares, or (ii) in the case of a dividend on any class or series that is not convertible into common shares, at a rate per Preferred Share determined by (a) dividing the amount of the dividend payable on each share of such class or series of shares by the original issue price of such class or series (subject to appropriate adjustment in the event of any bonus share, share dividend, share split, combination of or other similar recapitalization with respect to such class or series) and (b) multiplying such fraction by an amount equal to the applicable Series A, Series B or Series C Original Issue Price. Prior to the Company’s IPO, no cash dividends had been declared or paid.

Liquidation Preference

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event (as defined below), the holders of Preferred Shares then outstanding were entitled to be paid out of the assets of the Company available for distribution to its shareholders, on a pari passu basis, before any payment shall be made to the holders of common shares by reason of their ownership thereof, an amount per share equal to the greater of (i) one times the applicable Original Issue Price, plus any dividends declared but unpaid thereon, and (ii) such amount per share as would have been payable had all Preferred Shares been converted into common shares immediately prior to such liquidation, dissolution, winding up or deemed liquidation event. Thereafter, the remaining assets of the Company available for distribution to its shareholders would be distributed among the holders of common shares, pro rata based on the number of shares held by each such holder.

If upon any such liquidation, dissolution or winding up of the Company or deemed liquidation event, the assets of the Company available for distribution to its shareholders were insufficient to pay the holders of Preferred Shares the full amount to which they shall be entitled, the holders of Preferred Shares would share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by such holders of Preferred Shares upon such distribution if all amounts payable on or with respect to such shares were paid in full.

Unless a majority of the holders of the then outstanding Preferred Shares elected otherwise, a deemed liquidation event would include a merger or consolidation (other than one in which shareholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring company or corporation) or a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company.

Redemption

The Company’s bye-laws, as amended and restated, did not provide redemption rights to the holders of Preferred Shares.

6. Convertible Preferred Shares

As of December 31, 2017, the Company’s bye-laws, as amended and restated (the “Amended Bye-Laws”), designated 22,885,492 authorized shares to be issued as convertible preferred shares with a par value of $0.000273235 per share, of which 17,128,120 shares have been further designated as Series A convertible preferred shares (the “Series A preferred shares”) and 5,757,372 shares have been further designated as Series B convertible preferred shares (the "Series B preferred shares").The holders of preferred shares have liquidation rights in the event of a deemed liquidation that, in certain situations, are not solely within the control of the Company. Therefore, the Series A and Series B preferred shares (collectively, the “Preferred Shares”) are classified outside of shareholders' equity (deficit).

In September 2016, the Company issued and sold an additional 9,099,311 Series A preferred shares at a price of $4.6707 per share for proceeds of $42,499, net of issuance costs of $1.

In February 2018, the Company issued and sold 12,784,601 Series C convertible preferred shares at a price of $15.6438 per share (the “Series C Original Issue Price”) for proceeds of $190,822, net of issuance costs of $9,178.

As of each balance sheet date, the Preferred Shares consisted of the following:

December 31, 2016

Preferred

Common Shares

Issued and

Carrying

Liquidation

Issuable Upon

Designated

Outstanding

Value

Preference

Conversion

Series A preferred shares

17,128,120

79,897

80,000

17,128,120


	December 31, 2017
		Preferred
	Preferred	Shares					Common Shares
	Shares	Issued and	Carrying		Liquidation		Issuable Upon
	Designated	Outstanding	Value		Preference		Conversion
Series A preferred shares	17,128,120	17,128,120	$	79,897	$	80,000	17,128,120
Series B preferred shares	5,757,372	5,757,372		39,873		40,000	5,757,372
	22,885,492	22,885,492	$	119,770	$	120,000	22,885,492

The holders of the Preferred Shares have the following rights and preferences:

Voting

The holders of Preferred Shares are entitled to vote, together with the holders of common shares, on all matters submitted to shareholders for a vote. The holders of Series A preferred shares are entitled to the number of votes per Series A preferred share equal to the number of whole Class B common shares into which the Series A preferred shares are convertible on the record date determining shareholders entitled to participate in such vote (which is ten votes for each Class B common share). The holders of Series B preferred shares are entitled to the number of votes per Series B preferred share equal to the number of whole Class A common shares into which the Series B preferred shares are convertible on the record date determining shareholders entitled to participate in such vote (which is one vote for each Class A common share). Except as provided by law or by the other provisions of the Amended Bye-Laws, holders of Preferred Shares vote together with the holders of common shares as a single class.

The holders of Preferred Shares, voting together as a single class, are entitled to elect two directors of the Company. The holders of Preferred Shares, voting together with the holders of common shares as a single class, are entitled to elect the remaining directors of the Company, except for the one director that the holders of Class A common shares and Class B common shares, voting together as a single class, are entitled to elect.

Conversion

Each Series A preferred share shall be convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, in such manner as is permitted by Bermuda law, into such number of fully paid and non-assessable Class B common shares as is determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined below) in effect at the time of conversion. Each Series B preferred share shall be convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, in such manner as is permitted by Bermuda law, into such number of fully paid and non-assessable Class A common shares as is determined by dividing the Series B Original Issue Price by the Series B Conversion Price (as defined below) in effect at the time of conversion.

The Series A Original Issue Price and Series A Conversion Price were equal to $4.6707 as of December 31, 2016 and 2017. The Series B Original Issue Price and Series B Conversion Price were equal to $6.9475 as of December 31, 2017. Such Series A and Series B Original Issue Prices and Series A and Series B Conversion Prices, and the rate at which each series of preferred shares may be converted into common shares, are subject to adjustment from time to time to reflect future share dividends, splits, combinations, recapitalizations and similar events. The Series A and Series B Conversion Prices are also subject to adjustments based on weighted-average anti-dilution provisions set forth in the Amended Bye-Laws in the event that additional securities are issued at a purchase price less than the Series A Conversion Price and/or the Series B Conversion Price then in effect. As of December 31, 2016 and 2017, each Series A preferred share was convertible into one Class B common share. As of December 31, 2017, each Series B preferred share was convertible into one Class A common share.

Upon either (a) the closing of the sale of Class A common shares or Class B common shares to the public at a price of at least $14.0120 per share (subject to appropriate adjustment in the event of any share dividend, share split, combination or other similar recapitalization with respect to the applicable class of common shares) in an initial public offering resulting in at least $100,000 of gross proceeds to the Company (a “Qualified IPO”) or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of a majority of the outstanding Preferred Shares, voting together as a single class on an as-if-converted to Class A common shares basis, all outstanding Series A preferred shares shall automatically be converted, in such manner as is permitted pursuant to Bermuda law, into Class B common shares at the then effective conversion rate, and all outstanding Series B preferred shares shall automatically be converted, in such manner as is permitted pursuant to Bermuda law, into Class A common shares at the then effective conversion rate. In the event of a mandatory conversion of preferred shares as a result of a Qualified IPO, (i) holders of Series A preferred shares may elect to receive Class B1 common shares in lieu of Class B common shares and (ii) holders of Series B preferred shares may elect to receive Class A1 common shares in lieu of Class A common shares.

Dividends

The holders of the Preferred Shares are entitled to receive noncumulative dividends when and if declared by Company’s board of directors. The Company may not declare, pay or set aside any dividends on any other class or series of shares of the Company, other than dividends on common shares payable in common shares, unless the holders of the Preferred Share first receive, or simultaneously receive, a dividend on each outstanding Preferred Share equal to (A) in the case of a dividend on any class of common shares or any class or series that is convertible into common shares, that dividend per Preferred Share as would equal the product of (1) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into common shares and (2) the number of common shares issuable upon conversion of a share the applicable series of Preferred Shares, or (B) in the case of a dividend on any class or series that is not convertible into common shares, at a rate per Preferred Share determined by (1) dividing the amount of the dividend payable on each share of such class or series of shares by the original issue price of such class or series (subject to appropriate adjustment in the event of any bonus share, share dividend, share split, combination of or other similar recapitalization with respect to such class or series) and (2) multiplying such fraction by an amount equal to the applicable Series A or Series B Original Issue Price. Through December 31, 2016 and 2017, no cash dividends have been declared or paid.

Liquidation Preference

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event (as defined below), the holders of Preferred Shares then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its shareholders, on a pari passu basis, before any payment shall be made to the holders of common shares by reason of their ownership thereof, an amount per share equal to the greater of (i) one times the applicable Series A or Series B Original Issue Price, plus any dividends declared but unpaid thereon, and (ii) such amount per share as would have been payable had all Preferred Shares been converted into common shares immediately prior to such liquidation, dissolution, winding up or deemed liquidation event. Thereafter, the remaining assets of the Company available for distribution to its shareholders shall be distributed among the holders of common shares, pro rata based on the number of shares held by each such holder.

If upon any such liquidation, dissolution or winding up of the Company or deemed liquidation event, the assets of the Company available for distribution to its shareholders shall be insufficient to pay the holders of Preferred Shares the full amount to which they shall be entitled, the holders of Preferred Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by such holders of Preferred Shares upon such distribution if all amounts payable on or with respect to such shares were paid in full.

Unless a majority of the holders of the then outstanding Preferred Shares, on an as-if-converted to Class A common shares basis, elect otherwise, a deemed liquidation event shall include a merger or consolidation (other than one in which shareholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring company or corporation) or a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company.

Redemption

The Amended Bye-Laws do not provide redemption rights to the holders of Preferred Shares.

Common Shares	9 Months Ended	12 Months Ended
Common Shares	Sep. 30, 2018	Dec. 31, 2017
Common Shares
Common Shares	7. Common Shares As of December 31, 2017, the Company’s bye-laws, as amended and restated, authorized the Company to issue 43,918,239 total shares with a par value of $0.000273235, of which 5,507,938 and 3,568,353 shares were designated as Class A and Class B common shares, respectively. In February 2018, the Company’s bye-laws were further amended and restated to, among other things, effect an increase in the number of authorized common shares to 44,746,463 shares, of which 5,507,938 shares were designated as Class A common shares and 3,568,353 shares were designated as Class B common shares. The remaining 11,956,456 shares that were not designated as common shares or Preferred Shares as of December 31, 2017 could have been designated to any class at any time in the future by the Company’s board of directors. No Class A1 common shares or Class B1 common shares were designated as of December 31, 2017. On May 23, 2018, the Company’s registration statement on Form S-1 relating to the IPO was declared effective by the SEC. On May 29, 2018, the Company completed the IPO of 8,477,777 Class A common shares at $18.00 per share for gross proceeds of $152,600. In addition, on June 22, 2018, the Company completed the sale of 1,006,425 Class A common shares to the underwriters of the IPO following the exercise of their over-allotment option to purchase additional shares at $18.00 per share for gross proceeds of $18,116. The aggregate net proceeds to the Company from the IPO, inclusive of the over-allotment option exercise, was $155,536 after deducting underwriting discounts and commissions and other offering costs. In May 2018, upon completion of the IPO (which qualified as a “Qualified IPO” under the Company’s bye-laws, as amended and restated), all outstanding Preferred Shares were converted into 5,546,019 Class A common shares, 1,070,502 Class B common shares, 12,995,954 Class A1 common shares and 16,057,618 Class B1 common shares in accordance with the Company’s bye-laws, as amended and restated. In connection with the completion of the IPO in May 2018, the Company increased the authorized capital of the Company to $54,647 consisting of 200,000,000 shares of $0.000273235 par value per share and, among other things, amended the description of different classes of shares under the Company’s Amended & Restated Bye-Laws. The rights of the holders of the Company’s Class A common shares, Class B common shares, Class A1 common shares and Class B1 common shares are identical, except with respect to voting and conversion, as described below. As of December 31, 2017, the voting, dividend and liquidation rights of the holders of the Company’s common shares were subject to and qualified by the rights, powers and preferences of the holders of the Preferred Shares as set forth above. In May 2018, following the conversion of the Preferred Shares into common shares, the voting, dividend and liquidation rights of the holders of the Company’s common shares were then subject to and qualified by the rights, powers and preferences of the holders of the preferred shares. As of September 30, 2018, no preferred shares were designated or issued. Voting Each Class A common share entitles the holder to one vote on all matters submitted to the shareholders for a vote. Each Class B common share entitles the holder to ten votes on all matters submitted to the shareholders for a vote. Holders of Class A1 common shares or Class B1 common shares have no voting rights. As of December 31, 2017, the holders of the Class A and Class B common shares, voting together as a single class, were entitled to elect one director of the Company. The holders of the Class A and Class B common shares, voting together with the holders of the Preferred Shares, voting together as a single class, were entitled to elect the remaining directors of the Company, except for the two directors of the Company that the holders of the Preferred Shares, voting together as a single class, were entitled to elect. In May 2018, following the conversion of the Preferred Shares into common shares, the holders of Class A and Class B common shares, voting together as a single class, are entitled to elect the directors of the Company. Dividends Common shareholders are entitled to receive dividends, as may be declared by the board of directors. As of December 31, 2017, these dividends were subject to the preferential dividend rights of the holders of the Company’s Preferred Shares. In May 2018, following the conversion of the Preferred Shares into common shares, these dividends are subject to the rights, powers and preferences of the preferred shares. As of September 30, 2018, no preferred shares were designated or issued. Through December 31, 2017 and September 30, 2018, no cash dividends have been declared or paid. Conversion Each Class B common share shall automatically convert into one Class A common share upon certain transfers of such shares by the holder thereof (subject to certain exceptions). Each Class B common share is convertible, at the holder’s election into one Class A common share or one Class B1 common share. Each Class A1 common share is convertible into one Class A common share at the holder’s election. Each Class B1 common share is convertible into one Class A common share or one Class B common share at the holder’s election. There are no conversion rights associated with the Company’s Class A common shares.	7. Common Shares As of December 31, 2016, and 2017, the Amended Bye‑Laws authorized the Company to issue 43,918,239 total shares with a par value of $0.000273235, of which 4,491,921 and 5,507,938 shares have been designated as Class A common shares as of December 31, 2016 and 2017, respectively, and 3,568,353 shares have been designated as Class B common shares as of December 31, 2016 and 2017. The remaining 18,729,845 and 11,956,456 shares that were not designated as common shares or Preferred Shares as of December 31, 2016 and 2017, respectively, may be designated to any class at any time in the future by the Company’s board of directors. No Class A1 common shares or Class B1 common shares were designated as of December 31, 2016 and 2017. The rights of the holders of the Company’s Class A common shares, Class B common shares, Class A1 common shares and Class B1 common shares are identical, except with respect to voting and conversion, as described below. The voting, dividend and liquidation rights of the holders of the Company’s common shares are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Shares as set forth above. Voting Each Class A common share entitles the holder to one vote on all matters submitted to the shareholders for a vote. Each Class B common share entitles the holder to ten votes on all matters submitted to the shareholders for a vote. Holders of Class A1 common shares or Class B1 common shares have no voting rights. The holders of Class A and Class B common shares, voting together as a single class, are entitled to elect one director of the Company. Dividends Common shareholders are entitled to receive dividends, as may be declared by the board of directors. These dividends are subject to the preferential dividend rights of the holders of the Company’s Preferred Shares. Through December 31, 2016 and 2017, no cash dividends have been declared or paid. Conversion Each Class B common share shall automatically convert into one Class A common share upon certain transfers of such shares by the holder thereof (subject to certain exceptions). Each Class B common share shall be convertible, at the holder’s election and at any time into one Class A common share or one Class B1 common share. Each Class A1 common share is convertible into one Class A common share at the holder’s election. Each Class B1 common share is convertible into one Class A common share or one Class B common share at the holder’s election. There are no conversion rights associated with the Company’s Class A common shares.

Share Based Compensation

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Share-Based Compensation

8. Share‑Based Compensation

2018 Incentive Award Plan

In May 2018, the Company's board of directors and shareholders approved the 2018 Incentive Award Plan (the "2018 Plan"), which became effective on May 23, 2018. On the effectiveness of the 2018 Plan, the Company ceased granting awards under its 2015 Equity Incentive Plan (as amended, the “2015 Plan”).

The 2018 Plan provides for the grant of incentive options, nonqualified options, share appreciation rights, restricted shares, dividend equivalents, restricted share units and other share- or cash-based awards. A total of 4,466,500 Class A common shares were initially reserved for issuance under the 2018 Plan. The number of Class A common shares that may be issued under the 2018 Plan will automatically increase on each January 1, beginning with the fiscal year ending December 31, 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (i) 4% of the Class A common shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (ii) a smaller number of Class A common shares determined by the Company's board of directors. No more than 27,915,000 Class A common shares may be issued under the 2018 Plan upon the exercise of incentive options. The Class A common shares underlying any awards issued under the 2018 Plan or the 2015 Plan that on or after the effective date of the 2018 Plan expire, lapse unexercised or are terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited under the 2018 Plan or the 2015 Plan will be added back to the Class A common shares available for issuance under the 2018 Plan. As of September 30, 2018, 3,280,059 shares remained available for future grant.

2015 Equity Incentive Plan

Until May 23, 2018 (the effective date of the 2018 Plan), the Company’s 2015 Plan provided for the Company to grant qualified incentive options, nonqualified options, share grants and other share‑based awards to employees and non‑employees to purchase the Company’s Class A common shares. On the effective date of the 2018 Plan, the Company ceased granting awards under the 2015 Plan. At that time, the 4,691,213 shares of Class A common shares subject to outstanding awards under the 2015 Plan remained reserved for issuance under the plan pursuant such awards and the 92,170 shares of Class A common shares that had been available for future grant under the 2015 Plan were no longer authorized and reserved for issuance or available for future grant under the 2015 Plan.

As of December 31, 2017, the total number of Class A common shares authorized to be issued under the 2015 Plan was 4,794,266 shares and 1,644,893 shares were available for future grant. As of September 30, 2018, there were 4,620,850 shares of Class A common shares subject to outstanding awards under the plan authorized and reserved for issuance under the 2015 Plan pursuant such awards and no Class A common shares were otherwise authorized and reserved for issuance or available for future grant under the 2015 Plan as it was replaced by the 2018 Plan.

The exercise price for incentive options was determined by the board of directors. All incentive options granted to any person possessing 10% or less of the total combined voting power of all classes of shares could not have an exercise price of less than 100% of the fair market value of the Class A common shares on the grant date. All incentive options granted to any person possessing more than 10% of the total combined voting power of all classes of shares could not have an exercise price of less than 110% of the fair market value of the Class A common shares on the grant date. The option term for incentive awards could not be greater than 10 years. Incentive options granted to persons possessing more than 10% of the total combined voting power of all classes of shares could not have an option term of greater than five years. The vesting period for equity‑based awards is determined by the board of directors, which was generally four to six years. For awards granted to employees and non‑employees with four‑year vesting terms, 25% of the option vests on the first anniversary of the grant date and the remaining shares vest equally each month for three years thereafter. For awards granted to employees with six‑year vesting terms, 16% of the option vests on the first anniversary of the grant date and the remaining shares vest based on a predetermined vesting schedule for five years thereafter.

Shares that are expired, terminated, surrendered or canceled under the 2015 Plan without having been fully exercised will be available for future awards under the 2018 Plan.

Stock Option Grants During the Nine Months Ended September 30, 2018 and 2017

During the nine months ended September 30, 2018 and 2017, the Company granted options to purchase 2,887,639 and 1,434,156 Class A common shares, respectively, to employees and directors. The Company recorded share-based compensation expense for options granted to employees and directors of $1,414 and $321 during the three months ended September 30, 2018 and 2017, respectively, and $2,980 and $540 during the nine months ended September 30, 2018 and 2017, respectively.

During the nine months ended September 30, 2018, the Company granted options to purchase 4,000 Class A common shares to non-employees. During the nine months ended September 30, 2017, the Company granted 1,829 options to purchase Class A common shares to non-employees. The Company recorded share-based compensation expense for options granted to non-employees of $35 and $1 during the three months ended September 30, 2018 and 2017, respectively, and $87 and $10 during the nine months ended September 30, 2018 and 2017, respectively.

2018 Employee Share Purchase Plan

In May 2018, the Company's board of directors and shareholders approved the 2018 Employee Share Purchase Plan (the "2018 ESPP"), which became effective on May 23, 2018. A total of 670,000 Class A common shares were initially reserved for issuance under the 2018 ESPP. The number of Class A common shares that may be issued under the 2018 ESPP will automatically increase on each January 1, beginning with the fiscal year ending December 31, 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (i) 1% of the Class A common shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (ii) a smaller number of Class A common shares determined by the Company's board of directors, provided that no more than 6,420,000 Class A common shares may be issued under the 2018 ESPP.

Option Valuation

The assumptions that the Company used to determine the grant-date fair value of options granted to employees and directors under the 2015 Plan and the 2018 Plan (collectively, the “Plans”) during the three and nine months ended September 30, 2018 and 2017 were as follows, presented on a weighted-average basis:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.93	%	1.90	%	2.80	%	1.97	%
Expected term (in years)	6.25		6.00		6.41		6.00
Expected volatility	74.37	%	73.88	%	74.90	%	74.23	%
Expected dividend yield	—	%	—	%	—	%	—	%

The assumptions that the Company used to determine the fair value of options granted to non-employees were as follows, presented on a weighted-average basis:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.94	%	1.97	%	2.90	%	1.97	%
Expected term (in years)	7.04		8.84		7.46		8.84
Expected volatility	74.49	%	77.93	%	74.07	%	77.93	%
Expected dividend yield	—	%	—	%	—	%	—	%

Options

Stock option activity under the Plans is summarized as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Granted	2,891,639		17.11
Exercised	(22,060)		3.46
Forfeited	(132,475)		5.16
Outstanding as of September 30, 2018	5,860,168	$	9.78	8.81	$	96,055
Options exercisable as of September 30, 2018	1,575,324	$	2.44	7.72	$	36,330
Options unvested as of September 30, 2018	4,284,844	$	12.48	9.22	$	59,725

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common shares for those options that had exercise prices lower than the fair value of the Company’s common shares.

During the nine months ended September 30, 2018, option holders exercised 22,060 options for Class A common shares with an intrinsic value of $254 for total cash proceeds of $76.

The weighted-average grant-date fair value per share of options granted during the nine months ended September 30, 2018 and 2017 was $11.69 and $2.53, respectively.

The total fair value of options vested during the nine months ended September 30, 2018 and 2017 was $1,676 and $351, respectively.

Restricted Shares

Under terms of the Class A and Class B restricted share agreements covering the Class A and Class B common shares, restricted common shares are subject to a vesting schedule. The restricted shares vest over a four‑year period during which time the Company has the right to repurchase up to all unvested shares at the amount paid if the relationship between the recipient and the Company ceases. Subject to the continued employment (or other engagement of the recipient by the Company as described in the restricted share agreements), all of the restricted common shares become fully vested within four years of the date of issuance.

The following table summarizes restricted share activity for the nine months ended September 30, 2018:


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235
Granted	—		—	—		—
Vested	(133,812)	$	0.000273235	(669,066)	$	0.000273235
Unvested restricted shares outstanding as of September 30, 2018	178,417	$	0.000273235	966,429	$	0.000273235

The aggregate fair value of restricted shares that vested during the nine months ended September 30, 2018 and 2017 was $10,477 and $2,764, respectively.

Share‑Based Compensation

Share‑based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Research and development expenses	$	576	$	121	$	1,141	$	181
General and administrative expenses		926		201		1,978		369
	$	1,502	$	322	$	3,119	$	550

As of September 30, 2018, total unrecognized compensation cost related to the unvested share-based awards was $34,676, which is expected to be recognized over a weighted average period of 3.54 years.

8. Share‑Based Compensation

2015 Equity Incentive Plan

The Company’s 2015 Equity Incentive Plan, as amended (the “2015 Plan”), provides for the Company to grant qualified incentive options, nonqualified options, share grants and other share-based awards to employees and non‑employees to purchase the Company’s Class A common shares.

The total number of common shares that may be issued under the 2015 Plan was 3,778,249 and 4,794,266 shares as of December 31, 2016 and 2017, respectively, of which 2,188,249 shares remained available for future grant as of December 31, 2016 and 1,664,893 shares remained available for future grant as of December 31, 2017.

The exercise price for incentive options is determined by the board of directors. All incentive options granted to any person possessing less than 10% of the total combined voting power of all classes of shares may not have an exercise price of less than 100% of the fair market value of the Class A common shares on the grant date. All incentive options granted to any person possessing more than 10% of the total combined voting power of all classes of shares may not have an exercise price of less than 110% of the fair market value of the Class A common shares on the grant date. The option term for incentive awards may not be greater than 10 years. Incentive options granted to persons possessing more than 10% of the total combined voting power of all classes of shares may not have an option term of greater than five years. The vesting period for equity‑based awards is determined by the board of directors, which is generally four to six years. For awards granted to employees and non‑employees with four‑year vesting terms, 25% of the option vests on the first anniversary of the grant date and the remaining shares vest equally each month for three years thereafter. For awards granted to employees with six‑year vesting terms, 16% of the option vests on the first anniversary of the grant date and the remaining shares vest based on a predetermined vesting schedule for five years thereafter.

Shares that are expired, terminated, surrendered or canceled under the 2015 Plan without having been fully exercised will be available for future awards.

During the years ended December 31, 2016 and 2017, the Company granted options to purchase 316,866 and 1,545,045 Class A common shares, respectively, to employees and directors. The Company recorded share-based compensation expense for options granted to employees and directors of $354 and $876 during the years ended December 31, 2016 and 2017, respectively.

During the years ended December 31, 2016 and 2017, the Company granted options to purchase 12,807 and 1,829 Class A common shares, respectively, to non-employees. The Company recorded share-based compensation expense for options granted to non-employees of $14 and $21 during the years ended December 31, 2016 and 2017, respectively.

Option Valuation

The assumptions that the Company used to determine the grant-date fair value of options granted to employees and directors were as follows, presented on a weighted-average basis:


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.45	%	1.99	%
Expected term (in years)	6.25		6.25
Expected volatility	70.75	%	74.18	%
Expected dividend yield	0	%	0	%

The assumptions that the Company used to determine the fair value of options granted to non-employees were as follows, presented on a weighted-average basis:


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.94	%	2.49	%
Expected term (in years)	10.00		10.00
Expected volatility	65.85	%	78.28	%
Expected dividend yield	0	%	0	%

Options

Through December 31, 2017, all options granted by the Company under the 2015 Plan were for the purchase of Class A common shares. The following table summarizes option activity under the 2015 Plan for the year ended December 31, 2017:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2016	1,583,691	$	1.64	9.10	$	356
Granted	1,546,874		3.90
Exercised	—		—
Forfeited	(7,501)		3.75
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Options exercisable as of December 31, 2017	843,454	$	1.62	8.07	$	2,580
Options unvested as of December 31, 2017	2,279,610	$	3.17	9.09	$	3,431

During the year ended December 31, 2016, an option holder exercised 6,309 options for Class A common shares with an intrinsic value of $2 for total cash proceeds of $10. There were no options exercised during the year ended December 31, 2017.

The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2016 and 2017 was $1.16 and $2.57, respectively.

The total fair value of options vested during the years ended December 31, 2016 and 2017 was $402 and $445, respectively.

Restricted Shares

The following table summarizes restricted share activity for the year ended December 31, 2017:


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Fair Value		Number of	Fair Value
	Shares	at Issuance		Shares	at Issuance
Unvested restricted shares outstanding as of December 31, 2016	490,646	$	0.000273235	2,527,583	$	0.000273235
Granted	—		—	—		—
Vested	(178,417)		0.000273235	(892,088)		0.000273235
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235

The aggregate fair value of restricted shares that vested during the years ended December 31, 2016 and 2017 was $2,348 and $3,973, respectively.

Share‑Based Compensation

Share‑based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended
	December 31,
	2016		2017
Research and development expenses	$	59	$	324
General and administrative expenses		309		573
	$	368	$	897

As of December 31, 2017, total unrecognized compensation cost related to the unvested share-based awards was $4,280, which is expected to be recognized over a weighted average remaining period of 3.22 years.

License and Acquisition Agreements	9 Months Ended	12 Months Ended
License and Acquisition Agreements	Sep. 30, 2018	Dec. 31, 2017
License and Acquisition Agreements
License and Acquisition Agreements	9. License and Acquisition Agreements Biogen Asset Purchase Agreement In September 2016, the Company entered into an asset purchase agreement (the "Biogen Agreement") with Biogen MA Inc. ("Biogen") to acquire all of Biogen's right, title and interest in and to certain assets used in or relating to KPL-716 and other antibodies covered by certain patent rights, including patents and other intellectual property rights, clinical data, know-how, and clinical drug supply. In addition, Biogen granted to the Company a non-exclusive, sublicensable, worldwide license to certain background patent rights related to the KPL-716 program. The Company is obligated to use commercially reasonable efforts to develop and commercialize such acquired products. In exchange for these rights, the Company made an upfront payment to Biogen of $11,500 and a technology transfer payment of $500. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment and technology transfer payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Biogen Agreement, the Company is obligated to make milestone payments to Biogen of up to $179,000 upon the achievement of specified clinical and regulatory milestones in multiple indications in various territories. During the year ended December 31, 2017, the Company made a milestone payment of $4,000 associated with the achievement of a specified clinical milestone event. Additionally, the Company could be obligated to make up to an aggregate of up to $150,000 of payments upon the achievement of specified annual net sales milestones and to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the high single-digit percentages and ending below the teens. The Company also agreed to pay certain obligations under third‑party contracts retained by Biogen that relate to the KPL‑716 program. Under these retained contracts, the Company paid a one‑time upfront sublicense fee of $150 and is obligated to pay insignificant annual maintenance fees as well as clinical and regulatory milestone payments of up to an aggregate of $1,575. The Company made insignificant payments in connection with the retained contracts during the three and nine months ended September 30, 2018 and 2017. The Biogen Agreement will terminate upon the expiration of all payment obligations with respect to the last product in all countries in the territory. The Company has the right to terminate the agreement with 90 days’ prior written notice. Both parties may terminate by mutual written consent or in the event of material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). During the three months ended September 30, 2018 and 2017 and the nine months ended September 30, 2018 and 2017, the Company recorded research and development expense of $11, $11, $41 and $4,158, respectively, in connection with milestone and other payments due under the Biogen Agreement. Novo Nordisk License Agreement In August 2017, the Company entered into a license agreement (the “Novo Nordisk Agreement”) with Novo Nordisk A/S (“Novo Nordisk”), pursuant to which the Company has been granted an exclusive, sublicensable, worldwide license under certain intellectual property rights controlled by Novo Nordisk to make, use, develop and commercialize KPL‑045 for all indications. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In consideration for the license, the Company made an upfront payment of $1,500 to Novo Nordisk. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Novo Nordisk Agreement, the Company was also required to make a payment of $150 upon completion of the technology transfer by Novo Nordisk. The technology was transferred during the nine months ended September 30, 2018 and, as a result, this payment was made and is recorded in the Company's consolidated statement of operations for the nine months ended September 30, 2018. In addition, the Company is obligated to make milestone payments upon the achievement of specified clinical, regulatory and initial sales milestones and upon the achievement of annual net sales thresholds, including a payment of $1,000 upon the earlier to occur of a specified regulatory milestone and January 2020, unless the Novo Nordisk Agreement is earlier terminated by either party. As of September 30, 2018 and December 31, 2017, the Company determined that the payment related to the milestone was not probable and, therefore, no amount was recorded in the Company's consolidated statement of operations and comprehensive loss during the nine months ended September 30, 2018 and 2017. The Company has also agreed to pay royalties on annual net sales of products licensed under the agreement. Under the Novo Nordisk Agreement, the Company is solely responsible for all development, regulatory and commercial activities and costs. The Company is also responsible for costs related to filing, prosecuting and maintaining the licensed patent rights. The Novo Nordisk Agreement will terminate upon expiration of the last‑to‑expire royalty term for any licensed product in the territories, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for uncured material breach of the agreement by the other party. Novo Nordisk has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may also terminate the agreement for any reason upon prior written notice to Novo Nordisk. During the three and nine months ended September 30, 2018, the Company recorded research and development expense of $4, and $154, respectively, in connection with milestone payments due under the Novo Nordisk Agreement. During the three and nine months ended September 30, 2017, the Company recorded research and development expense of $1,500, in connection with the upfront payment due under the Novo Nordisk Agreement. Primatope Stock Purchase Option Agreement In September 2017, the Company entered into a stock purchase option agreement (the “Primatope Agreement”) with Primatope Therapeutics, Inc. (“Primatope”), pursuant to which the Company has been granted a license to certain intellectual property rights controlled by Primatope to research, develop, and manufacture the pre‑clinical antibody, KPL‑404. The agreement provides the Company with an exclusive call option to purchase 100% of the capital stock of Primatope. Upon execution of the agreement, the Company made $500 in upfront payments for the initial option period through April 2018 (the “Initial Option Period”). The Primatope Agreement allows up to three extensions of the Initial Option Period through January 2019 (including the initial option period, the “Option Period”) for total extension payments of up to $800. Through October 2018, the Company made payments totaling $600 to extend the Option Period to November 15, 2018. During the Option Period, the Company may conduct research and pre‑clinical work to assess the viability of the asset. If the call option is exercised, the Company will acquire all of the outstanding equity of Primatope in exchange for upfront consideration of $10,000 as well as potential milestone payments of up to $10,000. The upfront payment and the milestone payments may be paid at the option of the Company in a combination of cash and issuance of the Company’s Class A common shares. The Company has determined that the call option represents a variable interest in Primatope and that Primatope is a VIE. However, as the Company has no ability to control the board of directors or direct the ongoing activities of Primatope, the Company does not have power over the activities that most significantly impact Primatope’s economic performance and is not the primary beneficiary of Primatope. As a result, the Company does not consolidate the assets, liabilities, and results of operations of Primatope. Either party may terminate the Primatope Agreement for uncured material breach of the agreement by the other party or by mutual written consent. During the three and nine months ended September 30, 2018, the Company recorded research and development expense of $250 and $500, respectively, related to the extension of the option period under the Primatope Agreement. During the three and nine months ended September 30, 2017, the Company recorded research and development expense of $500, in connection with upfront payments related to the Initial Option Period under the Primatope Agreement. Regeneron License Agreement In September 2017, the Company entered into a license agreement (the “Regeneron Agreement”) with Regeneron Pharmaceuticals, Inc. (“Regeneron”), pursuant to which the Company has been granted an exclusive, sublicensable license under certain intellectual property rights controlled by Regeneron to develop and commercialize rilonacept in certain fields and territories. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In exchange for these rights, the Company made an upfront payment of $5,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Regeneron Agreement, the Company is also obligated to make payments to Regeneron of up to an aggregate of $27,500 upon the achievement of specified regulatory milestones. Upon commercialization of the licensed products, the parties will share profits equally, after deducting certain commercialization expenses subject to specified limits. Under the Regeneron Agreement, the Company is solely responsible for all development and commercialization activities and costs in its territories. The Company is also responsible for costs related to the filing, prosecution and maintenance of certain licensed patent rights. The parties also entered into a clinical supply agreement under which Regeneron agreed to manufacture the developed product during the clinical phase. During the three and nine months ended September 30, 2018, the Company recorded research and development expense of $257 and $1,835, respectively, related to the purchase of drug materials under this agreement. During the three and nine months ended September 30, 2017, the Company did not incur any research and development expense related to the purchase of drug materials under this agreement. As of September 30, 2018 and December 31, 2017, the Company has non-cancelable purchase commitments under the clinical supply agreement (see Note 11). The Regeneron Agreement will expire when the Company is no longer developing or commercializing any licensed product under the Regeneron Agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). Regeneron has the right to terminate the agreement if the Company suspends its development or commercialization activities for a consecutive 12-month period or does not grant a sublicense to a third‑party to perform such activities, or if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time that is 18 months after the effective date of the agreement with 180 days’ written notice or with one years’ written notice if the Company terminates the agreement following U.S. marketing approval of a rilonacept product developed by the Company. The Company may also terminate the agreement with three month’s written notice if the products are determined to have certain safety concerns. The Company did not incur any research and development expense directly related to milestone payments due under the Regeneron Agreement during the three and nine months ended September 30, 2018. During the three and nine months ended September 30, 2017, the Company recorded research and development expense of $5,000, in connection with the upfront payment due under the Regeneron Agreement. MedImmune License Agreement In December 2017, the Company entered into a license agreement (the “MedImmune Agreement”) with MedImmune, Limited (“MedImmune”), pursuant to which MedImmune granted the Company an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab. Under the MedImmune Agreement, the Company also acquired reference rights to relevant manufacturing and regulatory documents and MedImmune’s existing supply of mavrilimumab drug substance and product. The Company is obligated to use commercially reasonable efforts to develop and commercialize the licensed products. In exchange for these rights, the Company made an upfront payment of $8,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. In addition, the Company is obligated to make clinical, regulatory and initial sales milestone payments of up to $72,500 in aggregate for the first two indications, including, a $5,000 pass-through payment due upon the achievement of a specified clinical milestone event which is anticipated to be met in the fourth quarter of 2018. Also included is a milestone payment of $10,000 due upon the earlier to occur of a specified regulatory milestone and December 31, 2018, unless the MedImmune Agreement is earlier terminated by either party. As of September 30, 2018 and December 31, 2017, the Company determined that the payment related to this milestone was probable and, therefore, recognized research and development expense and an accrued milestone of $10,000 during the year ended December 31, 2017. In addition, the Company is obligated to make clinical and regulatory milestone payments of up to $15,000 in the aggregate for each subsequent indication. The Company is obligated to make milestone payments to MedImmune of up to $85,000 upon the achievement of annual net sales thresholds up to, but excluding, $1,000,000 in annual net sales as well as additional milestone payments aggregating up to $1,100,000 upon the achievement of additional specified annual net sales thresholds starting at $1,000,000 and higher. The Company has also agreed to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the low double‑digit percentages and ending at twenty percent. Royalty rates are subject to reductions upon certain events. The Company is solely responsible for all development, manufacturing, and commercial activities and costs of the licensed products, including clinical studies or other tests necessary to support the use of a licensed product. The Company is also responsible for costs related to the filing, prosecution and maintenance of the licensed patent rights. The MedImmune Agreement will expire upon the expiration of the royalty term in the last country for the last indication, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days. MedImmune has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time upon 90 days’ prior written notice. During the three and nine months ended September 30, 2018 and 2017, the Company did not record research and development expense in connection with milestone payments due under the MedImmune Agreement.	9. License and Acquisition Agreements Biogen Asset Purchase Agreement In September 2016, the Company entered into an asset purchase agreement (the “Biogen Agreement”) with Biogen MA Inc. (“Biogen”) to acquire all of Biogen's right, title and interest in and to certain assets used in or relating to KPL-716 and other antibodies covered by certain patent rights, including patents and other intellectual property rights, clinical data, know-how, and clinical drug supply. In addition, Biogen granted to the Company a non-exclusive, sublicensable, worldwide license to certain background patent rights related to the KPL-716 program. The Company is obligated to use commercially reasonable efforts to develop and commercialize such acquired products. In exchange for these rights, the Company made an upfront payment to Biogen of $11,500 and a technology transfer payment of $500. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment and technology transfer payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Biogen Agreement, the Company is obligated to make milestone payments to Biogen of up to $179,000 upon the achievement of specified clinical and regulatory milestones in multiple indications in various territories. During the year ended December 31, 2017, the Company made a milestone payment of $4,000 associated with the achievement of a specified clinical milestone event. Additionally, the Company could be obligated to make up to an aggregate of up to $150,000 of payments upon the achievement of specified annual net sales milestones and to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the high single-digit percentages and ending below the teens. The Company also agreed to pay certain obligations under third‑party contracts retained by Biogen that relate to the KPL‑716 program. Under these retained contracts, the Company paid a one‑time upfront sublicense fee of $150 and is obligated to pay insignificant annual maintenance fees as well as clinical and regulatory milestone payments of up to an aggregate of $1,575. During the year ended December 31, 2017 the Company paid $75 upon the achievement of certain milestones in connection with the retained contracts. The Biogen Agreement will terminate upon the expiration of all payment obligations with respect to the last product in all countries in the territory. The Company has the right to terminate the agreement with 90 days’ prior written notice. Both parties may terminate by mutual written consent or in the event of material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). During the years ended December 31, 2016 and 2017, the Company recorded research and development expense in connection with the Biogen Agreement of $12,100 and $4,169, respectively. Novo Nordisk License Agreement In August 2017, the Company entered into a license agreement (the “Novo Nordisk Agreement”) with Novo Nordisk A/S (“Novo Nordisk”), pursuant to which the Company has been granted an exclusive, sublicensable, worldwide license under certain intellectual property rights controlled by Novo Nordisk to make, use, develop and commercialize KPL‑045 for all indications. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In consideration for the license, the Company made an upfront payment of $1,500 to Novo Nordisk. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Novo Nordisk Agreement, the Company is also required to make a payment of $150 upon completion of the technology transfer by Novo Nordisk. In addition, the Company is obligated to make milestone payments upon the achievement of specified clinical, regulatory and initial sales milestones and upon the achievement of annual net sales thresholds, including a payment of $1,000 upon the earlier to occur of a specified regulatory milestone and January 2020, unless the Novo Nordisk Agreement is earlier terminated by either party. As of December 31, 2017, the Company determined that the payment related to the milestone was not probable and, therefore, no amount was recorded in the Company's consolidated statement of operations and comprehensive loss during the year ended December 31, 2017. The Company has also agreed to pay royalties on annual net sales of products licensed under the agreement. Under the Novo Nordisk Agreement, the Company is solely responsible for all development, regulatory and commercial activities and costs. The Company is also responsible for costs related to filing, prosecuting and maintaining the licensed patent rights. The Novo Nordisk Agreement will terminate upon expiration of the last‑to‑expire royalty term for any licensed product in the territories, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for uncured material breach of the agreement by the other party. Novo Nordisk has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may also terminate the agreement for any reason upon prior written notice to Novo Nordisk. During the year ended December 31, 2017, the Company recorded research and development expense of $1,500, in connection with the Novo Nordisk Agreement. Primatope Stock Purchase Option Agreement In September 2017, the Company entered into a stock purchase option agreement (the “Primatope Agreement”) with Primatope Therapeutics, Inc. (“Primatope”), pursuant to which the Company has been granted a license to certain intellectual property rights controlled by Primatope to research, develop, and manufacture the pre‑clinical antibody, KPL‑404. The agreement provides the Company with an exclusive call option to purchase 100% of the capital stock of Primatope. Upon execution of the agreement, the Company made $500 in upfront payments for the initial option period through April 2018 (the “Initial Option Period”). The Primatope Agreement allows up to three extensions of the Initial Option Period through January 2019 (including the initial option period, the “Option Period”) for total extension payments of up to $800. In April 2018, the Company made a payment of $250 to extend the Option Period for an additional three months to June 2018. During the Option Period, the Company may conduct research and pre‑clinical work to assess the viability of the asset. If the call option is exercised, the Company will acquire all of the outstanding equity of Primatope in exchange for upfront consideration of $10,000 as well as potential milestone payments of up to $10,000. The upfront payment and the milestone payments may be paid in a combination of cash and issuance of the Company’s Class A common shares. The Company has determined that the call option represents a variable interest in Primatope and that Primatope is a VIE. However, as the Company has no ability to control the board of directors or direct the ongoing activities of Primatope, the Company does not have power over the activities that most significantly impact Primatope’s economic performance and is not the primary beneficiary of Primatope. As a result, the Company does not consolidate the assets, liabilities, and results of operations of Primatope. Either party may terminate the Primatope Agreement for uncured material breach of the agreement by the other party or by mutual written consent. During the year ended December 31, 2017, the Company recorded research and development expense of $500 in connection with the Primatope Agreement. Regeneron License Agreement In September 2017, the Company entered into a license agreement (the “Regeneron Agreement”) with Regeneron Pharmaceuticals, Inc. (“Regeneron”), pursuant to which the Company has been granted an exclusive, sublicensable license under certain intellectual property rights controlled by Regeneron to develop and commercialize rilonacept in certain fields and territories. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In exchange for these rights, the Company made an upfront payment of $5,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Regeneron Agreement, the Company is also obligated to make payments to Regeneron of up to an aggregate of $27,500 upon the achievement of specified regulatory milestones. Upon commercialization of the licensed products, the parties will share profits equally, after deducting certain commercialization expenses subject to specified limits. Under the Regeneron Agreement, the Company is solely responsible for all development and commercialization activities and costs in its respective territory. The Company is also responsible for costs related to the filing, prosecution and maintenance of certain licensed patent rights. The parties also entered into a clinical supply agreement under which Regeneron agreed to manufacture the developed product during the clinical phase. During the year ended December 31, 2017, the Company recognized research and development expense of $208 related to the purchase of drug materials under this agreement. As of December 31, 2017, the Company has non-cancelable purchase commitments under the clinical supply agreement (see Note 12). The Regeneron Agreement will expire when the Company is no longer developing or commercializing any licensed product under the Regeneron Agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). Regeneron has the right to terminate the agreement if the Company suspends its development or commercialization activities for a consecutive 12 month period or does not grant a sublicense to a third‑party to perform such activities, or if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time that is 18 months after the effective date of the agreement with 180 days’ written notice or with one years’ written notice if we terminate the agreement following U.S. marketing approval of a rilonacept product developed by the Company. The Company may also terminate the agreement with three month’s written notice if the products are determined to have certain safety concerns. During the year ended December 31, 2017, the Company recorded research and development expense of $5,208, in connection with the agreements with Regeneron. MedImmune License Agreement In December 2017, the Company entered into a license agreement (the “MedImmune Agreement”) with MedImmune, Limited (“MedImmune”), pursuant to which MedImmune granted the Company an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab. Under the MedImmune Agreement, the Company also acquired reference rights to relevant manufacturing and regulatory documents and MedImmune’s existing supply of mavrilimumab drug substance and product. The Company is obligated use commercially reasonable efforts to develop and commercialize the licensed products. In exchange for these rights, the Company made an upfront payment of $8,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. In addition, the Company is obligated to make clinical, regulatory and initial sales milestone payments of up to $72,500 in aggregate for the first two indications, including a milestone payment of $10,000 upon the earlier to occur of a specified regulatory milestone and December 31, 2018, unless the MedImmune Agreement is earlier terminated by either party. As of December 31, 2017, the Company determined that the payment related to this milestone was probable and, therefore, recognized research and development expense and an accrued milestone of $10,000 during the year ended December 31, 2017. In addition, the Company is obligated to make clinical and regulatory milestone payments of up to $15,000 in the aggregate for each subsequent indication. The Company is obligated to make milestone payments to MedImmune of up to $85,000 upon the achievement of annual net sales thresholds up to, but excluding, $1,000,000 in annual net sales as well as additional milestone payments aggregating up to $1,100,000 upon the achievement of additional specified annual net sales thresholds starting at $1,000,000 and higher. The Company has also agreed to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the low double‑digit percentages and ending at twenty percent. Royalty rates are subject to reductions upon certain events. The Company is solely responsible for all development, manufacturing, and commercial activities and costs of the licensed products, including clinical studies or other tests necessary to support the use of a licensed product. The Company is also responsible for costs related to the filing, prosecution and maintenance of the licensed patent rights. The MedImmune Agreement will expire upon the expiration of the royalty term in the last country for the last indication, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days. MedImmune has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time upon 90 days’ prior written notice. During the year ended December 31, 2017, the Company recorded research and development expense of $18,000 in connection with the MedImmune Agreement.

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes

Income Taxes

10. Income Taxes

As a company incorporated in Bermuda, the Company is principally subject to taxation in Bermuda. Under the current laws of Bermuda, tax on a company’s income is assessed at a zero percent tax rate. As a result, the Company has not recorded any income tax benefits from its losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards will be available to the Company for those losses.

In August 2015, the Company entered into agreements with its wholly owned subsidiary, Kiniksa US, under which Kiniksa US provides management and research and development services to the Company for which the Company pays costs plus a service fee. Kiniksa US is subject to tax for federal and state tax purposes. On December 22, 2017, the United States enacted new tax reform (“Tax Cuts and Jobs Act”). The Tax Cuts and Jobs Act contains provisions with separate effective dates but is generally effective for taxable years beginning after December 31, 2017. Beginning with the year ending December 31, 2018, the corporate statutory rates on U.S. earnings will be reduced from a top marginal rate of 35% to a flat rate of 21%. The impact of the future rate reduction resulted in a provision for income taxes of $69 for the year ended December 31, 2017 relating to the revaluation of the Company’s net deferred tax assets.

Income (loss) before provision for income taxes consisted of the following:


	Year Ended
	December 31,
	2016		2017
Bermuda	$	(24,254)	$	(65,391)
Foreign (U.S.)		317		520
	$	(23,937)	$	(64,871)

The components of the Company’s income tax provision for the years ended December 31, 2016 and 2017 are as follows:


	Year Ended
	December 31,
	2016		2017
Current income tax provision:
Bermuda	$	—	$	—
U.S. federal		78		184
U.S. state		4		15
Total current income tax provision		82		199
Deferred income tax provision (benefit):
Bermuda		—		—
U.S. federal		(26)		(87)
U.S. state		(20)		(110)
Total deferred income tax provision (benefit)		(46)		(197)
Total provision for income taxes	$	36	$	2

A reconciliation of the Bermuda statutory income tax rate of 0% to the Company’s effective income tax rate is as follows:


	Year Ended
	December 31,
	2016		2017
Bermuda statutory income tax rate	—	%	—	%
Foreign (U.S.) tax rate differential	(0.5)		(0.4)
Research and development tax credits	0.5		0.5
2017 Tax Cuts and Jobs Act	—		(0.1)
Effective income tax rate	—	%	—	%

Net deferred tax assets consisted of the following:


	December 31,
	2016		2017
Research and development tax credit carryforwards	$	18	$	90
Depreciation and amortization		(4)		(14)
Accrued expenses and other		37		189
Total deferred tax assets		51		265
Valuation allowance		(10)		(27)
Net deferred tax assets	$	41	$	238

As of December 31, 2017, the Company had state research and development tax credit carryforwards of approximately $113, available to reduce future tax liabilities, which begin to expire in 2031 through 2032.

As required by ASC 740, the Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. In order to utilize state research and development tax credits, the Company will need taxable income in the jurisdiction of where the credit was generated. The Company currently has no taxable income in certain state jurisdictions and thus management has determined that it is more likely than not that the Company will not recognize the benefits of state research and development tax credits generated in those jurisdictions, and as a result, a valuation allowance of $10 and $27 has been established at December 31, 2016 and 2017, respectively. The remaining deferred tax assets will be fully utilized in the United States based on future income generated under the cost‑plus arrangement in place.

Utilization of the state research and development tax credits may be subject to substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three‑year period.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2016 and 2017 were due primarily to an increase in state research and development tax credits and were as follows:


	Year Ended
	December 31,
	2016		2017
Valuation allowance at beginning of year	$	(1)	$	(10)
Increases recorded to income tax provision		(9)		(17)
Valuation allowance at end of year	$	(10)	$	(27)

The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2016 or 2017. The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision. As of December 31, 2016 and 2017, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the Company’s consolidated statements of operations and comprehensive loss.

The Company files income tax returns in the United States and certain state jurisdictions. Kiniksa US’s federal and state income tax returns are subject to tax examinations for the tax years ended December 31, 2013 and subsequent years. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state tax authorities to the extent utilized in a future period. There are currently no income tax examinations pending.

Net Loss per Share

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Commitments and Contingencies

Net Loss per Share

10. Net Loss per Share

Net Loss per Share Attributable to Common Shareholders

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common shares are identical, except with respect to voting rights. As the liquidation and dividend rights are identical, losses are allocated on a proportionate basis and the resulting net loss per share attributed to common shareholders will, therefore, be the same for both Class A and Class B common shares on an individual or combined basis.

Basic and diluted net loss per share attributable to common shareholders was calculated as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator:
Net loss attributable to common shareholders	$	(24,406)	$	(16,029)	$	(60,647)	$	(32,172)
Denominator:
Weighted average common shares outstanding—basic and diluted		48,183,424		1,942,106		23,174,841		1,675,133
Net loss per share attributable to common shareholders— basic and diluted	$	(0.51)	$	(8.25)	$	(2.62)	$	(19.21)

The Company's potentially dilutive securities, which include options, unvested restricted shares and convertible preferred shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders because including them would have had an anti-dilutive effect:


	As of September 30,
	2018	2017

Options to purchase common shares	5,860,168	3,012,176
Unvested restricted shares	1,144,846	2,215,351
Convertible preferred shares (as converted to common shares)	—	22,885,492
	7,005,014	28,113,019

11. Net Loss per Share

Basic and diluted net loss per share attributable to common shareholders was calculated as follows:


	Year Ended
	December 31,
	2016		2017
Numerator:
Net loss attributable to common shareholders	$	(23,973)	$	(64,873)
Denominator:
Weighted average common shares outstanding — basic and diluted		261,695		1,809,751
Net loss per share attributable to common shareholders — basic and diluted	$	(91.61)	$	(35.85)

The Company’s unvested restricted common shares have been excluded from the computation of basic net loss per share attributable to common shareholders.

The Company’s potentially dilutive securities, which include options, unvested restricted shares and convertible preferred shares, have been excluded from the computation of diluted net loss per share attributable to common shareholders as the effect would be to reduce the net loss per share attributable to common shareholders. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:


	Year Ended
	December 31,
	2016	2017

Options to purchase common shares	1,583,691	3,123,064
Unvested restricted shares	3,018,229	1,947,724
Convertible preferred shares (as converted to common shares)	17,128,120	22,885,492
	21,730,040	27,956,280

Commitments and Contingencies

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Commitments and Contingencies

11. Commitments and Contingencies

Lease Agreements

On July 24, 2015, Kiniksa US entered into an operating lease in Wellesley Hills, Massachusetts for office space that comprised the former headquarters for Kiniksa US. In March 2016, effective August 1, 2016, Kiniksa US entered into an expansion and extension on its lease, which expanded its leased space to a total of 10,800 square feet. On March 31, 2017, Kiniksa US renewed this lease and extended the lease term to August 2018. Monthly lease payments, inclusive of base rent and ancillary charges, were $27.

On March 13, 2018, Kiniksa US entered into an operating lease in Lexington, Massachusetts for office and laboratory space that comprises the new headquarters for Kiniksa US and on June 26, 2018, Kiniksa US entered into an amendment to the lease expanding the rentable space to a total of 27,244 square feet. The lease expires on July 31, 2021. Monthly lease payments include base rent as well as, ancillary charges such as the share of operating expenses and real estate taxes. Base rent is $73 for the remainder of 2018.

The following table summarizes the future minimum lease payments under non‑cancelable operating lease commitments, for the Lexington office, as of September 30, 2018:


Year Ending December 31,
2018	$	218
2019		872
2020		872
2021		508
	$	2,470

The Company recognizes rent expense on a straight-line basis over the respective lease period and has recorded deferred rent for rent expense incurred but not yet paid. The Company recorded rent expense of $305 and $101 during the three months ended September 30, 2018 and 2017, respectively, and $714 and $301 during the nine months ended September 30, 2018 and 2017, respectively.

License Agreements

The Company has entered into license agreements with various parties under which it is obligated to make contingent and non‑contingent payments (see Note 9).

Manufacturing Commitments

The Company entered into agreements with several contract manufacturing organizations to provide pre-clinical and clinical trial materials. As of September 30, 2018 and December 31, 2017, the Company had committed to minimum payments under these agreements totaling $34,891 and $7,766, respectively.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it did not accrue any liabilities related to such obligations in its consolidated financial statements as of September 30, 2018 or December 31, 2017.

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

12. Commitments and Contingencies

Lease Agreements

On July 24, 2015, Kiniksa US entered into an operating lease in Wellesley Hills, Massachusetts for office space that comprises the headquarters for Kiniksa US. In March 2016, effective August 1, 2016, Kiniksa US entered into an expansion and extension on its lease, which expanded its leased space to a total of 10,800 square feet. On March 31, 2017, Kiniksa US renewed this lease and extended the lease term to August 2018. Monthly lease payments, inclusive of base rent and ancillary charges, total $27. As of December 31, 2017 future minimum lease payments under non-cancelable operating lease commitments, which are all due during the year ending December 31, 2018, totaled $270.

The Company recognizes rent expense on a straight-line basis over the respective lease period. The Company recorded rent expense of $286 and $402 during the years ended December 31, 2016 and 2017, respectively.

License Agreements

The Company has entered into license agreements with various parties under which it is obligated to make contingent and non‑contingent payments (see Note 9).

Manufacturing Commitments

During the year ended December 31, 2017, the Company entered into agreements with several contract manufacturing organizations to provide pre-clinical and clinical trial materials. As of December 31, 2017, the Company had non-cancelable purchase commitments under these agreements totaling $7,766, which are all due during the year ending December 31, 2018.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2016 or 2017.

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

Benefit Plans	12 Months Ended
Benefit Plans	Dec. 31, 2017
Benefit Plans
Benefit Plans	13. Benefit Plans The Company has established a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company provides matching contributions of 100% of the first 3% of each participant’s salary contributed, plus 50% for each of the next 2% contributed. Employees are immediately and fully vested in their own contributions and the Company’s match. During the years ended December 31, 2016 and 2017, the Company contributed $143 and $264, respectively, to the plan.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2017
Subsequent Events
Subsequent Events	14. Subsequent Events For its consolidated financial statements as of December 31, 2017 and for the year then ended, the Company evaluated subsequent events through February 27, 2018, the date on which those financial statements were issued, and, with respect to the reverse share split described below, through May 14, 2018. Sale of Series C Preferred Shares In February 2018, the Company issued and sold 12,784,601 Series C preferred shares at an issuance price of $15.6438 per share for proceeds of $190,822, net of issuance costs of $9,178. The rights and preferences of the Series C preferred shares are substantially similar to the Company's Preferred Shares. Each Series C preferred share shall be convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, in such manner as is permitted by Bermuda law, into such number of fully paid and non-assessable Class A common shares as is determined by dividing the Series C original issue price by the Series C conversion price, each initially equal to $15.6438, in effect at the time of conversion. In the event of a mandatory conversion of Series C preferred shares as a result of a Qualified IPO, holders of Series C preferred shares may elect to receive Class Al common shares in lieu of Class A common shares. In February 2018, in connection with the Company's sale of Series C preferred shares, the Company amended and restated its Amended Bye-Laws to increase the total number of authorized shares of all classes of capital stock to 44,746,463 shares, consisting of 35,670,093 preferred shares, 5,507,938 Class A common shares and 3,568,353 Class B common shares. Reverse Share Split On May 11, 2018, the Company effected a 1-for-2.73235 reverse share split of its authorized, designated, issued and outstanding common shares and Preferred Shares. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse share split.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Kiniksa Pharmaceuticals Corp. (“Kiniksa US”), after elimination of all significant intercompany accounts and transactions.

In assessing the consolidation requirement for variable interest entities (“VIEs”), the Company focuses on identifying whether it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE. In the event that the Company is the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE would be included in the Company’s consolidated financial statements. At December 31, 2017 and during the year then ended and at September 30, 2018 and during the three and nine months then ended, the Company was not the primary beneficiary of a VIE.

Principles of Consolidation

Use of Estimates

Cash and Cash Equivalents

The Company classifies deposits in banks, money market funds and cash invested temporarily in various instruments with maturities of three months or less at the time of purchase as cash and cash equivalents. At December 31, 2016 and 2017, cash and cash equivalents consisted principally of U.S. Treasury notes, amounts held in money market accounts and cash on deposit at commercial banks.

Concentrations of Credit Risk

Restricted Cash

Property and Equipment


		Estimated Useful Life
Computer hardware and software		3 - 5 years
Vehicles		5 years
Laboratory and facility equipment		5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		Shorter of estimated useful life or lease term

Impairment of LongLived Assets

Impairment of Long-Lived Assets

Deferred Offering Costs

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

The Company’s restricted cash, which is held in a money market fund, is carried at fair value, determined based on Level 1 inputs in the fair value hierarchy described above (see Note 3). The Company’s cash equivalents, consisting of money market accounts and U.S. Treasury notes, are carried at fair value, determined based on Level 1 and 2 inputs in the fair value hierarchy described above (see Note 3). The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these assets and liabilities.

Segment Information

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, share‑based compensation expense, allocated facility‑related and depreciation expenses, third‑party license fees and external costs of outside vendors engaged to conduct clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non‑refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with companies both inside and outside of the United States. The related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Patent Costs

Net Income (Loss) per Share

Share‑Based Compensation

The fair value of each restricted share award is estimated on the date of grant based on the fair value of the Company’s Class A or Class B common shares on that same date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the award, the risk-free interest rate, and expected dividends (see Note 8). The Company historically has been a private company and lacks company-specific historical and implied volatility information for its shares. Therefore, it estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

Comprehensive Loss

Income Taxes

Recently Adopted and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The guidance is effective for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of expected useful lives of assets


		Estimated Useful Life
Computer hardware and software		3 - 5 years
Vehicles		5 years
Laboratory and facility equipment		5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		Shorter of estimated useful life or lease term

Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of financial assets and liabilities measured at fair value on a recurring basis


	Fair Value Measurements
	as of September 30, 2018 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		5,299		—		—		5,299
Cash equivalents — U.S. Treasury notes		—		15,336		—		15,336
Short-term investments - U.S. Treasury notes		—		268,200		—		268,200
	$	5,509	$	283,536	$	—	$	289,045


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587


	Fair Value Measurements
	as of December 31, 2016 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		550		—		—		550
Cash equivalents — U.S. Treasury notes		—		52,504		—		52,504
	$	655	$	52,504	$	—	$	53,159


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587

Property and Equipment, Net (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of property and equipment, net


	September 30,		December 31,
	2018		2017
Furniture and fixtures	$	6	$	83
Computer hardware and software		94		9
Vehicles		85		85
Construction in progress		2,241		—
		2,426		177
Less: Accumulated depreciation		(66)		(52)
	$	2,360	$	125


	December 31,
	2016		2017
Furniture and fixtures	$	14	$	83
Computer hardware and software		9		9
Vehicles		85		85
		108		177
Less: Accumulated depreciation		(24)		(52)
	$	84	$	125

Accrued Expenses (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of accrued expenses


	September 30,		December 31,
	2018		2017
Accrued employee compensation and benefits	$	3,160	$	1,570
Accrued research and development expenses		9,313		3,905
Accrued legal and professional fees		548		688
Other		332		49
	$	13,353	$	6,212


	December 31,
	2016		2017
Accrued employee compensation and benefits	$	986	$	1,570
Accrued research and development expenses		979		3,905
Accrued legal and professional fees		122		688
Other		3		49
	$	2,090	$	6,212

Convertible Preferred Shares (Tables)

12 Months Ended

Dec. 31, 2017

Convertible Preferred Shares

Schedule of preferred shares as of balance sheet date

December 31, 2016

Preferred

Common Shares

Issued and

Carrying

Liquidation

Issuable Upon

Designated

Outstanding

Value

Preference

Conversion

Series A preferred shares

17,128,120

79,897

80,000

17,128,120


	December 31, 2017
		Preferred
	Preferred	Shares					Common Shares
	Shares	Issued and	Carrying		Liquidation		Issuable Upon
	Designated	Outstanding	Value		Preference		Conversion
Series A preferred shares	17,128,120	17,128,120	$	79,897	$	80,000	17,128,120
Series B preferred shares	5,757,372	5,757,372		39,873		40,000	5,757,372
	22,885,492	22,885,492	$	119,770	$	120,000	22,885,492

Share Based Compensation (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of stock option activity under the Plans


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Granted	2,891,639		17.11
Exercised	(22,060)		3.46
Forfeited	(132,475)		5.16
Outstanding as of September 30, 2018	5,860,168	$	9.78	8.81	$	96,055
Options exercisable as of September 30, 2018	1,575,324	$	2.44	7.72	$	36,330
Options unvested as of September 30, 2018	4,284,844	$	12.48	9.22	$	59,725


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2016	1,583,691	$	1.64	9.10	$	356
Granted	1,546,874		3.90
Exercised	—		—
Forfeited	(7,501)		3.75
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Options exercisable as of December 31, 2017	843,454	$	1.62	8.07	$	2,580
Options unvested as of December 31, 2017	2,279,610	$	3.17	9.09	$	3,431

Schedule of restricted share activity


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235
Granted	—		—	—		—
Vested	(133,812)	$	0.000273235	(669,066)	$	0.000273235
Unvested restricted shares outstanding as of September 30, 2018	178,417	$	0.000273235	966,429	$	0.000273235


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Fair Value		Number of	Fair Value
	Shares	at Issuance		Shares	at Issuance
Unvested restricted shares outstanding as of December 31, 2016	490,646	$	0.000273235	2,527,583	$	0.000273235
Granted	—		—	—		—
Vested	(178,417)		0.000273235	(892,088)		0.000273235
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235

Schedule of share-based compensation expense was classified in the consolidated statements of operations and comprehensive loss


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Research and development expenses	$	576	$	121	$	1,141	$	181
General and administrative expenses		926		201		1,978		369
	$	1,502	$	322	$	3,119	$	550


	Year Ended
	December 31,
	2016		2017
Research and development expenses	$	59	$	324
General and administrative expenses		309		573
	$	368	$	897

Employees and directors

Schedule of stock option valuation assumptions presented on weighted average basis


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.93	%	1.90	%	2.80	%	1.97	%
Expected term (in years)	6.25		6.00		6.41		6.00
Expected volatility	74.37	%	73.88	%	74.90	%	74.23	%
Expected dividend yield	—	%	—	%	—	%	—	%


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.45	%	1.99	%
Expected term (in years)	6.25		6.25
Expected volatility	70.75	%	74.18	%
Expected dividend yield	0	%	0	%

Non-employees

Schedule of stock option valuation assumptions presented on weighted average basis


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.94	%	1.97	%	2.90	%	1.97	%
Expected term (in years)	7.04		8.84		7.46		8.84
Expected volatility	74.49	%	77.93	%	74.07	%	77.93	%
Expected dividend yield	—	%	—	%	—	%	—	%


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.94	%	2.49	%
Expected term (in years)	10.00		10.00
Expected volatility	65.85	%	78.28	%
Expected dividend yield	0	%	0	%

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes

Schedule of income (loss) before provision for income taxes


	Year Ended
	December 31,
	2016		2017
Bermuda	$	(24,254)	$	(65,391)
Foreign (U.S.)		317		520
	$	(23,937)	$	(64,871)

Schedule of components of the Company's income tax provision


	Year Ended
	December 31,
	2016		2017
Current income tax provision:
Bermuda	$	—	$	—
U.S. federal		78		184
U.S. state		4		15
Total current income tax provision		82		199
Deferred income tax provision (benefit):
Bermuda		—		—
U.S. federal		(26)		(87)
U.S. state		(20)		(110)
Total deferred income tax provision (benefit)		(46)		(197)
Total provision for income taxes	$	36	$	2

Schedule of reconciliation of the Bermuda statutory income tax rate of 0% to the Company's effective income tax rate


	Year Ended
	December 31,
	2016		2017
Bermuda statutory income tax rate	—	%	—	%
Foreign (U.S.) tax rate differential	(0.5)		(0.4)
Research and development tax credits	0.5		0.5
2017 Tax Cuts and Jobs Act	—		(0.1)
Effective income tax rate	—	%	—	%

Summary of net deferred tax assets


	December 31,
	2016		2017
Research and development tax credit carryforwards	$	18	$	90
Depreciation and amortization		(4)		(14)
Accrued expenses and other		37		189
Total deferred tax assets		51		265
Valuation allowance		(10)		(27)
Net deferred tax assets	$	41	$	238

Schedule of changes in the valuation allowance for deferred tax assets


	Year Ended
	December 31,
	2016		2017
Valuation allowance at beginning of year	$	(1)	$	(10)
Increases recorded to income tax provision		(9)		(17)
Valuation allowance at end of year	$	(10)	$	(27)

Net Loss per Share (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of basic and diluted net loss per share attributable to common shareholders


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator:
Net loss attributable to common shareholders	$	(24,406)	$	(16,029)	$	(60,647)	$	(32,172)
Denominator:
Weighted average common shares outstanding—basic and diluted		48,183,424		1,942,106		23,174,841		1,675,133
Net loss per share attributable to common shareholders— basic and diluted	$	(0.51)	$	(8.25)	$	(2.62)	$	(19.21)


	Year Ended
	December 31,
	2016		2017
Numerator:
Net loss attributable to common shareholders	$	(23,973)	$	(64,873)
Denominator:
Weighted average common shares outstanding — basic and diluted		261,695		1,809,751
Net loss per share attributable to common shareholders — basic and diluted	$	(91.61)	$	(35.85)

Schedule of anti-dilutive securities excluded from the computation of diluted net loss per share attributable to common shareholders


	As of September 30,
	2018	2017

Options to purchase common shares	5,860,168	3,012,176
Unvested restricted shares	1,144,846	2,215,351
Convertible preferred shares (as converted to common shares)	—	22,885,492
	7,005,014	28,113,019


	Year Ended
	December 31,
	2016	2017

Options to purchase common shares	1,583,691	3,123,064
Unvested restricted shares	3,018,229	1,947,724
Convertible preferred shares (as converted to common shares)	17,128,120	22,885,492
	21,730,040	27,956,280

Nature of the Business and Basis of Presentation (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 27, 2018	Feb. 28, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Nature of the Business and Basis of Presentation
Net losses			$ 24,406	$ 16,029	$ 60,647	$ 32,172	$ 64,873	$ 23,973
Accumulated deficit			151,645		151,645		90,998	26,125
Cash and cash equivalents			$ 69,663		$ 69,663		$ 45,555	$ 55,970
Forecast \| Minimum
Nature of the Business and Basis of Presentation
Estimated period of sufficient funding of operating expenses and capital asset requirements	12 months
Series C convertible preferred shares
Nature of the Business and Basis of Presentation
Gross proceeds from issuance of shares		$ 200,000

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

Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) - item	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash and cash equivalents \| Credit concentration
Concentration risk
Number of financial institutions holding cash, cash equivalents and short-term investments	2	2	2

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Vehicles
Property and Equipment, Net
Expected useful life	5 years
Laboratory and facility equipment
Property and Equipment, Net
Expected useful life	5 years
Minimum \| Computer hardware and software
Property and Equipment, Net
Expected useful life	3 years
Minimum \| Furniture and fixtures
Property and Equipment, Net
Expected useful life	5 years
Maximum \| Computer hardware and software
Property and Equipment, Net
Expected useful life	5 years
Maximum \| Furniture and fixtures
Property and Equipment, Net
Expected useful life	7 years

Summary of Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred offering costs
Deferred offering costs	$ 25	$ 8
Convertible Preferred Shares (Series A, B and C)
Deferred offering costs
Deferred offering costs	$ 25	$ 8

Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets Transfers
Fair value of assets transferred from Level 1 to Level 2	$ 0	$ 0	$ 0
Fair value of assets transferred from Level 2 to Level 1	0	0	0
Fair value of assets transferred from Level 1 to Level 3	0	0	0
Fair value of assets transferred from Level 2 to Level 3	0	0	0
Fair value of assets transferred from Level 3 to Level 1	0	0	0
Fair value of assets transferred from Level 3 to Level 2	0	0	0
Fair Value \| Recurring basis
Assets
Assets	289,045	20,587	53,159
Fair Value \| Recurring basis \| Money Market Funds
Assets
Restricted cash	210	105	105
Cash equivalents	5,299	5,487	550
Fair Value \| Recurring basis \| U.S. Treasury Notes
Assets
Cash equivalents	15,336	14,995	52,504
Fair Value \| Recurring basis \| Level 1
Assets
Assets	5,509	5,592	655
Fair Value \| Recurring basis \| Level 1 \| Money Market Funds
Assets
Restricted cash	210	105	105
Cash equivalents		5,487	550
Fair Value \| Recurring basis \| Level 1 \| U.S. Treasury Notes
Assets
Cash equivalents	5,299	5,487
Fair Value \| Recurring basis \| Level 2
Assets
Assets	283,536	14,995	52,504
Fair Value \| Recurring basis \| Level 2 \| U.S. Treasury Notes
Assets
Cash equivalents	$ 15,336	$ 14,995	$ 52,504

Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment, Net
Property and equipment, Gross	$ 2,426		$ 2,426		$ 177	$ 108
Less: Accumulated depreciation	(66)		(66)		(52)	(24)
Property and equipment, Total	2,360		2,360		125	84
Depreciation expense	12	$ 8	32	$ 20	28	22
Furniture and fixtures
Property and Equipment, Net
Property and equipment, Gross	6		6		83	14
Computer hardware and software
Property and Equipment, Net
Property and equipment, Gross	94		94		9	9
Vehicles
Property and Equipment, Net
Property and equipment, Gross	$ 85		$ 85		$ 85	$ 85

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Accrued Expenses
Accrued employee compensation and benefits	$ 3,160	$ 1,570	$ 986
Accrued research and development expenses	9,313	3,905	979
Accrued legal and professional fees	548	688	122
Other	332	49	3
Accrued expenses	$ 13,353	$ 6,212	$ 2,090

Convertible Preferred Shares (Details) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended	9 Months Ended	12 Months Ended
	Feb. 28, 2018 USD ($) $ / shares shares	Mar. 31, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares	Oct. 31, 2015 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) $ / shares	Sep. 30, 2018 USD ($) director Vote $ / shares shares	Dec. 31, 2017 USD ($) director Vote $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares
Convertible Preferred Shares
Preferred shares designated						0	22,885,492
Preferred stock, shares issued (in shares)						0	22,885,492
Payment of offering expenses \| $						$ 3,646
Number of shares issued on conversion of convertible preferred shares							22,885,492
Cash dividend declared \| $					$ 0		$ 0	$ 0
Convertible Preferred Shares (Series A, B and C)
Convertible Preferred Shares
Preferred shares designated	35,670,093					0	22,885,492	17,128,120
Preferred stock, shares issued (in shares)						0	22,885,492	17,128,120
Convertible preferred shares, par value (in dollars per share) \| $ / shares	$ 0.000273235					$ 0.000273235	$ 0.000273235	$ 0.000273235
Number of directors entitled to elect \| director						2	2
Series A convertible preferred shares
Convertible Preferred Shares
Preferred shares designated							17,128,120	17,128,120
Preferred stock, shares issued (in shares)			9,099,311	8,028,809			17,128,120	17,128,120
Share price per share \| $ / shares			$ 4.6707	$ 4.6707
Proceeds from issuance of shares \| $			$ 42,499	$ 37,398
Payment of offering expenses \| $			$ 1	$ 102
Number of shares issued on conversion of convertible preferred shares							17,128,120	17,128,120
Number of votes for each Class B common share \| Vote						10	10
Original issue price (per share) \| $ / shares					$ 4.6707		$ 4.6707	$ 4.6707
Series B convertible preferred shares
Convertible Preferred Shares
Preferred shares designated							5,757,372
Preferred stock, shares issued (in shares)		5,757,372					5,757,372
Share price per share \| $ / shares		$ 6.9475
Proceeds from issuance of shares \| $		$ 39,873
Payment of offering expenses \| $		$ 127
Number of shares issued on conversion of convertible preferred shares							5,757,372
Number of votes for each Class A common share \| Vote						1	1
Original issue price (per share) \| $ / shares					6.9475		$ 6.9475	6.9475
Series C convertible preferred shares
Convertible Preferred Shares
Preferred shares designated	12,784,601
Preferred stock, shares issued (in shares)	12,784,601
Share price per share \| $ / shares	$ 15.6438
Proceeds from issuance of shares \| $	$ 190,822
Payment of offering expenses \| $	$ 9,178
Original issue price (per share) \| $ / shares					$ 15.6438		$ 15.6438	$ 15.6438
Common Class A and Class B
Convertible Preferred Shares
Number of directors entitled to elect \| director						1	1
Common Class A or Class B \| Minimum
Convertible Preferred Shares
Share price per share \| $ / shares							$ 14.0120
Gross proceeds from offering \| $						$ 100,000	$ 100,000
Subsequent event \| Convertible Preferred Shares (Series A, B and C)
Convertible Preferred Shares
Preferred shares designated	35,670,093
Subsequent event \| Series C convertible preferred shares
Convertible Preferred Shares
Preferred stock, shares issued (in shares)	12,784,601
Share price per share \| $ / shares	$ 15.6438
Proceeds from issuance of shares \| $	$ 190,822
Payment of offering expenses \| $	$ 9,178

Convertible Preferred Shares at Balance sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Oct. 31, 2015
Convertible Preferred Shares
Preferred shares designated	0	22,885,492
Preferred stock, shares issued (in shares)	0	22,885,492
Preferred stock, shares outstanding (in shares)		22,885,492
Carrying Value		$ 119,770		$ 79,897
Liquidation Preference		$ 120,000
Common Shares Issuable Upon Conversion		22,885,492
Series A convertible preferred shares
Convertible Preferred Shares
Preferred shares designated		17,128,120		17,128,120
Preferred stock, shares issued (in shares)		17,128,120		17,128,120	9,099,311	8,028,809
Preferred stock, shares outstanding (in shares)		17,128,120		17,128,120
Carrying Value		$ 79,897		$ 79,897
Liquidation Preference		$ 80,000		$ 80,000
Common Shares Issuable Upon Conversion		17,128,120		17,128,120
Series B convertible preferred shares
Convertible Preferred Shares
Preferred shares designated		5,757,372
Preferred stock, shares issued (in shares)		5,757,372	5,757,372
Preferred stock, shares outstanding (in shares)		5,757,372
Carrying Value		$ 39,873
Liquidation Preference		$ 40,000
Common Shares Issuable Upon Conversion		5,757,372

Common Shares (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
Common Shares (Details) $ / shares in Units, $ in Thousands	Sep. 30, 2018 USD ($) director Vote $ / shares shares	Dec. 31, 2017 USD ($) director Vote $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Jun. 22, 2018 shares	May 31, 2018 $ / shares shares	Feb. 28, 2018 shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)		43,918,239	43,918,239		200,000,000	44,746,463
Common stock, par value (in dollars per share) \| $ / shares		$ 0.000273235	$ 0.000273235		$ 0.000273235
Common shares or Preferred Shares not designated		11,956,456	18,729,845
Number of shares issued on conversion of convertible preferred shares		22,885,492
Preferred shares designated	0	22,885,492
Preferred stock, shares issued (in shares)	0	22,885,492
Common stock, cash dividends declared \| $	$ 0	$ 0	$ 0
Common stock, cash dividends paid \| $	0	0	0
Preferred stock, cash dividends declared \| $	0	0	0
Preferred stock, cash dividends paid \| $	$ 0	$ 0	$ 0
Common Class A and Class B
Nature of the Business and Basis of Presentation
Number of directors entitled to elect \| director	1	1
Class A common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)		5,507,938	4,491,921			5,507,938
Common stock, par value (in dollars per share) \| $ / shares	$ 0.000273235	$ 0.000273235	$ 0.000273235
Number of shares issued on conversion of convertible preferred shares	5,546,019			5,546,019	5,546,019
Number of votes (per share) \| Vote	1	1
Class B common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)		3,568,353	3,568,353			3,568,353
Common stock, par value (in dollars per share) \| $ / shares	$ 0.000273235	$ 0.000273235	$ 0.000273235
Number of shares issued on conversion of convertible preferred shares	1,070,502			1,070,502	1,070,502
Number of votes (per share) \| Vote	10	10
Convertible ratio to Class A common share	1	1
Convertible ratio to Class B1 common share	1	1
Class A1 common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)		0	0
Number of shares issued on conversion of convertible preferred shares	12,995,954				12,995,954
Number of votes (per share) \| Vote	0	0
Convertible ratio to Class A common share	1	1
Class B1 common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)		0	0
Number of shares issued on conversion of convertible preferred shares	16,057,618				16,057,618
Number of votes (per share) \| Vote	0	0
Convertible ratio to Class A common share	1	1
Convertible ratio to Class B common share	1	1
Convertible Preferred Shares (Series A, B and C)
Nature of the Business and Basis of Presentation
Preferred shares designated	0	22,885,492	17,128,120			35,670,093
Preferred stock, shares issued (in shares)	0	22,885,492	17,128,120
Number of directors entitled to elect \| director	2	2

Share Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Share Based Compensation (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	May 23, 2018
Share-based compensation
Share-based compensation expense	$ 1,502	$ 322	$ 3,119	$ 550	$ 897	$ 368
2015 Equity Incentive Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue							4,691,213
Authorized shares outstanding (in shares)	4,620,850		4,620,850
2015 Equity Incentive Plan \| Class A common shares \| Employees and directors
Share-based compensation
Number of options granted			2,887,639	1,434,156	1,545,045	316,866
2015 Equity Incentive Plan \| Class A common shares \| Non-employees
Share-based compensation
Number of options granted			4,000	1,829	1,829	12,807
Stock options \| 2015 Equity Incentive Plan
Share-based compensation
Authorized shares outstanding (in shares)	5,860,168		5,860,168		3,123,064	1,583,691
Vesting percentage of options having four year vesting term on the first anniversary of the grant date	25.00%		25.00%		25.00%
Vesting percentage of options having six year vesting term on the first anniversary of the grant date	16.00%		16.00%		16.00%
Number of options granted			2,891,639		1,546,874
Stock options \| 2015 Equity Incentive Plan \| Employees and directors
Share-based compensation
Share-based compensation expense	$ 1,414	321	$ 2,980	$ 540	$ 876	$ 354
Stock options \| 2015 Equity Incentive Plan \| Minimum
Share-based compensation
Vesting period			4 years		4 years
Stock options \| 2015 Equity Incentive Plan \| Maximum
Share-based compensation
Option term of incentive awards			10 years		10 years
Option term of awards for the persons possessing more than 10% of voting power			5 years		5 years
Vesting period			6 years		6 years
Stock options \| 2015 Equity Incentive Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue	0		0		4,794,266	3,778,249
Number of common shares available for future grant	0		0		1,644,893	2,188,249
Minimum percentage of exercise price of the fair market value of shares for the persons possessing 10% or less of voting power	100.00%		100.00%		100.00%
Minimum percentage of exercise price of the fair market value of shares for the persons possessing more than 10% of voting power	110.00%		110.00%		110.00%
Stock options \| 2015 Equity Incentive Plan \| Class A common shares \| Non-employees
Share-based compensation
Share-based compensation expense	$ 35	$ 1	$ 87	$ 10	$ 21	$ 14

Share Based Compensation - Option valuation (Details) - Stock options	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Employees and directors
Assumptions to determine fair value of options granted on weighted average basis:
Risk-free interest rate	2.93%	1.90%	2.80%	1.97%	1.99%	1.45%
Expected term (in years)	6 years 3 months	6 years	6 years 4 months 28 days	6 years	6 years 3 months	6 years 3 months
Expected volatility	74.37%	73.88%	74.90%	74.23%	74.18%	70.75%
Expected dividend yield					0.00%	0.00%
Non-employees
Assumptions to determine fair value of options granted on weighted average basis:
Risk-free interest rate	2.94%	1.97%	2.90%	1.97%	2.49%	1.94%
Expected term (in years)	7 years 15 days	8 years 10 months 2 days	7 years 5 months 16 days	8 years 10 months 2 days	10 years	10 years
Expected volatility	74.49%	77.93%	74.07%	77.93%	78.28%	65.85%
Expected dividend yield					0.00%	0.00%

Share Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Aggregate Intrinsic Value
Proceeds from exercise of options	$ 76			$ 10
Stock options \| 2015 Equity Incentive Plan
Number of Shares
Outstanding, Beginning of the period	3,123,064	1,583,691	1,583,691
Granted	2,891,639		1,546,874
Exercised	(22,060)
Forfeited	(132,475)		(7,501)
Outstanding, End of the period	5,860,168		3,123,064	1,583,691
Options exercisable	1,575,324		843,454
Options unvested	4,284,844		2,279,610
Weighted Average Exercise Price
Outstanding, Beginning of the period	$ 2.75	$ 1.64	$ 1.64
Granted	17.11		3.90
Forfeited	5.16		3.75
Outstanding, End of the period	9.78		2.75	$ 1.64
Options exercisable	2.44		1.62
Options unvested	$ 12.48		$ 3.17
Weighted Average Remaining Contractual Term (in years)
Outstanding	8 years 9 months 22 days		8 years 9 months 26 days	9 years 1 month 6 days
Exercisable	7 years 8 months 19 days		8 years 26 days
Unvested	9 years 2 months 19 days		9 years 1 month 2 days
Aggregate Intrinsic Value
Outstanding	$ 96,055		$ 6,010	$ 356
Exercisable	36,330		2,580
Unvested	$ 59,725		$ 3,431
weighted-average grant-date fair value per share of options granted	$ 11.69	$ 2.53	$ 2.57	$ 1.16
Total fair value of options vested	$ 1,676	$ 351	$ 445	$ 402
Class A common shares \| 2015 Equity Incentive Plan
Number of Shares
Exercised	(22,060)		0	(6,309)
Outstanding, End of the period	4,620,850
Aggregate Intrinsic Value
Intrinsic value of options exercised	$ 254			$ 2
Proceeds from exercise of options	$ 76			$ 10

Share Based Compensation - Restricted Shares (Details) - Unvested restricted shares - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Share-based compensation
Vesting period	4 years		4 years
Weighted Average Fair Value at Issuance
Aggregate fair value of vested restricted shares	$ 10,477	$ 2,764	$ 3,973	$ 2,348
Class A common shares
Number of shares
Unvested restricted shares outstanding, Beginning of the period	312,229	490,646	490,646
Unvested restricted shares vested	(133,812)		(178,417)
Unvested restricted shares outstanding, End of the period	178,417		312,229	490,646
Weighted Average Fair Value at Issuance
Unvested restricted shares outstanding, Beginning of the period	$ 0.000273235	$ 0.000273235	$ 0.000273235
Unvested restricted shares vested	0.000273235		0.000273235
Unvested restricted shares outstanding, End of the period	$ 0.000273235		$ 0.000273235	$ 0.000273235
Class B common shares
Number of shares
Unvested restricted shares outstanding, Beginning of the period	1,635,495	2,527,583	2,527,583
Unvested restricted shares vested	(669,066)		(892,088)
Unvested restricted shares outstanding, End of the period	966,429		1,635,495	2,527,583
Weighted Average Fair Value at Issuance
Unvested restricted shares outstanding, Beginning of the period	$ 0.000273235	$ 0.000273235	$ 0.000273235
Unvested restricted shares vested	0.000273235		0.000273235
Unvested restricted shares outstanding, End of the period	$ 0.000273235		$ 0.000273235	$ 0.000273235

Share Based Compensation - Classification of expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Share-based compensation
Share-based compensation expense	$ 1,502	$ 322	$ 3,119	$ 550	$ 897	$ 368
Total unrecognized compensation cost	34,676		$ 34,676		$ 4,280
Expenses expected to be recognized over a weighted average remaining period			3 years 6 months 15 days		3 years 2 months 19 days
Research and development expenses
Share-based compensation
Share-based compensation expense	576	121	$ 1,141	181	$ 324	59
General and administrative expenses
Share-based compensation
Share-based compensation expense	$ 926	$ 201	$ 1,978	$ 369	$ 573	$ 309

License and Acquisition Agreements - Biogen Asset Purchase Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Research and development		$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
Biogen Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 11,500
Technology transfer payment	500
Milestone payment upon achievement of clinical milestone event						4,000
One-time payment of upfront sublicense fee on retained contracts	150
Maximum aggregate obligation to pay insignificant annual maintenance fees as well as clinical and regulatory milestone payments	$ 1,575
Milestone payment upon achievement of events in retained contracts						75
Notice period to terminate the agreement	90 days
Uncured period causes termination of the agreement, due to insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured	90 days
Notice period to terminate the agreement under payment-related breaches	30 days
Research and development		$ 11	$ 11	$ 41	$ 4,158	$ 4,169	$ 12,100
Maximum \| Biogen Agreement
License and Acquisition Agreements
Milestone payment to be paid upon clinical and regulatory milestone achievement	$ 179,000
Milestone payment to be paid upon net sales milestone achievement	$ 150,000

License and Acquisition Agreements - Novo Nordisk License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Research and development		$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
Novo Nordisk Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 1,500
Consideration payable upon completion of the technology transfer	150
Milestone payment payable after achievement of specified milestones	$ 1,000
Milestone payments due				$ 0	0	0
Research and development			$ 1,500		$ 1,500	$ 1,500

License and Acquisition Agreements - Primatope Stock Purchase Option Agreement (Details) $ in Thousands	1 Months Ended		3 Months Ended		7 Months Ended	9 Months Ended		12 Months Ended
	Apr. 30, 2018 USD ($)	Sep. 30, 2017 USD ($) item	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Oct. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
License and Acquisition Agreements
Research and development			$ 20,644	$ 14,008		$ 50,475	$ 26,426	$ 56,357	$ 17,439
Primatope Agreement
License and Acquisition Agreements
Percentage of capital stock available to purchase in call option		100.00%
Upfront payment for initial option period		$ 500
Payment for extension of option period	$ 250				$ 600
Duration of option period	3 months
Upfront consideration payable on exercise of call option to acquire all outstanding equity		$ 10,000		10,000			10,000
Research and development			$ 250	500		$ 500	500	$ 500
Maximum \| Primatope Agreement
License and Acquisition Agreements
Number of extensions allowed for initial option period \| item		3
Total aggregate extension payments		$ 800
Milestone payments payable on exercise of call option to acquire all outstanding equity		$ 10,000		$ 10,000			$ 10,000

License and Acquisition Agreements - Regeneron License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Research and development		$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
Regeneron Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 5,000
Uncured period causes termination of the agreement, due to insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured	90 days
Research and development expense related to purchase of drug materials		$ 257	0	$ 1,835	0	208
Notice period to terminate the agreement under payment-related breaches	30 days
Consecutive suspension of activities period for termination of agreement	12 months
Period after which the agreement can be terminated	18 months
Notice period to terminate the agreement	180 days
Notice period to terminate the agreement after US marketing approval of the developed product	1 year
Notice period to terminate the agreement if products are having safety concerns	3 months
Research and development			5,000		5,000	$ 5,208
Maximum \| Regeneron Agreement
License and Acquisition Agreements
Milestone payment to be paid upon regulatory milestone achievement	$ 27,500		$ 27,500		$ 27,500

License and Acquisition Agreements - MedImmune License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Accrued milestone payments	$ 10,000	$ 10,000		$ 10,000		$ 10,000
Research and development		20,644	$ 14,008	50,475	$ 26,426	56,357	$ 17,439
MedImmune Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	8,000
Milestone payment to be paid upon regulatory milestone achievement	10,000					10,000
Accrued milestone payments	10,000	$ 10,000		$ 10,000		10,000
Annual net sales excluding from calculation of specified annual net sales thresholds	$ 1,000,000
Maximum percentage of royalty payable on annual net sales of licensed products	20.00%
Notice period to terminate the agreement by both parties for material breaches	90 days
Notice period to terminate the agreement	90 days
Research and development						18,000
Minimum \| MedImmune Agreement
License and Acquisition Agreements
Additional specified annual net sales threshold for additional milestone payment.	$ 1,000,000
Maximum \| MedImmune Agreement
License and Acquisition Agreements
Milestone payment to be paid upon specified milestone achievements for first two indications	72,500					72,500
Milestone payment to be paid upon clinical and regulatory milestone achievement	15,000					15,000
Milestone payment to be paid upon specified annual sales milestone achievements	85,000					85,000
Additional milestone payments payable after achievement of additional annual sales	$ 1,100,000					$ 1,100,000

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statutory income tax rate		0.00%	0.00%
Income tax benefits - Bermuda		$ 0	$ 0
Net operating loss carryforwards		0	$ 0
Provision for income taxes as result of reduction of tax rate		$ 69
Kiniksa US
Statutory income tax rate		35.00%
Kiniksa US \| Forecast
Statutory income tax rate	21.00%

Income Taxes - Components of income tax provision (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Income (loss) before provision for income taxes
Bermuda					$ (65,391)	$ (24,254)
Foreign (U.S.)					520	317
Income (loss) before provision for income taxes					(64,871)	(23,937)
Current income tax provision:
U.S. federal					184	78
U.S. state					15	4
Total current income tax provision					199	82
Deferred income tax provision (benefit):
U.S. federal					(87)	(26)
U.S. state					(110)	(20)
Total deferred income tax provision (benefit)			$ (935)	$ (168)	(197)	(46)
Total provision for income taxes	$ (131)	$ (51)	$ (386)	$ (121)	$ 2	$ 36

Income Taxes - Reconciliation (Details)	12 Months Ended
Income Taxes - Reconciliation (Details)	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Statutory income tax rate	0.00%	0.00%
Foreign (U.S.) tax rate differential	(0.40%)	(0.50%)
Research and development tax credits	0.50%	0.50%
2017 Tax Cuts and Jobs Act	(0.10%)
Effective income tax rate	0.00%	0.00%

Income Taxes - Components of deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Research and development tax credit carryforwards	$ 90	$ 18
Depreciation and amortization	(14)	(4)
Accrued expenses and other	189	37
Total deferred tax assets	265	51
Valuation allowance	(27)	(10)	$ (1)
Net deferred tax assets	238	$ 41
State
Income Taxes
Research and development tax credit carryforwards	$ 113

Income Taxes - Valuation allowances (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($)
Income Taxes
Valuation allowance at beginning of year	$ (10)	$ (1)
Increases recorded to income tax provision	(17)	(9)
Valuation allowance at end of year	(27)	(10)
Unrecognized tax benefits	0	0
Accrued interest or penalties related to uncertain tax positions	0	0
Interest and penalty expense recognized related to uncertain tax positions	$ 0	$ 0
Number of income tax examinations pending \| item	0

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net loss attributable to common shareholders	$ (24,406)	$ (16,029)	$ (60,647)	$ (32,172)	$ (64,873)	$ (23,973)
Denominator:
Weighted average common shares outstanding - basic and diluted	48,183,424	1,942,106	23,174,841	1,675,133	1,809,751	261,695
Net loss per share attributable to common shareholders - basic and diluted	$ (0.51)	$ (8.25)	$ (2.62)	$ (19.21)	$ (35.85)	$ (91.61)

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

Net Loss per Share - Anti-dilutive securities (Details) - shares	3 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share	7,005,014	28,113,019	27,956,280	21,730,040
Stock options
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share	5,860,168	3,012,176	3,123,064	1,583,691
Unvested restricted shares
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share	1,144,846	2,215,351	1,947,724	3,018,229
Convertible Preferred Shares (Series A, B and C)
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share		22,885,492	22,885,492	17,128,120

Commitments and Contingencies (Details) $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Mar. 31, 2017 USD ($)	Mar. 31, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Mar. 31, 2016 ft²
Lease agreements
Recorded rent expense			$ 305	$ 101	$ 714	$ 301	$ 402	$ 286
Manufacturing Commitments
Non-cancelable purchase commitments			$ 34,891		$ 34,891		7,766
Wellesley Hills office
Lease agreements
Area of leased space after expansion \| ft²									10,800
Monthly lease payments, inclusive of base rent and ancillary charges	$ 27	$ 27
Future minimum lease payments under noncancellable operating lease commitments							$ 270

Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
Benefit Plans (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Benefit Plans
Matching contributions by the Company for first 3% of each participant's salary contributed (as a percent)	100.00%	100.00%
Percentage of employees' salary contributed matched 100% by employer	3.00%	3.00%
Matching contributions by the Company for next 2% of each participant's salary contributed (as a percent)	50.00%	50.00%
Percentage of employees' salary contributed matched 50% by employer	2.00%	2.00%
Contributions made by the Company to defined contribution savings plan	$ 264	$ 143

Subsequent Events (Details) $ / shares in Units, $ in Thousands		1 Months Ended	9 Months Ended
	May 11, 2018	Feb. 28, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) shares	May 31, 2018 shares	Dec. 31, 2017 shares	Dec. 31, 2016 shares
Subsequent events
Preferred stock, shares issued (in shares)			0		22,885,492
Shares issuance costs \| $			$ 3,646
Common share authorized (in shares)		44,746,463		200,000,000	43,918,239	43,918,239
Preferred shares designated			0		22,885,492
Reverse stock split	2.73235
Convertible Preferred Shares (Series A, B and C)
Subsequent events
Preferred stock, shares issued (in shares)			0		22,885,492	17,128,120
Preferred shares designated		35,670,093	0		22,885,492	17,128,120
Series C convertible preferred shares
Subsequent events
Preferred stock, shares issued (in shares)		12,784,601
Share price per share \| $ / shares		$ 15.6438
Proceeds from issuance of shares \| $		$ 190,822
Shares issuance costs \| $		$ 9,178
Preferred shares designated		12,784,601
Class A common shares
Subsequent events
Common share authorized (in shares)		5,507,938			5,507,938	4,491,921
Class B common shares
Subsequent events
Common share authorized (in shares)		3,568,353			3,568,353	3,568,353
Subsequent event
Subsequent events
Common share authorized (in shares)		44,746,463
Subsequent event \| Convertible Preferred Shares (Series A, B and C)
Subsequent events
Preferred shares designated		35,670,093
Subsequent event \| Series C convertible preferred shares
Subsequent events
Preferred stock, shares issued (in shares)		12,784,601
Share price per share \| $ / shares		$ 15.6438
Proceeds from issuance of shares \| $		$ 190,822
Shares issuance costs \| $		$ 9,178
Subsequent event \| Class A common shares
Subsequent events
Common share authorized (in shares)		5,507,938
Subsequent event \| Class B common shares
Subsequent events
Common share authorized (in shares)		3,568,353

CONSOLIDATED BALANCE SHEETS $ in Thousands	Sep. 30, 2018 USD ($)
Current assets:
Cash and cash equivalents	$ 69,663
Short-term investments	268,200
Prepaid expenses and other current assets	3,665
Total current assets	341,528
Property and equipment, net	2,360
Restricted cash	210
Deferred tax assets	1,173
Advanced clinical payments	1,830
Total assets	347,101
Current liabilities:
Accounts payable	4,668
Accrued expenses	13,353
Accrued milestone	10,000
Total current liabilities	28,021
Deferred rent	167
Total liabilities	28,188
Commitments and contingencies (Note 11)
Shareholders’ equity (deficit):
Additional paid-in capital	470,600
Accumulated other comprehensive income	(55)
Accumulated deficit	(151,645)
Total shareholders’ equity (deficit)	318,913
Total liabilities, convertible preferred shares and shareholders’ equity (deficit)	347,101
Class A common shares
Shareholders’ equity (deficit):
Common stock value	4
Class B common shares
Shareholders’ equity (deficit):
Common stock value	1
Class A1 common shares
Shareholders’ equity (deficit):
Common stock value	4
Class B1 common shares
Shareholders’ equity (deficit):
Common stock value	$ 4

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	May 31, 2018	Feb. 28, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Preferred stock, shares issued (in shares)	0			22,885,492
Preferred stock, shares outstanding (in shares)				22,885,492
Preferred stock, aggregate liquidation preference				$ 120,000
Common stock, par value (in dollars per share)		$ 0.000273235		$ 0.000273235	$ 0.000273235
Convertible Preferred Shares (Series A, B and C)
Convertible preferred shares, par value (in dollars per share)	$ 0.000273235		$ 0.000273235	$ 0.000273235	$ 0.000273235
Preferred stock, shares issued (in shares)	0			22,885,492	17,128,120
Preferred stock, shares outstanding (in shares)	0			22,885,492	17,128,120	8,028,809
Preferred stock, aggregate liquidation preference	$ 0			$ 120,000	$ 80,000
Class A common shares
Common stock, par value (in dollars per share)	$ 0.000273235			$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	15,772,257			719,976	719,976
Common stock, shares outstanding (in shares)	15,772,257			719,976	719,976
Class B common shares
Common stock, par value (in dollars per share)	$ 0.000273235			$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	4,638,855			3,568,353	3,568,353
Common stock, shares outstanding (in shares)	4,638,855			3,568,353	3,568,353
Class A1 common shares
Common stock, par value (in dollars per share)	$ 0.000273235			$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	12,995,954			0	0
Common stock, shares outstanding (in shares)	12,995,954			0	0
Class B1 common shares
Common stock, par value (in dollars per share)	$ 0.000273235			$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	16,057,618			0	0
Common stock, shares outstanding (in shares)	16,057,618			0	0

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Operating expenses:
Research and development	$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
General and administrative	5,515	2,241	13,550	6,263	9,043	6,563
Total operating expenses	26,159	16,249	64,025	32,689	65,400	24,002
Loss from operations	(26,159)	(16,249)	(64,025)	(32,689)	(65,400)	(24,002)
Interest income	1,622	169	2,992	396	529	65
Loss before provision for income taxes	(24,537)	(16,080)	(61,033)	(32,293)	(64,871)	(23,937)
Benefit (provision) for income taxes	131	51	386	121	(2)	(36)
Net loss and comprehensive loss	$ (24,406)	$ (16,029)	$ (60,647)	$ (32,172)	$ (64,873)	$ (23,973)
Net loss per share attributable to common shareholders - basic and diluted	$ (0.51)	$ (8.25)	$ (2.62)	$ (19.21)	$ (35.85)	$ (91.61)
Weighted average common shares outstanding - basic and diluted	48,183,424	1,942,106	23,174,841	1,675,133	1,809,751	261,695

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS? DEFICIT (EQUITY) - USD ($) $ in Thousands	Convertible Preferred Shares (Series A, B and C)	Common Shares	Additional Paid-In Capital	Accumulated OCI	Accumulated Deficit	Total
Balance at the beginning of the period at Dec. 31, 2015	$ 37,398
Balance at the beginning of the period (in shares) at Dec. 31, 2015	8,028,809
Changes in temporary equity
Issuance of Series C convertible preferred shares, net of issuance costs of $9,178	$ 42,499
Issuance of Series C convertible preferred shares, net of issuance costs of $9,178 (in shares)	9,099,311
Balance at the end of the period at Dec. 31, 2016	$ 79,897					$ 79,897
Balance at the end of the period (in shares) at Dec. 31, 2016	17,128,120
Balance at the beginning of the period at Dec. 31, 2015		$ 1	$ 14		$ (2,152)	(2,137)
Balance at the beginning of the period (in shares) at Dec. 31, 2015		4,282,020
Changes in equity
Exercise of options			10			10
Exercise of options (in shares)		6,309
Share-based compensation expense			368			368
Net loss					(23,973)	(23,973)
Balance at the end of the period at Dec. 31, 2016		$ 1	392		(26,125)	(25,732)
Balance at the end of the period (in shares) at Dec. 31, 2016		4,288,329
Changes in temporary equity
Issuance of Series C convertible preferred shares, net of issuance costs of $9,178	$ 39,873
Issuance of Series C convertible preferred shares, net of issuance costs of $9,178 (in shares)	5,757,372
Balance at the end of the period at Dec. 31, 2017	$ 119,770					$ 119,770
Balance at the end of the period (in shares) at Dec. 31, 2017	22,885,492					22,885,492
Changes in equity
Share-based compensation expense			897			$ 897
Net loss					(64,873)	(64,873)
Balance at the end of the period at Dec. 31, 2017		$ 1	1,289		(90,998)	(89,708)
Balance at the end of the period (in shares) at Dec. 31, 2017		4,288,329
Changes in temporary equity
Issuance of Series C convertible preferred shares, net of issuance costs of $9,178	$ 190,822
Issuance of Series C convertible preferred shares, net of issuance costs of $9,178 (in shares)	12,784,601
Conversion of convertible preferred shares into common shares	$ (310,592)
Conversion of convertible preferred shares into common shares (in shares)	(35,670,093)
Balance at the end of the period (in shares) at Sep. 30, 2018	0
Changes in equity
Conversion of convertible preferred shares into common shares		$ 8	310,584			310,592
Conversion of convertible preferred shares into common shares (in shares)		35,670,093
Issuance of Class A common shares upon completion of initial public offering, net of underwriting discounts and commissions and offering costs		$ 4	155,532			155,536
Issuance of Class A common shares upon completion of initial public offering, net of underwriting discounts and commissions and offering costs (in shares)		9,484,202
Exercise of options			76			76
Exercise of options (in shares)		22,060
Share-based compensation expense			3,119			3,119
Unrealized gain (loss) on short term investments				$ (55)		(55)
Net loss					(60,647)	(60,647)
Balance at the end of the period at Sep. 30, 2018		$ 13	$ 470,600	$ (55)	$ (151,645)	$ 318,913
Balance at the end of the period (in shares) at Sep. 30, 2018		49,464,684

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS? DEFICIT (EQUITY) (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Series C convertible preferred shares
Issuance costs	$ 9,178

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (60,647)	$ (32,172)	$ (64,873)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	32	20	28
Share-based compensation expense	3,119	550	897
Loss on disposal of property and equipment	66
Non-cash rent expense	258
Accretion of discounts on short-term investments	(670)
Deferred income taxes	(935)	(168)	(197)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(4,027)	(1,406)	(1,185)
Accounts payable	2,981	6,013	1,006
Accrued expenses	6,449	323	4,105
Net cash used in operating activities	(53,374)	(26,840)	(50,219)
Cash flows from investing activities:
Purchases of property and equipment	(1,274)	(65)	(69)
Purchases of short-term investments	(292,584)
Proceeds from the maturities of short-term investments	25,000
Net cash used in investing activities	(268,858)	(65)	(69)
Cash flows from financing activities:
Payments of deferred offering costs	(3,646)
Proceeds from exercise of options	76
Net cash provided by financing activities	346,445	39,873	39,873
Net increase (decrease) in cash and cash equivalents and restricted cash	24,213	12,968	(10,415)
Cash and cash equivalents and restricted cash at beginning of period	45,660	56,075	56,075
Cash and cash equivalents and restricted cash at end of period	69,873	69,043	45,660
Supplemental information:
Cash paid for income taxes	345		290
Supplemental disclosure of non-cash investing and financing activities:
Deferred offering costs included in accrued expenses and accounts payable	11		25
Property and equipment included in accrued expenses and accounts payable	1,058
Series B convertible preferred shares
Cash flows from financing activities:
Proceeds from issuance of convertible preferred shares, net of issuance costs		$ 39,873	$ 39,873
Series C convertible preferred shares
Cash flows from financing activities:
Proceeds from issuance of convertible preferred shares, net of issuance costs	190,822
Class A common shares
Cash flows from financing activities:
Proceeds from issuance of Class A common shares upon completion of initial public offering, net of underwriting commissions and discounts	$ 159,193

Nature of the Business and Basis of Presentation	9 Months Ended	12 Months Ended
Nature of the Business and Basis of Presentation	Sep. 30, 2018	Dec. 31, 2017
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	1. Nature of the Business and Basis of Presentation Kiniksa Pharmaceuticals, Ltd. (the “Company”) is a biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need. The Company was incorporated in July 2015 as a Bermuda exempted company. The Company has a pipeline of product candidates, across various stages of development, currently focused on autoinflammatory and autoimmune conditions. The Company is subject to risks and uncertainties common to early‑stage companies in the biotechnology industry. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval or that any products, if approved, will be commercially viable. The Company does not currently generate revenue from sales of any products, and it may never be able to develop or commercialize a marketable product. The Company has not yet successfully completed any Phase 3 or other pivotal clinical trials, obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales and marketing activities. The Company operates in an environment of rapid technological innovation and substantial competition from pharmaceutical and biotechnological companies. In addition, the Company is dependent upon the services of its employees, consultants and service providers. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Kiniksa Pharmaceuticals Corp. (“Kiniksa US”), after elimination of all significant intercompany accounts and transactions. In assessing the consolidation requirement for variable interest entities (“VIEs”), the Company focuses on identifying whether it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE. In the event that the Company is the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE would be included in the Company’s consolidated financial statements. At December 31, 2017 and during the year then ended and at September 30, 2018 and during the three and nine months then ended, the Company was not the primary beneficiary of a VIE. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of common shares and share‑based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Unaudited Interim Consolidated Financial Information The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information. The accompanying unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. The accompanying year-end consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2018 and the results of its operations for the three and nine months ended September 30, 2018 and 2017 and its cash flows for the nine months ended September 30, 2018 and 2017. The results for the three and nine months ended September 30, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018, any other interim periods or any future year or period. Reverse Stock Split On May 11, 2018, the Company effected a 1-for- 2.73235 reverse share split of its authorized, designated, issued and outstanding common shares and preferred shares. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse share split. Initial Public Offering On May 23, 2018, the Company’s registration statement on Form S-1 relating to its initial public offering of its Class A common shares (the “IPO”) was declared effective by the Securities and Exchange Commission (“SEC”). On May 29, 2018, the Company completed the IPO of 8,477,777 Class A common shares at $18.00 per share for gross proceeds of $152,600. In addition, on June 22, 2018, the Company completed the sale of 1,006,425 Class A common shares to the underwriters of the IPO following the exercise of their over-allotment option to purchase additional shares at $18.00 per share for gross proceeds of $18,116. The aggregate net proceeds to the Company from the IPO, inclusive of the over-allotment option exercise, was $155,536 after deducting underwriting discounts and commissions and other offering costs. Upon the closing of the IPO, all convertible preferred shares then outstanding automatically converted into 5,546,019 Class A common shares, 1,070,502 Class B common shares, 12,995,954 Class A1 common shares and 16,057,618 Class B1 common shares. In connection with the closing of the IPO, the Company amended and restated its bye-laws (“Amended & Restated Bye-Laws”). Liquidity In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of September 30, 2018, the Company had an accumulated deficit of $151,645. During the nine months ended September 30, 2018, the Company incurred a net loss of $60,647 and used $53,374 of net cash in operating activities. The Company expects to continue to generate operating losses for the foreseeable future. As of September 30, 2018, the Company had cash, cash equivalents and short-term investments of $337,863. Based on its current operating plan, the Company expects this amount will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of these consolidated financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.	1. Nature of the Business and Basis of Presentation Kiniksa Pharmaceuticals, Ltd. (the “Company”) is a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need. The Company was incorporated in July 2015 as a Bermuda exempted company. The Company has a pipeline of product candidates across various stages of development, currently focused on autoinflammatory and autoimmune conditions. The Company is subject to risks and uncertainties common to early‑stage companies in the biotechnology industry. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval or that any products, if approved, will be commercially viable. The Company operates in an environment of rapid technological innovation and substantial competition from pharmaceutical and biotechnological companies. In addition, the Company is dependent upon the services of its employees, consultants and service providers. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Through December 31, 2017, the Company has funded its operations primarily with proceeds from the sale of convertible preferred shares. The Company has incurred recurring losses since its inception, including net losses of $23,973 and $64,873 for the years ended December 31, 2016 and 2017. In addition, as of December 31, 2017, the Company had an accumulated deficit of $90,998. The Company expects to continue to generate operating losses for the foreseeable future. As of February 27, 2018, the issuance date of the annual consolidated financial statements for the years ended December 31, 2016 and 2017, the Company expected that its cash and cash equivalents of $45,555 as of December 31, 2017, together with the $200,000 of gross proceeds received from the Company’s sale of Series C convertible preferred shares in February 2018 (see Note 6), would be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of the annual consolidated financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations. The Company is seeking to complete an initial public offering (“IPO”) of its common shares. Upon the closing of a qualified public offering, on specified terms, the Company’s outstanding convertible preferred shares will automatically convert into common shares (see Note 6). In the event the Company does not complete an IPO, the Company expects to seek additional funding through private equity financings, debt financings, or other capital sources, which may include collaborations with other companies, government funding arrangements or other strategic transactions. The Company may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s shareholders. If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

Short-term Investments

Concentrations of Credit Risk

Restricted Cash

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

Research and Development Costs

Research Contract Costs and Accruals

Share‑Based Compensation

Net Income (Loss) per Share

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

2. Summary of Significant Accounting Policies

Principles of Consolidation

Use of Estimates

Cash and Cash Equivalents

The Company classifies deposits in banks, money market funds and cash invested temporarily in various instruments with maturities of three months or less at the time of purchase as cash and cash equivalents. At December 31, 2016 and 2017, cash and cash equivalents consisted principally of U.S. Treasury notes, amounts held in money market accounts and cash on deposit at commercial banks.

Concentrations of Credit Risk

Restricted Cash

Property and Equipment


		Estimated Useful Life
Computer hardware and software		3 - 5 years
Vehicles		5 years
Laboratory and facility equipment		5 years
Furniture and fixtures		5 - 7 years
Leasehold improvements		Shorter of estimated useful life or lease term

Impairment of Long-Lived Assets

Deferred Offering Costs

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

The Company’s restricted cash, which is held in a money market fund, is carried at fair value, determined based on Level 1 inputs in the fair value hierarchy described above (see Note 3). The Company’s cash equivalents, consisting of money market accounts and U.S. Treasury notes, are carried at fair value, determined based on Level 1 and 2 inputs in the fair value hierarchy described above (see Note 3). The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these assets and liabilities.

Segment Information

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, share‑based compensation expense, allocated facility‑related and depreciation expenses, third‑party license fees and external costs of outside vendors engaged to conduct clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non‑refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with companies both inside and outside of the United States. The related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Patent Costs

Share‑Based Compensation

The fair value of each restricted share award is estimated on the date of grant based on the fair value of the Company’s Class A or Class B common shares on that same date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the award, the risk-free interest rate, and expected dividends (see Note 8). The Company historically has been a private company and lacks company-specific historical and implied volatility information for its shares. Therefore, it estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

Comprehensive Loss

Income Taxes

Net Income (Loss) per Share

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The guidance is effective for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements.

Fair Value of Financial Assets and Liabilities

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities


	Fair Value Measurements
	as of September 30, 2018 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		5,299		—		—		5,299
Cash equivalents — U.S. Treasury notes		—		15,336		—		15,336
Short-term investments - U.S. Treasury notes		—		268,200		—		268,200
	$	5,509	$	283,536	$	—	$	289,045


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587

During the periods ended September 30, 2018 and December 31, 2017 there were no transfers between Level 1, Level 2 and Level 3.

3. Fair Value of Financial Assets and Liabilities


	Fair Value Measurements
	as of December 31, 2016 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		550		—		—		550
Cash equivalents — U.S. Treasury notes		—		52,504		—		52,504
	$	655	$	52,504	$	—	$	53,159


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587

During the years ended December 31, 2016 and 2017, there were no transfers between Level 1, Level 2 and Level 3.

Property and Equipment, Net

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Property and Equipment, Net

4. Property and Equipment, Net

Property and equipment, net consisted of the following:


	September 30,		December 31,
	2018		2017
Furniture and fixtures	$	6	$	83
Computer hardware and software		94		9
Vehicles		85		85
Construction in progress		2,241		—
		2,426		177
Less: Accumulated depreciation		(66)		(52)
	$	2,360	$	125

Depreciation expense was $12 and $8 during the three months ended September 30, 2018 and 2017, respectively, and $32 and $20 during the nine months ended September 30, 2018 and 2017, respectively.

4. Property and Equipment, Net

Property and equipment, net consisted of the following:


	December 31,
	2016		2017
Furniture and fixtures	$	14	$	83
Computer hardware and software		9		9
Vehicles		85		85
		108		177
Less: Accumulated depreciation		(24)		(52)
	$	84	$	125

Depreciation expense for the years ended December 31, 2016 and 2017 was $22 and $28, respectively.

Accrued Expenses

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Convertible Preferred Shares

Accrued Expenses

5. Accrued Expenses

Accrued expenses consisted of the following:


	September 30,		December 31,
	2018		2017
Accrued employee compensation and benefits	$	3,160	$	1,570
Accrued research and development expenses		9,313		3,905
Accrued legal and professional fees		548		688
Other		332		49
	$	13,353	$	6,212

5. Accrued Expenses

Accrued expenses consisted of the following:


	December 31,
	2016		2017
Accrued employee compensation and benefits	$	986	$	1,570
Accrued research and development expenses		979		3,905
Accrued legal and professional fees		122		688
Other		3		49
	$	2,090	$	6,212

Convertible Preferred Shares

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Convertible Preferred Shares

6. Convertible Preferred Shares

In September 2016, the Company issued and sold an additional 9,099,311 Series A preferred shares at a price of $4.6707 per share for proceeds of $42,499, net of issuance costs of $1.

Prior to the conversion to common shares, the holders of the Preferred Shares had the following rights and preferences:

Voting

Conversion

Dividends

Liquidation Preference

Redemption

The Company’s bye-laws, as amended and restated, did not provide redemption rights to the holders of Preferred Shares.

6. Convertible Preferred Shares

In September 2016, the Company issued and sold an additional 9,099,311 Series A preferred shares at a price of $4.6707 per share for proceeds of $42,499, net of issuance costs of $1.

As of each balance sheet date, the Preferred Shares consisted of the following:

December 31, 2016

Preferred

Common Shares

Issued and

Carrying

Liquidation

Issuable Upon

Designated

Outstanding

Value

Preference

Conversion

Series A preferred shares

17,128,120

79,897

80,000

17,128,120


	December 31, 2017
		Preferred
	Preferred	Shares					Common Shares
	Shares	Issued and	Carrying		Liquidation		Issuable Upon
	Designated	Outstanding	Value		Preference		Conversion
Series A preferred shares	17,128,120	17,128,120	$	79,897	$	80,000	17,128,120
Series B preferred shares	5,757,372	5,757,372		39,873		40,000	5,757,372
	22,885,492	22,885,492	$	119,770	$	120,000	22,885,492

The holders of the Preferred Shares have the following rights and preferences:

Voting

Conversion

Dividends

Liquidation Preference

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event (as defined below), the holders of Preferred Shares then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its shareholders, on a pari passu basis, before any payment shall be made to the holders of common shares by reason of their ownership thereof, an amount per share equal to the greater of (i) one times the applicable Series A or Series B Original Issue Price, plus any dividends declared but unpaid thereon, and (ii) such amount per share as would have been payable had all Preferred Shares been converted into common shares immediately prior to such liquidation, dissolution, winding up or deemed liquidation event. Thereafter, the remaining assets of the Company available for distribution to its shareholders shall be distributed among the holders of common shares, pro rata based on the number of shares held by each such holder.

Redemption

The Amended Bye-Laws do not provide redemption rights to the holders of Preferred Shares.

Common Shares	9 Months Ended	12 Months Ended
Common Shares	Sep. 30, 2018	Dec. 31, 2017
Common Shares
Common Shares	7. Common Shares As of December 31, 2017, the Company’s bye-laws, as amended and restated, authorized the Company to issue 43,918,239 total shares with a par value of $0.000273235, of which 5,507,938 and 3,568,353 shares were designated as Class A and Class B common shares, respectively. In February 2018, the Company’s bye-laws were further amended and restated to, among other things, effect an increase in the number of authorized common shares to 44,746,463 shares, of which 5,507,938 shares were designated as Class A common shares and 3,568,353 shares were designated as Class B common shares. The remaining 11,956,456 shares that were not designated as common shares or Preferred Shares as of December 31, 2017 could have been designated to any class at any time in the future by the Company’s board of directors. No Class A1 common shares or Class B1 common shares were designated as of December 31, 2017. On May 23, 2018, the Company’s registration statement on Form S-1 relating to the IPO was declared effective by the SEC. On May 29, 2018, the Company completed the IPO of 8,477,777 Class A common shares at $18.00 per share for gross proceeds of $152,600. In addition, on June 22, 2018, the Company completed the sale of 1,006,425 Class A common shares to the underwriters of the IPO following the exercise of their over-allotment option to purchase additional shares at $18.00 per share for gross proceeds of $18,116. The aggregate net proceeds to the Company from the IPO, inclusive of the over-allotment option exercise, was $155,536 after deducting underwriting discounts and commissions and other offering costs. In May 2018, upon completion of the IPO (which qualified as a “Qualified IPO” under the Company’s bye-laws, as amended and restated), all outstanding Preferred Shares were converted into 5,546,019 Class A common shares, 1,070,502 Class B common shares, 12,995,954 Class A1 common shares and 16,057,618 Class B1 common shares in accordance with the Company’s bye-laws, as amended and restated. In connection with the completion of the IPO in May 2018, the Company increased the authorized capital of the Company to $54,647 consisting of 200,000,000 shares of $0.000273235 par value per share and, among other things, amended the description of different classes of shares under the Company’s Amended & Restated Bye-Laws. The rights of the holders of the Company’s Class A common shares, Class B common shares, Class A1 common shares and Class B1 common shares are identical, except with respect to voting and conversion, as described below. As of December 31, 2017, the voting, dividend and liquidation rights of the holders of the Company’s common shares were subject to and qualified by the rights, powers and preferences of the holders of the Preferred Shares as set forth above. In May 2018, following the conversion of the Preferred Shares into common shares, the voting, dividend and liquidation rights of the holders of the Company’s common shares were then subject to and qualified by the rights, powers and preferences of the holders of the preferred shares. As of September 30, 2018, no preferred shares were designated or issued. Voting Each Class A common share entitles the holder to one vote on all matters submitted to the shareholders for a vote. Each Class B common share entitles the holder to ten votes on all matters submitted to the shareholders for a vote. Holders of Class A1 common shares or Class B1 common shares have no voting rights. As of December 31, 2017, the holders of the Class A and Class B common shares, voting together as a single class, were entitled to elect one director of the Company. The holders of the Class A and Class B common shares, voting together with the holders of the Preferred Shares, voting together as a single class, were entitled to elect the remaining directors of the Company, except for the two directors of the Company that the holders of the Preferred Shares, voting together as a single class, were entitled to elect. In May 2018, following the conversion of the Preferred Shares into common shares, the holders of Class A and Class B common shares, voting together as a single class, are entitled to elect the directors of the Company. Dividends Common shareholders are entitled to receive dividends, as may be declared by the board of directors. As of December 31, 2017, these dividends were subject to the preferential dividend rights of the holders of the Company’s Preferred Shares. In May 2018, following the conversion of the Preferred Shares into common shares, these dividends are subject to the rights, powers and preferences of the preferred shares. As of September 30, 2018, no preferred shares were designated or issued. Through December 31, 2017 and September 30, 2018, no cash dividends have been declared or paid. Conversion Each Class B common share shall automatically convert into one Class A common share upon certain transfers of such shares by the holder thereof (subject to certain exceptions). Each Class B common share is convertible, at the holder’s election into one Class A common share or one Class B1 common share. Each Class A1 common share is convertible into one Class A common share at the holder’s election. Each Class B1 common share is convertible into one Class A common share or one Class B common share at the holder’s election. There are no conversion rights associated with the Company’s Class A common shares.	7. Common Shares As of December 31, 2016, and 2017, the Amended Bye‑Laws authorized the Company to issue 43,918,239 total shares with a par value of $0.000273235, of which 4,491,921 and 5,507,938 shares have been designated as Class A common shares as of December 31, 2016 and 2017, respectively, and 3,568,353 shares have been designated as Class B common shares as of December 31, 2016 and 2017. The remaining 18,729,845 and 11,956,456 shares that were not designated as common shares or Preferred Shares as of December 31, 2016 and 2017, respectively, may be designated to any class at any time in the future by the Company’s board of directors. No Class A1 common shares or Class B1 common shares were designated as of December 31, 2016 and 2017. The rights of the holders of the Company’s Class A common shares, Class B common shares, Class A1 common shares and Class B1 common shares are identical, except with respect to voting and conversion, as described below. The voting, dividend and liquidation rights of the holders of the Company’s common shares are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Shares as set forth above. Voting Each Class A common share entitles the holder to one vote on all matters submitted to the shareholders for a vote. Each Class B common share entitles the holder to ten votes on all matters submitted to the shareholders for a vote. Holders of Class A1 common shares or Class B1 common shares have no voting rights. The holders of Class A and Class B common shares, voting together as a single class, are entitled to elect one director of the Company. Dividends Common shareholders are entitled to receive dividends, as may be declared by the board of directors. These dividends are subject to the preferential dividend rights of the holders of the Company’s Preferred Shares. Through December 31, 2016 and 2017, no cash dividends have been declared or paid. Conversion Each Class B common share shall automatically convert into one Class A common share upon certain transfers of such shares by the holder thereof (subject to certain exceptions). Each Class B common share shall be convertible, at the holder’s election and at any time into one Class A common share or one Class B1 common share. Each Class A1 common share is convertible into one Class A common share at the holder’s election. Each Class B1 common share is convertible into one Class A common share or one Class B common share at the holder’s election. There are no conversion rights associated with the Company’s Class A common shares.

Share Based Compensation

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Share-Based Compensation

8. Share‑Based Compensation

2018 Incentive Award Plan

2015 Equity Incentive Plan

Shares that are expired, terminated, surrendered or canceled under the 2015 Plan without having been fully exercised will be available for future awards under the 2018 Plan.

Stock Option Grants During the Nine Months Ended September 30, 2018 and 2017

2018 Employee Share Purchase Plan

Option Valuation


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.93	%	1.90	%	2.80	%	1.97	%
Expected term (in years)	6.25		6.00		6.41		6.00
Expected volatility	74.37	%	73.88	%	74.90	%	74.23	%
Expected dividend yield	—	%	—	%	—	%	—	%

The assumptions that the Company used to determine the fair value of options granted to non-employees were as follows, presented on a weighted-average basis:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.94	%	1.97	%	2.90	%	1.97	%
Expected term (in years)	7.04		8.84		7.46		8.84
Expected volatility	74.49	%	77.93	%	74.07	%	77.93	%
Expected dividend yield	—	%	—	%	—	%	—	%

Options

Stock option activity under the Plans is summarized as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Granted	2,891,639		17.11
Exercised	(22,060)		3.46
Forfeited	(132,475)		5.16
Outstanding as of September 30, 2018	5,860,168	$	9.78	8.81	$	96,055
Options exercisable as of September 30, 2018	1,575,324	$	2.44	7.72	$	36,330
Options unvested as of September 30, 2018	4,284,844	$	12.48	9.22	$	59,725

During the nine months ended September 30, 2018, option holders exercised 22,060 options for Class A common shares with an intrinsic value of $254 for total cash proceeds of $76.

The weighted-average grant-date fair value per share of options granted during the nine months ended September 30, 2018 and 2017 was $11.69 and $2.53, respectively.

The total fair value of options vested during the nine months ended September 30, 2018 and 2017 was $1,676 and $351, respectively.

Restricted Shares

The following table summarizes restricted share activity for the nine months ended September 30, 2018:


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235
Granted	—		—	—		—
Vested	(133,812)	$	0.000273235	(669,066)	$	0.000273235
Unvested restricted shares outstanding as of September 30, 2018	178,417	$	0.000273235	966,429	$	0.000273235

The aggregate fair value of restricted shares that vested during the nine months ended September 30, 2018 and 2017 was $10,477 and $2,764, respectively.

Share‑Based Compensation

Share‑based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Research and development expenses	$	576	$	121	$	1,141	$	181
General and administrative expenses		926		201		1,978		369
	$	1,502	$	322	$	3,119	$	550

As of September 30, 2018, total unrecognized compensation cost related to the unvested share-based awards was $34,676, which is expected to be recognized over a weighted average period of 3.54 years.

8. Share‑Based Compensation

2015 Equity Incentive Plan

Shares that are expired, terminated, surrendered or canceled under the 2015 Plan without having been fully exercised will be available for future awards.

Option Valuation

The assumptions that the Company used to determine the grant-date fair value of options granted to employees and directors were as follows, presented on a weighted-average basis:


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.45	%	1.99	%
Expected term (in years)	6.25		6.25
Expected volatility	70.75	%	74.18	%
Expected dividend yield	0	%	0	%

The assumptions that the Company used to determine the fair value of options granted to non-employees were as follows, presented on a weighted-average basis:


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.94	%	2.49	%
Expected term (in years)	10.00		10.00
Expected volatility	65.85	%	78.28	%
Expected dividend yield	0	%	0	%

Options


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2016	1,583,691	$	1.64	9.10	$	356
Granted	1,546,874		3.90
Exercised	—		—
Forfeited	(7,501)		3.75
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Options exercisable as of December 31, 2017	843,454	$	1.62	8.07	$	2,580
Options unvested as of December 31, 2017	2,279,610	$	3.17	9.09	$	3,431

The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2016 and 2017 was $1.16 and $2.57, respectively.

The total fair value of options vested during the years ended December 31, 2016 and 2017 was $402 and $445, respectively.

Restricted Shares

The following table summarizes restricted share activity for the year ended December 31, 2017:


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Fair Value		Number of	Fair Value
	Shares	at Issuance		Shares	at Issuance
Unvested restricted shares outstanding as of December 31, 2016	490,646	$	0.000273235	2,527,583	$	0.000273235
Granted	—		—	—		—
Vested	(178,417)		0.000273235	(892,088)		0.000273235
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235

The aggregate fair value of restricted shares that vested during the years ended December 31, 2016 and 2017 was $2,348 and $3,973, respectively.

Share‑Based Compensation

Share‑based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended
	December 31,
	2016		2017
Research and development expenses	$	59	$	324
General and administrative expenses		309		573
	$	368	$	897

License and Acquisition Agreements	9 Months Ended	12 Months Ended
License and Acquisition Agreements	Sep. 30, 2018	Dec. 31, 2017
License and Acquisition Agreements
License and Acquisition Agreements	9. License and Acquisition Agreements Biogen Asset Purchase Agreement In September 2016, the Company entered into an asset purchase agreement (the "Biogen Agreement") with Biogen MA Inc. ("Biogen") to acquire all of Biogen's right, title and interest in and to certain assets used in or relating to KPL-716 and other antibodies covered by certain patent rights, including patents and other intellectual property rights, clinical data, know-how, and clinical drug supply. In addition, Biogen granted to the Company a non-exclusive, sublicensable, worldwide license to certain background patent rights related to the KPL-716 program. The Company is obligated to use commercially reasonable efforts to develop and commercialize such acquired products. In exchange for these rights, the Company made an upfront payment to Biogen of $11,500 and a technology transfer payment of $500. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment and technology transfer payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Biogen Agreement, the Company is obligated to make milestone payments to Biogen of up to $179,000 upon the achievement of specified clinical and regulatory milestones in multiple indications in various territories. During the year ended December 31, 2017, the Company made a milestone payment of $4,000 associated with the achievement of a specified clinical milestone event. Additionally, the Company could be obligated to make up to an aggregate of up to $150,000 of payments upon the achievement of specified annual net sales milestones and to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the high single-digit percentages and ending below the teens. The Company also agreed to pay certain obligations under third‑party contracts retained by Biogen that relate to the KPL‑716 program. Under these retained contracts, the Company paid a one‑time upfront sublicense fee of $150 and is obligated to pay insignificant annual maintenance fees as well as clinical and regulatory milestone payments of up to an aggregate of $1,575. The Company made insignificant payments in connection with the retained contracts during the three and nine months ended September 30, 2018 and 2017. The Biogen Agreement will terminate upon the expiration of all payment obligations with respect to the last product in all countries in the territory. The Company has the right to terminate the agreement with 90 days’ prior written notice. Both parties may terminate by mutual written consent or in the event of material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). During the three months ended September 30, 2018 and 2017 and the nine months ended September 30, 2018 and 2017, the Company recorded research and development expense of $11, $11, $41 and $4,158, respectively, in connection with milestone and other payments due under the Biogen Agreement. Novo Nordisk License Agreement In August 2017, the Company entered into a license agreement (the “Novo Nordisk Agreement”) with Novo Nordisk A/S (“Novo Nordisk”), pursuant to which the Company has been granted an exclusive, sublicensable, worldwide license under certain intellectual property rights controlled by Novo Nordisk to make, use, develop and commercialize KPL‑045 for all indications. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In consideration for the license, the Company made an upfront payment of $1,500 to Novo Nordisk. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Novo Nordisk Agreement, the Company was also required to make a payment of $150 upon completion of the technology transfer by Novo Nordisk. The technology was transferred during the nine months ended September 30, 2018 and, as a result, this payment was made and is recorded in the Company's consolidated statement of operations for the nine months ended September 30, 2018. In addition, the Company is obligated to make milestone payments upon the achievement of specified clinical, regulatory and initial sales milestones and upon the achievement of annual net sales thresholds, including a payment of $1,000 upon the earlier to occur of a specified regulatory milestone and January 2020, unless the Novo Nordisk Agreement is earlier terminated by either party. As of September 30, 2018 and December 31, 2017, the Company determined that the payment related to the milestone was not probable and, therefore, no amount was recorded in the Company's consolidated statement of operations and comprehensive loss during the nine months ended September 30, 2018 and 2017. The Company has also agreed to pay royalties on annual net sales of products licensed under the agreement. Under the Novo Nordisk Agreement, the Company is solely responsible for all development, regulatory and commercial activities and costs. The Company is also responsible for costs related to filing, prosecuting and maintaining the licensed patent rights. The Novo Nordisk Agreement will terminate upon expiration of the last‑to‑expire royalty term for any licensed product in the territories, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for uncured material breach of the agreement by the other party. Novo Nordisk has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may also terminate the agreement for any reason upon prior written notice to Novo Nordisk. During the three and nine months ended September 30, 2018, the Company recorded research and development expense of $4, and $154, respectively, in connection with milestone payments due under the Novo Nordisk Agreement. During the three and nine months ended September 30, 2017, the Company recorded research and development expense of $1,500, in connection with the upfront payment due under the Novo Nordisk Agreement. Primatope Stock Purchase Option Agreement In September 2017, the Company entered into a stock purchase option agreement (the “Primatope Agreement”) with Primatope Therapeutics, Inc. (“Primatope”), pursuant to which the Company has been granted a license to certain intellectual property rights controlled by Primatope to research, develop, and manufacture the pre‑clinical antibody, KPL‑404. The agreement provides the Company with an exclusive call option to purchase 100% of the capital stock of Primatope. Upon execution of the agreement, the Company made $500 in upfront payments for the initial option period through April 2018 (the “Initial Option Period”). The Primatope Agreement allows up to three extensions of the Initial Option Period through January 2019 (including the initial option period, the “Option Period”) for total extension payments of up to $800. Through October 2018, the Company made payments totaling $600 to extend the Option Period to November 15, 2018. During the Option Period, the Company may conduct research and pre‑clinical work to assess the viability of the asset. If the call option is exercised, the Company will acquire all of the outstanding equity of Primatope in exchange for upfront consideration of $10,000 as well as potential milestone payments of up to $10,000. The upfront payment and the milestone payments may be paid at the option of the Company in a combination of cash and issuance of the Company’s Class A common shares. The Company has determined that the call option represents a variable interest in Primatope and that Primatope is a VIE. However, as the Company has no ability to control the board of directors or direct the ongoing activities of Primatope, the Company does not have power over the activities that most significantly impact Primatope’s economic performance and is not the primary beneficiary of Primatope. As a result, the Company does not consolidate the assets, liabilities, and results of operations of Primatope. Either party may terminate the Primatope Agreement for uncured material breach of the agreement by the other party or by mutual written consent. During the three and nine months ended September 30, 2018, the Company recorded research and development expense of $250 and $500, respectively, related to the extension of the option period under the Primatope Agreement. During the three and nine months ended September 30, 2017, the Company recorded research and development expense of $500, in connection with upfront payments related to the Initial Option Period under the Primatope Agreement. Regeneron License Agreement In September 2017, the Company entered into a license agreement (the “Regeneron Agreement”) with Regeneron Pharmaceuticals, Inc. (“Regeneron”), pursuant to which the Company has been granted an exclusive, sublicensable license under certain intellectual property rights controlled by Regeneron to develop and commercialize rilonacept in certain fields and territories. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In exchange for these rights, the Company made an upfront payment of $5,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Regeneron Agreement, the Company is also obligated to make payments to Regeneron of up to an aggregate of $27,500 upon the achievement of specified regulatory milestones. Upon commercialization of the licensed products, the parties will share profits equally, after deducting certain commercialization expenses subject to specified limits. Under the Regeneron Agreement, the Company is solely responsible for all development and commercialization activities and costs in its territories. The Company is also responsible for costs related to the filing, prosecution and maintenance of certain licensed patent rights. The parties also entered into a clinical supply agreement under which Regeneron agreed to manufacture the developed product during the clinical phase. During the three and nine months ended September 30, 2018, the Company recorded research and development expense of $257 and $1,835, respectively, related to the purchase of drug materials under this agreement. During the three and nine months ended September 30, 2017, the Company did not incur any research and development expense related to the purchase of drug materials under this agreement. As of September 30, 2018 and December 31, 2017, the Company has non-cancelable purchase commitments under the clinical supply agreement (see Note 11). The Regeneron Agreement will expire when the Company is no longer developing or commercializing any licensed product under the Regeneron Agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). Regeneron has the right to terminate the agreement if the Company suspends its development or commercialization activities for a consecutive 12-month period or does not grant a sublicense to a third‑party to perform such activities, or if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time that is 18 months after the effective date of the agreement with 180 days’ written notice or with one years’ written notice if the Company terminates the agreement following U.S. marketing approval of a rilonacept product developed by the Company. The Company may also terminate the agreement with three month’s written notice if the products are determined to have certain safety concerns. The Company did not incur any research and development expense directly related to milestone payments due under the Regeneron Agreement during the three and nine months ended September 30, 2018. During the three and nine months ended September 30, 2017, the Company recorded research and development expense of $5,000, in connection with the upfront payment due under the Regeneron Agreement. MedImmune License Agreement In December 2017, the Company entered into a license agreement (the “MedImmune Agreement”) with MedImmune, Limited (“MedImmune”), pursuant to which MedImmune granted the Company an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab. Under the MedImmune Agreement, the Company also acquired reference rights to relevant manufacturing and regulatory documents and MedImmune’s existing supply of mavrilimumab drug substance and product. The Company is obligated to use commercially reasonable efforts to develop and commercialize the licensed products. In exchange for these rights, the Company made an upfront payment of $8,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. In addition, the Company is obligated to make clinical, regulatory and initial sales milestone payments of up to $72,500 in aggregate for the first two indications, including, a $5,000 pass-through payment due upon the achievement of a specified clinical milestone event which is anticipated to be met in the fourth quarter of 2018. Also included is a milestone payment of $10,000 due upon the earlier to occur of a specified regulatory milestone and December 31, 2018, unless the MedImmune Agreement is earlier terminated by either party. As of September 30, 2018 and December 31, 2017, the Company determined that the payment related to this milestone was probable and, therefore, recognized research and development expense and an accrued milestone of $10,000 during the year ended December 31, 2017. In addition, the Company is obligated to make clinical and regulatory milestone payments of up to $15,000 in the aggregate for each subsequent indication. The Company is obligated to make milestone payments to MedImmune of up to $85,000 upon the achievement of annual net sales thresholds up to, but excluding, $1,000,000 in annual net sales as well as additional milestone payments aggregating up to $1,100,000 upon the achievement of additional specified annual net sales thresholds starting at $1,000,000 and higher. The Company has also agreed to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the low double‑digit percentages and ending at twenty percent. Royalty rates are subject to reductions upon certain events. The Company is solely responsible for all development, manufacturing, and commercial activities and costs of the licensed products, including clinical studies or other tests necessary to support the use of a licensed product. The Company is also responsible for costs related to the filing, prosecution and maintenance of the licensed patent rights. The MedImmune Agreement will expire upon the expiration of the royalty term in the last country for the last indication, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days. MedImmune has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time upon 90 days’ prior written notice. During the three and nine months ended September 30, 2018 and 2017, the Company did not record research and development expense in connection with milestone payments due under the MedImmune Agreement.	9. License and Acquisition Agreements Biogen Asset Purchase Agreement In September 2016, the Company entered into an asset purchase agreement (the “Biogen Agreement”) with Biogen MA Inc. (“Biogen”) to acquire all of Biogen's right, title and interest in and to certain assets used in or relating to KPL-716 and other antibodies covered by certain patent rights, including patents and other intellectual property rights, clinical data, know-how, and clinical drug supply. In addition, Biogen granted to the Company a non-exclusive, sublicensable, worldwide license to certain background patent rights related to the KPL-716 program. The Company is obligated to use commercially reasonable efforts to develop and commercialize such acquired products. In exchange for these rights, the Company made an upfront payment to Biogen of $11,500 and a technology transfer payment of $500. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment and technology transfer payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Biogen Agreement, the Company is obligated to make milestone payments to Biogen of up to $179,000 upon the achievement of specified clinical and regulatory milestones in multiple indications in various territories. During the year ended December 31, 2017, the Company made a milestone payment of $4,000 associated with the achievement of a specified clinical milestone event. Additionally, the Company could be obligated to make up to an aggregate of up to $150,000 of payments upon the achievement of specified annual net sales milestones and to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the high single-digit percentages and ending below the teens. The Company also agreed to pay certain obligations under third‑party contracts retained by Biogen that relate to the KPL‑716 program. Under these retained contracts, the Company paid a one‑time upfront sublicense fee of $150 and is obligated to pay insignificant annual maintenance fees as well as clinical and regulatory milestone payments of up to an aggregate of $1,575. During the year ended December 31, 2017 the Company paid $75 upon the achievement of certain milestones in connection with the retained contracts. The Biogen Agreement will terminate upon the expiration of all payment obligations with respect to the last product in all countries in the territory. The Company has the right to terminate the agreement with 90 days’ prior written notice. Both parties may terminate by mutual written consent or in the event of material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). During the years ended December 31, 2016 and 2017, the Company recorded research and development expense in connection with the Biogen Agreement of $12,100 and $4,169, respectively. Novo Nordisk License Agreement In August 2017, the Company entered into a license agreement (the “Novo Nordisk Agreement”) with Novo Nordisk A/S (“Novo Nordisk”), pursuant to which the Company has been granted an exclusive, sublicensable, worldwide license under certain intellectual property rights controlled by Novo Nordisk to make, use, develop and commercialize KPL‑045 for all indications. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In consideration for the license, the Company made an upfront payment of $1,500 to Novo Nordisk. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Novo Nordisk Agreement, the Company is also required to make a payment of $150 upon completion of the technology transfer by Novo Nordisk. In addition, the Company is obligated to make milestone payments upon the achievement of specified clinical, regulatory and initial sales milestones and upon the achievement of annual net sales thresholds, including a payment of $1,000 upon the earlier to occur of a specified regulatory milestone and January 2020, unless the Novo Nordisk Agreement is earlier terminated by either party. As of December 31, 2017, the Company determined that the payment related to the milestone was not probable and, therefore, no amount was recorded in the Company's consolidated statement of operations and comprehensive loss during the year ended December 31, 2017. The Company has also agreed to pay royalties on annual net sales of products licensed under the agreement. Under the Novo Nordisk Agreement, the Company is solely responsible for all development, regulatory and commercial activities and costs. The Company is also responsible for costs related to filing, prosecuting and maintaining the licensed patent rights. The Novo Nordisk Agreement will terminate upon expiration of the last‑to‑expire royalty term for any licensed product in the territories, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for uncured material breach of the agreement by the other party. Novo Nordisk has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may also terminate the agreement for any reason upon prior written notice to Novo Nordisk. During the year ended December 31, 2017, the Company recorded research and development expense of $1,500, in connection with the Novo Nordisk Agreement. Primatope Stock Purchase Option Agreement In September 2017, the Company entered into a stock purchase option agreement (the “Primatope Agreement”) with Primatope Therapeutics, Inc. (“Primatope”), pursuant to which the Company has been granted a license to certain intellectual property rights controlled by Primatope to research, develop, and manufacture the pre‑clinical antibody, KPL‑404. The agreement provides the Company with an exclusive call option to purchase 100% of the capital stock of Primatope. Upon execution of the agreement, the Company made $500 in upfront payments for the initial option period through April 2018 (the “Initial Option Period”). The Primatope Agreement allows up to three extensions of the Initial Option Period through January 2019 (including the initial option period, the “Option Period”) for total extension payments of up to $800. In April 2018, the Company made a payment of $250 to extend the Option Period for an additional three months to June 2018. During the Option Period, the Company may conduct research and pre‑clinical work to assess the viability of the asset. If the call option is exercised, the Company will acquire all of the outstanding equity of Primatope in exchange for upfront consideration of $10,000 as well as potential milestone payments of up to $10,000. The upfront payment and the milestone payments may be paid in a combination of cash and issuance of the Company’s Class A common shares. The Company has determined that the call option represents a variable interest in Primatope and that Primatope is a VIE. However, as the Company has no ability to control the board of directors or direct the ongoing activities of Primatope, the Company does not have power over the activities that most significantly impact Primatope’s economic performance and is not the primary beneficiary of Primatope. As a result, the Company does not consolidate the assets, liabilities, and results of operations of Primatope. Either party may terminate the Primatope Agreement for uncured material breach of the agreement by the other party or by mutual written consent. During the year ended December 31, 2017, the Company recorded research and development expense of $500 in connection with the Primatope Agreement. Regeneron License Agreement In September 2017, the Company entered into a license agreement (the “Regeneron Agreement”) with Regeneron Pharmaceuticals, Inc. (“Regeneron”), pursuant to which the Company has been granted an exclusive, sublicensable license under certain intellectual property rights controlled by Regeneron to develop and commercialize rilonacept in certain fields and territories. The Company is obligated to use commercially reasonable efforts to develop and commercialize such licensed products. In exchange for these rights, the Company made an upfront payment of $5,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. Under the Regeneron Agreement, the Company is also obligated to make payments to Regeneron of up to an aggregate of $27,500 upon the achievement of specified regulatory milestones. Upon commercialization of the licensed products, the parties will share profits equally, after deducting certain commercialization expenses subject to specified limits. Under the Regeneron Agreement, the Company is solely responsible for all development and commercialization activities and costs in its respective territory. The Company is also responsible for costs related to the filing, prosecution and maintenance of certain licensed patent rights. The parties also entered into a clinical supply agreement under which Regeneron agreed to manufacture the developed product during the clinical phase. During the year ended December 31, 2017, the Company recognized research and development expense of $208 related to the purchase of drug materials under this agreement. As of December 31, 2017, the Company has non-cancelable purchase commitments under the clinical supply agreement (see Note 12). The Regeneron Agreement will expire when the Company is no longer developing or commercializing any licensed product under the Regeneron Agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days (or 30 days for payment‑related breaches). Regeneron has the right to terminate the agreement if the Company suspends its development or commercialization activities for a consecutive 12 month period or does not grant a sublicense to a third‑party to perform such activities, or if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time that is 18 months after the effective date of the agreement with 180 days’ written notice or with one years’ written notice if we terminate the agreement following U.S. marketing approval of a rilonacept product developed by the Company. The Company may also terminate the agreement with three month’s written notice if the products are determined to have certain safety concerns. During the year ended December 31, 2017, the Company recorded research and development expense of $5,208, in connection with the agreements with Regeneron. MedImmune License Agreement In December 2017, the Company entered into a license agreement (the “MedImmune Agreement”) with MedImmune, Limited (“MedImmune”), pursuant to which MedImmune granted the Company an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab. Under the MedImmune Agreement, the Company also acquired reference rights to relevant manufacturing and regulatory documents and MedImmune’s existing supply of mavrilimumab drug substance and product. The Company is obligated use commercially reasonable efforts to develop and commercialize the licensed products. In exchange for these rights, the Company made an upfront payment of $8,000. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations and comprehensive loss because the acquired technology represented in‑process research and development and had no alternative future use. In addition, the Company is obligated to make clinical, regulatory and initial sales milestone payments of up to $72,500 in aggregate for the first two indications, including a milestone payment of $10,000 upon the earlier to occur of a specified regulatory milestone and December 31, 2018, unless the MedImmune Agreement is earlier terminated by either party. As of December 31, 2017, the Company determined that the payment related to this milestone was probable and, therefore, recognized research and development expense and an accrued milestone of $10,000 during the year ended December 31, 2017. In addition, the Company is obligated to make clinical and regulatory milestone payments of up to $15,000 in the aggregate for each subsequent indication. The Company is obligated to make milestone payments to MedImmune of up to $85,000 upon the achievement of annual net sales thresholds up to, but excluding, $1,000,000 in annual net sales as well as additional milestone payments aggregating up to $1,100,000 upon the achievement of additional specified annual net sales thresholds starting at $1,000,000 and higher. The Company has also agreed to pay tiered royalties on escalating tiers of annual net sales of licensed products starting in the low double‑digit percentages and ending at twenty percent. Royalty rates are subject to reductions upon certain events. The Company is solely responsible for all development, manufacturing, and commercial activities and costs of the licensed products, including clinical studies or other tests necessary to support the use of a licensed product. The Company is also responsible for costs related to the filing, prosecution and maintenance of the licensed patent rights. The MedImmune Agreement will expire upon the expiration of the royalty term in the last country for the last indication, as defined in the agreement. Either party may terminate the agreement upon the other party’s insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured for 90 days. MedImmune has the right to terminate the agreement if the Company challenges any of the licensed patent rights. The Company may terminate the agreement at any time upon 90 days’ prior written notice. During the year ended December 31, 2017, the Company recorded research and development expense of $18,000 in connection with the MedImmune Agreement.

Net Loss per Share

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Commitments and Contingencies

Net Loss per Share

10. Net Loss per Share

Net Loss per Share Attributable to Common Shareholders

Basic and diluted net loss per share attributable to common shareholders was calculated as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator:
Net loss attributable to common shareholders	$	(24,406)	$	(16,029)	$	(60,647)	$	(32,172)
Denominator:
Weighted average common shares outstanding—basic and diluted		48,183,424		1,942,106		23,174,841		1,675,133
Net loss per share attributable to common shareholders— basic and diluted	$	(0.51)	$	(8.25)	$	(2.62)	$	(19.21)


	As of September 30,
	2018	2017

Options to purchase common shares	5,860,168	3,012,176
Unvested restricted shares	1,144,846	2,215,351
Convertible preferred shares (as converted to common shares)	—	22,885,492
	7,005,014	28,113,019

11. Net Loss per Share

Basic and diluted net loss per share attributable to common shareholders was calculated as follows:


	Year Ended
	December 31,
	2016		2017
Numerator:
Net loss attributable to common shareholders	$	(23,973)	$	(64,873)
Denominator:
Weighted average common shares outstanding — basic and diluted		261,695		1,809,751
Net loss per share attributable to common shareholders — basic and diluted	$	(91.61)	$	(35.85)

The Company’s unvested restricted common shares have been excluded from the computation of basic net loss per share attributable to common shareholders.


	Year Ended
	December 31,
	2016	2017

Options to purchase common shares	1,583,691	3,123,064
Unvested restricted shares	3,018,229	1,947,724
Convertible preferred shares (as converted to common shares)	17,128,120	22,885,492
	21,730,040	27,956,280

Commitments and Contingencies

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Commitments and Contingencies

11. Commitments and Contingencies

Lease Agreements

The following table summarizes the future minimum lease payments under non‑cancelable operating lease commitments, for the Lexington office, as of September 30, 2018:


Year Ending December 31,
2018	$	218
2019		872
2020		872
2021		508
	$	2,470

License Agreements

The Company has entered into license agreements with various parties under which it is obligated to make contingent and non‑contingent payments (see Note 9).

Manufacturing Commitments

Indemnification Agreements

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

12. Commitments and Contingencies

Lease Agreements

License Agreements

The Company has entered into license agreements with various parties under which it is obligated to make contingent and non‑contingent payments (see Note 9).

Manufacturing Commitments

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2016 or 2017.

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Kiniksa Pharmaceuticals Corp. (“Kiniksa US”), after elimination of all significant intercompany accounts and transactions.

In assessing the consolidation requirement for variable interest entities (“VIEs”), the Company focuses on identifying whether it has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE. In the event that the Company is the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE would be included in the Company’s consolidated financial statements. At December 31, 2017 and during the year then ended and at September 30, 2018 and during the three and nine months then ended, the Company was not the primary beneficiary of a VIE.

Principles of Consolidation

Use of Estimates

Unaudited Interim Consolidated Financial Information

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information. The accompanying unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. The accompanying year-end consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2018 and the results of its operations for the three and nine months ended September 30, 2018 and 2017 and its cash flows for the nine months ended September 30, 2018 and 2017. The results for the three and nine months ended September 30, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018, any other interim periods or any future year or period.

Cash and Cash Equivalents

The Company classifies deposits in banks, money market funds and cash invested temporarily in various instruments with maturities of three months or less at the time of purchase as cash and cash equivalents. At December 31, 2016 and 2017, cash and cash equivalents consisted principally of U.S. Treasury notes, amounts held in money market accounts and cash on deposit at commercial banks.

Short-term Investments

Concentrations of Credit Risk

Restricted Cash

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

The Company’s restricted cash, which is held in a money market fund, is carried at fair value, determined based on Level 1 inputs in the fair value hierarchy described above (see Note 3). The Company’s cash equivalents, consisting of money market accounts and U.S. Treasury notes, are carried at fair value, determined based on Level 1 and 2 inputs in the fair value hierarchy described above (see Note 3). The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short‑term nature of these assets and liabilities.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, share‑based compensation expense, allocated facility‑related and depreciation expenses, third‑party license fees and external costs of outside vendors engaged to conduct clinical development activities and clinical trials as well as to manufacture clinical trial materials. Non‑refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with companies both inside and outside of the United States. The related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Net Income (Loss) per Share

Share‑Based Compensation

The fair value of each restricted share award is estimated on the date of grant based on the fair value of the Company’s Class A or Class B common shares on that same date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the award, the risk-free interest rate, and expected dividends (see Note 8). The Company historically has been a private company and lacks company-specific historical and implied volatility information for its shares. Therefore, it estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

Recently Adopted and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The guidance is effective for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements.

Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of financial assets and liabilities measured at fair value on a recurring basis


	Fair Value Measurements
	as of September 30, 2018 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		5,299		—		—		5,299
Cash equivalents — U.S. Treasury notes		—		15,336		—		15,336
Short-term investments - U.S. Treasury notes		—		268,200		—		268,200
	$	5,509	$	283,536	$	—	$	289,045


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587


	Fair Value Measurements
	as of December 31, 2016 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		550		—		—		550
Cash equivalents — U.S. Treasury notes		—		52,504		—		52,504
	$	655	$	52,504	$	—	$	53,159


	Fair Value Measurements
	as of December 31, 2017 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	105	$	—	$	—	$	105
Cash equivalents — money market funds		5,487		—		—		5,487
Cash equivalents — U.S. Treasury notes		—		14,995		—		14,995
	$	5,592	$	14,995	$	—	$	20,587

Property and Equipment, Net (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of property and equipment, net


	September 30,		December 31,
	2018		2017
Furniture and fixtures	$	6	$	83
Computer hardware and software		94		9
Vehicles		85		85
Construction in progress		2,241		—
		2,426		177
Less: Accumulated depreciation		(66)		(52)
	$	2,360	$	125


	December 31,
	2016		2017
Furniture and fixtures	$	14	$	83
Computer hardware and software		9		9
Vehicles		85		85
		108		177
Less: Accumulated depreciation		(24)		(52)
	$	84	$	125

Accrued Expenses (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of accrued expenses


	September 30,		December 31,
	2018		2017
Accrued employee compensation and benefits	$	3,160	$	1,570
Accrued research and development expenses		9,313		3,905
Accrued legal and professional fees		548		688
Other		332		49
	$	13,353	$	6,212


	December 31,
	2016		2017
Accrued employee compensation and benefits	$	986	$	1,570
Accrued research and development expenses		979		3,905
Accrued legal and professional fees		122		688
Other		3		49
	$	2,090	$	6,212

Share Based Compensation (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of stock option activity under the Plans


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Granted	2,891,639		17.11
Exercised	(22,060)		3.46
Forfeited	(132,475)		5.16
Outstanding as of September 30, 2018	5,860,168	$	9.78	8.81	$	96,055
Options exercisable as of September 30, 2018	1,575,324	$	2.44	7.72	$	36,330
Options unvested as of September 30, 2018	4,284,844	$	12.48	9.22	$	59,725


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2016	1,583,691	$	1.64	9.10	$	356
Granted	1,546,874		3.90
Exercised	—		—
Forfeited	(7,501)		3.75
Outstanding as of December 31, 2017	3,123,064	$	2.75	8.82	$	6,010
Options exercisable as of December 31, 2017	843,454	$	1.62	8.07	$	2,580
Options unvested as of December 31, 2017	2,279,610	$	3.17	9.09	$	3,431

Schedule of restricted share activity


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235
Granted	—		—	—		—
Vested	(133,812)	$	0.000273235	(669,066)	$	0.000273235
Unvested restricted shares outstanding as of September 30, 2018	178,417	$	0.000273235	966,429	$	0.000273235


	Class A			Class B
		Weighted			Weighted
		Average			Average
	Number of	Fair Value		Number of	Fair Value
	Shares	at Issuance		Shares	at Issuance
Unvested restricted shares outstanding as of December 31, 2016	490,646	$	0.000273235	2,527,583	$	0.000273235
Granted	—		—	—		—
Vested	(178,417)		0.000273235	(892,088)		0.000273235
Unvested restricted shares outstanding as of December 31, 2017	312,229	$	0.000273235	1,635,495	$	0.000273235

Schedule of share-based compensation expense was classified in the consolidated statements of operations and comprehensive loss


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Research and development expenses	$	576	$	121	$	1,141	$	181
General and administrative expenses		926		201		1,978		369
	$	1,502	$	322	$	3,119	$	550


	Year Ended
	December 31,
	2016		2017
Research and development expenses	$	59	$	324
General and administrative expenses		309		573
	$	368	$	897

Employees and directors

Schedule of stock option valuation assumptions presented on weighted average basis


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.93	%	1.90	%	2.80	%	1.97	%
Expected term (in years)	6.25		6.00		6.41		6.00
Expected volatility	74.37	%	73.88	%	74.90	%	74.23	%
Expected dividend yield	—	%	—	%	—	%	—	%


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.45	%	1.99	%
Expected term (in years)	6.25		6.25
Expected volatility	70.75	%	74.18	%
Expected dividend yield	0	%	0	%

Non-employees

Schedule of stock option valuation assumptions presented on weighted average basis


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Risk-free interest rate	2.94	%	1.97	%	2.90	%	1.97	%
Expected term (in years)	7.04		8.84		7.46		8.84
Expected volatility	74.49	%	77.93	%	74.07	%	77.93	%
Expected dividend yield	—	%	—	%	—	%	—	%


	Year Ended
	December 31,
	2016		2017
Risk-free interest rate	1.94	%	2.49	%
Expected term (in years)	10.00		10.00
Expected volatility	65.85	%	78.28	%
Expected dividend yield	0	%	0	%

Net Loss per Share (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Schedule of basic and diluted net loss per share attributable to common shareholders


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator:
Net loss attributable to common shareholders	$	(24,406)	$	(16,029)	$	(60,647)	$	(32,172)
Denominator:
Weighted average common shares outstanding—basic and diluted		48,183,424		1,942,106		23,174,841		1,675,133
Net loss per share attributable to common shareholders— basic and diluted	$	(0.51)	$	(8.25)	$	(2.62)	$	(19.21)


	Year Ended
	December 31,
	2016		2017
Numerator:
Net loss attributable to common shareholders	$	(23,973)	$	(64,873)
Denominator:
Weighted average common shares outstanding — basic and diluted		261,695		1,809,751
Net loss per share attributable to common shareholders — basic and diluted	$	(91.61)	$	(35.85)

Schedule of anti-dilutive securities excluded from the computation of diluted net loss per share attributable to common shareholders


	As of September 30,
	2018	2017

Options to purchase common shares	5,860,168	3,012,176
Unvested restricted shares	1,144,846	2,215,351
Convertible preferred shares (as converted to common shares)	—	22,885,492
	7,005,014	28,113,019


	Year Ended
	December 31,
	2016	2017

Options to purchase common shares	1,583,691	3,123,064
Unvested restricted shares	3,018,229	1,947,724
Convertible preferred shares (as converted to common shares)	17,128,120	22,885,492
	21,730,040	27,956,280

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies

Schedule of future minimum lease payments under non-cancelable operating lease commitments

The following table summarizes the future minimum lease payments under non‑cancelable operating lease commitments, for the Lexington office, as of September 30, 2018:


Year Ending December 31,
2018	$	218
2019		872
2020		872
2021		508
	$	2,470

Nature of the Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 22, 2018 USD ($) $ / shares shares	May 29, 2018 USD ($) $ / shares shares	May 11, 2018	Sep. 30, 2018 USD ($) shares	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) shares	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($)	May 31, 2018 shares
Nature of the Business and Basis of Presentation
Reverse stock split			2.73235
Proceeds form IPO \| $						$ 155,536
Number of shares issued on conversion of convertible preferred shares \| shares								22,885,492
Liquidity
Accumulated deficit \| $				$ 151,645		151,645		$ 90,998	$ 26,125
Net losses \| $				24,406	$ 16,029	60,647	$ 32,172	64,873	23,973
Cash used in operations \| $						53,374	$ 26,840	$ 50,219	$ 21,867
Cash, cash equivalents and short-term investments \| $				$ 337,863		$ 337,863
Class A common shares
Nature of the Business and Basis of Presentation
Number of shares issued on conversion of convertible preferred shares \| shares	5,546,019			5,546,019		5,546,019				5,546,019
Class B common shares
Nature of the Business and Basis of Presentation
Number of shares issued on conversion of convertible preferred shares \| shares	1,070,502			1,070,502		1,070,502				1,070,502
Class A1 common shares
Nature of the Business and Basis of Presentation
Number of shares issued on conversion of convertible preferred shares \| shares	12,995,954
Class B1 common shares
Nature of the Business and Basis of Presentation
Number of shares issued on conversion of convertible preferred shares \| shares	16,057,618
Initial Public Offering \| Class A common shares
Nature of the Business and Basis of Presentation
Issuance of stock (in shares) \| shares		8,477,777
Share price (in dollars per share) \| $ / shares		$ 18.00
Proceeds form IPO \| $		$ 152,600
Over-allotment \| Class A common shares
Nature of the Business and Basis of Presentation
Issuance of stock (in shares) \| shares	1,006,425
Share price (in dollars per share) \| $ / shares	$ 18.00
Proceeds form IPO \| $	$ 18,116

Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) - item	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash and cash equivalents \| Credit concentration
Concentration risk
Number of financial institutions holding cash, cash equivalents and short-term investments	2	2	2

Summary of Significant Accounting Policies - Restricted Cash and Net Loss Per Share (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares
Restricted cash
Cash securing letter of credit \| $	$ 210
Net Loss Per Share
Increase in loss per share as a result of the recalculation of weighted average shares \| $ / shares	$ 0.09

Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Assets
Short-term investments		$ 0
Fair Value, Assets Transfers
Fair value of assets transferred from Level 1 to Level 2	$ 0	0	$ 0
Fair value of assets transferred from Level 2 to Level 1	0	0	0
Fair value of assets transferred from Level 1 to Level 3	0	0	0
Fair value of assets transferred from Level 2 to Level 3	0	0	0
Fair value of assets transferred from Level 3 to Level 1	0	0	0
Fair value of assets transferred from Level 3 to Level 2	0	0	0
U.S. Treasury Notes
Assets
Amortized cost of short-term investments	268,255
Unrealized loss on short-term investments	55
Fair Value \| Recurring basis
Assets
Assets	289,045	20,587	53,159
Fair Value \| Recurring basis \| Money Market Funds
Assets
Restricted cash	210	105	105
Cash equivalents	5,299	5,487	550
Fair Value \| Recurring basis \| U.S. Treasury Notes
Assets
Cash equivalents	15,336	14,995	52,504
Short-term investments	268,200
Fair Value \| Recurring basis \| Level 1
Assets
Assets	5,509	5,592	655
Fair Value \| Recurring basis \| Level 1 \| Money Market Funds
Assets
Restricted cash	210	105	105
Cash equivalents		5,487	550
Fair Value \| Recurring basis \| Level 1 \| U.S. Treasury Notes
Assets
Cash equivalents	5,299	5,487
Fair Value \| Recurring basis \| Level 2
Assets
Assets	283,536	14,995	52,504
Fair Value \| Recurring basis \| Level 2 \| U.S. Treasury Notes
Assets
Cash equivalents	15,336	$ 14,995	$ 52,504
Short-term investments	$ 268,200

Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment, Net
Property and equipment, Gross	$ 2,426		$ 2,426		$ 177	$ 108
Less: Accumulated depreciation	(66)		(66)		(52)	(24)
Property and equipment, Total	2,360		2,360		125	84
Depreciation expense	12	$ 8	32	$ 20	28	22
Furniture and fixtures
Property and Equipment, Net
Property and equipment, Gross	6		6		83	14
Computer hardware and software
Property and Equipment, Net
Property and equipment, Gross	94		94		9	9
Vehicles
Property and Equipment, Net
Property and equipment, Gross	85		85		$ 85	$ 85
Construction in progress
Property and Equipment, Net
Property and equipment, Gross	$ 2,241		$ 2,241

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Accrued Expenses
Accrued employee compensation and benefits	$ 3,160	$ 1,570	$ 986
Accrued research and development expenses	9,313	3,905	979
Accrued legal and professional fees	548	688	122
Other	332	49	3
Accrued expenses	$ 13,353	$ 6,212	$ 2,090

Convertible Preferred Shares (Details) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended	9 Months Ended	12 Months Ended
	Feb. 28, 2018 USD ($) $ / shares shares	Mar. 31, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares	Oct. 31, 2015 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) $ / shares	Sep. 30, 2018 USD ($) director Vote $ / shares shares	Dec. 31, 2017 USD ($) director Vote $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Jun. 22, 2018 shares	May 31, 2018 shares
Convertible Preferred Shares
Preferred shares designated						0	22,885,492
Preferred stock, shares issued (in shares)						0	22,885,492
Payment of offering expenses \| $						$ 3,646
Number of shares issued on conversion of convertible preferred shares							22,885,492
Cash dividend declared \| $					$ 0		$ 0	$ 0
Convertible Preferred Shares (Series A, B and C)
Convertible Preferred Shares
Preferred shares designated	35,670,093					0	22,885,492	17,128,120
Preferred stock, shares issued (in shares)						0	22,885,492	17,128,120
Convertible preferred shares, par value (in dollars per share) \| $ / shares	$ 0.000273235					$ 0.000273235	$ 0.000273235	$ 0.000273235
Number of directors entitled to elect \| director						2	2
Series A convertible preferred shares
Convertible Preferred Shares
Preferred shares designated							17,128,120	17,128,120
Preferred stock, shares issued (in shares)			9,099,311	8,028,809			17,128,120	17,128,120
Share price per share \| $ / shares			$ 4.6707	$ 4.6707
Proceeds from issuance of shares \| $			$ 42,499	$ 37,398
Payment of offering expenses \| $			$ 1	$ 102
Number of shares issued on conversion of convertible preferred shares							17,128,120	17,128,120
Number of votes for each Class B common share \| Vote						10	10
Original issue price (per share) \| $ / shares					$ 4.6707		$ 4.6707	$ 4.6707
Series B convertible preferred shares
Convertible Preferred Shares
Preferred shares designated							5,757,372
Preferred stock, shares issued (in shares)		5,757,372					5,757,372
Share price per share \| $ / shares		$ 6.9475
Proceeds from issuance of shares \| $		$ 39,873
Payment of offering expenses \| $		$ 127
Number of shares issued on conversion of convertible preferred shares							5,757,372
Number of votes for each Class A common share \| Vote						1	1
Original issue price (per share) \| $ / shares					6.9475		$ 6.9475	6.9475
Series C convertible preferred shares
Convertible Preferred Shares
Preferred shares designated	12,784,601
Preferred stock, shares issued (in shares)	12,784,601
Share price per share \| $ / shares	$ 15.6438
Proceeds from issuance of shares \| $	$ 190,822
Payment of offering expenses \| $	$ 9,178
Original issue price (per share) \| $ / shares					$ 15.6438		$ 15.6438	$ 15.6438
Class A common shares
Convertible Preferred Shares
Number of shares issued on conversion of convertible preferred shares						5,546,019			5,546,019	5,546,019
Gross proceeds from offering \| $						$ 159,193
Class B common shares
Convertible Preferred Shares
Number of shares issued on conversion of convertible preferred shares						1,070,502			1,070,502	1,070,502
Class A1 common shares
Convertible Preferred Shares
Number of shares issued on conversion of convertible preferred shares						12,995,954				12,995,954
Class B1 common shares
Convertible Preferred Shares
Number of shares issued on conversion of convertible preferred shares						16,057,618				16,057,618
Common Class A and Class B
Convertible Preferred Shares
Number of directors entitled to elect \| director						1	1
Common Class A or Class B \| Minimum
Convertible Preferred Shares
Share price per share \| $ / shares							$ 14.0120
Gross proceeds from offering \| $						$ 100,000	$ 100,000

Common Shares (Details) $ / shares in Units, $ in Thousands			9 Months Ended	12 Months Ended
Common Shares (Details) $ / shares in Units, $ in Thousands	Jun. 22, 2018 USD ($) $ / shares shares	May 29, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) director Vote $ / shares shares	Dec. 31, 2017 USD ($) director Vote $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	May 31, 2018 $ / shares shares	Feb. 28, 2018 shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)				43,918,239	43,918,239	200,000,000	44,746,463
Common stock, par value (in dollars per share) \| $ / shares				$ 0.000273235	$ 0.000273235	$ 0.000273235
Common shares or Preferred Shares not designated				11,956,456	18,729,845
Proceeds form IPO \| $			$ 155,536
Number of shares issued on conversion of convertible preferred shares				22,885,492
Authorized capital						54,647,000
Preferred shares designated			0	22,885,492
Preferred stock, shares issued (in shares)			0	22,885,492
Common stock, cash dividends declared \| $			$ 0	$ 0	$ 0
Common stock, cash dividends paid \| $			0	0	0
Preferred stock, cash dividends declared \| $			0	0	0
Preferred stock, cash dividends paid \| $			$ 0	$ 0	$ 0
Class A common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)				5,507,938	4,491,921		5,507,938
Common stock, par value (in dollars per share) \| $ / shares			$ 0.000273235	$ 0.000273235	$ 0.000273235
Number of shares issued on conversion of convertible preferred shares	5,546,019		5,546,019			5,546,019
Number of votes (per share) \| Vote			1	1
Class B common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)				3,568,353	3,568,353		3,568,353
Common stock, par value (in dollars per share) \| $ / shares			$ 0.000273235	$ 0.000273235	$ 0.000273235
Number of shares issued on conversion of convertible preferred shares	1,070,502		1,070,502			1,070,502
Number of votes (per share) \| Vote			10	10
Convertible ratio to Class A common share			1	1
Convertible ratio to Class B1 common share			1	1
Class A1 common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)				0	0
Number of shares issued on conversion of convertible preferred shares			12,995,954			12,995,954
Number of votes (per share) \| Vote			0	0
Convertible ratio to Class A common share			1	1
Class B1 common shares
Nature of the Business and Basis of Presentation
Common share authorized (in shares)				0	0
Number of shares issued on conversion of convertible preferred shares			16,057,618			16,057,618
Number of votes (per share) \| Vote			0	0
Convertible ratio to Class A common share			1	1
Convertible ratio to Class B common share			1	1
Common Class A and Class B
Nature of the Business and Basis of Presentation
Number of directors entitled to elect \| director			1	1
Convertible Preferred Shares (Series A, B and C)
Nature of the Business and Basis of Presentation
Preferred shares designated			0	22,885,492	17,128,120		35,670,093
Preferred stock, shares issued (in shares)			0	22,885,492	17,128,120
Number of directors entitled to elect \| director			2	2
Initial Public Offering \| Class A common shares
Nature of the Business and Basis of Presentation
Issuance of stock (in shares)		8,477,777
Share price (in dollars per share) \| $ / shares		$ 18.00
Proceeds form IPO \| $		$ 152,600
Over-allotment \| Class A common shares
Nature of the Business and Basis of Presentation
Issuance of stock (in shares)	1,006,425
Share price (in dollars per share) \| $ / shares	$ 18.00
Proceeds form IPO \| $	$ 18,116

Share Based Compensation (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
Share Based Compensation (Details) - USD ($) $ in Thousands	May 23, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016	May 31, 2018
Share-based compensation
Maximum number of common shares may be issued								54,647,000
Share-based compensation expense		$ 1,502	$ 322	$ 3,119	$ 550	$ 897	$ 368
2015 Equity Incentive Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue	4,691,213
Number of shares no longer available for future grant	92,170
Authorized shares outstanding (in shares)		4,620,850		4,620,850
2015 Equity Incentive Plan \| Class A common shares \| Employees and directors
Share-based compensation
Number of options granted				2,887,639	1,434,156	1,545,045	316,866
2015 Equity Incentive Plan \| Class A common shares \| Non-employees
Share-based compensation
Number of options granted				4,000	1,829	1,829	12,807
Stock options \| 2018 Incentive Award Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue								4,466,500
Share based payment award percentage of outstanding	4.00%
Number of common shares available for future grant		3,280,059		3,280,059
Stock options \| 2018 Incentive Award Plan \| Class A common shares \| Maximum
Share-based compensation
Maximum number of common shares may be issued	27,915,000
Stock options \| 2015 Equity Incentive Plan
Share-based compensation
Authorized shares outstanding (in shares)		5,860,168		5,860,168		3,123,064	1,583,691
Vesting percentage of options having four year vesting term on the first anniversary of the grant date		25.00%		25.00%		25.00%
Vesting percentage of options having six year vesting term on the first anniversary of the grant date		16.00%		16.00%		16.00%
Number of options granted				2,891,639		1,546,874
Stock options \| 2015 Equity Incentive Plan \| Employees and directors
Share-based compensation
Share-based compensation expense		$ 1,414	321	$ 2,980	$ 540	$ 876	$ 354
Stock options \| 2015 Equity Incentive Plan \| Minimum
Share-based compensation
Vesting period				4 years		4 years
Stock options \| 2015 Equity Incentive Plan \| Maximum
Share-based compensation
Option term of incentive awards				10 years		10 years
Option term of awards for the persons possessing more than 10% of voting power				5 years		5 years
Vesting period				6 years		6 years
Stock options \| 2015 Equity Incentive Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue		0		0		4,794,266	3,778,249
Number of common shares available for future grant		0		0		1,644,893	2,188,249
Minimum percentage of exercise price of the fair market value of shares for the persons possessing 10% or less of voting power		100.00%		100.00%		100.00%
Minimum percentage of exercise price of the fair market value of shares for the persons possessing more than 10% of voting power		110.00%		110.00%		110.00%
Stock options \| 2015 Equity Incentive Plan \| Class A common shares \| Non-employees
Share-based compensation
Share-based compensation expense		$ 35	$ 1	$ 87	$ 10	$ 21	$ 14
Stock options \| 2018 Employee Share Purchase Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue								670,000
Share based payment award percentage of outstanding	1.00%
Stock options \| 2018 Employee Share Purchase Plan \| Class A common shares \| Maximum
Share-based compensation
Maximum number of common shares may be issued	6,420,000

Share Based Compensation - Option valuation (Details) - Stock options	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Employees and directors
Assumptions to determine fair value of options granted on weighted average basis:
Risk-free interest rate	2.93%	1.90%	2.80%	1.97%	1.99%	1.45%
Expected term (in years)	6 years 3 months	6 years	6 years 4 months 28 days	6 years	6 years 3 months	6 years 3 months
Expected volatility	74.37%	73.88%	74.90%	74.23%	74.18%	70.75%
Non-employees
Assumptions to determine fair value of options granted on weighted average basis:
Risk-free interest rate	2.94%	1.97%	2.90%	1.97%	2.49%	1.94%
Expected term (in years)	7 years 15 days	8 years 10 months 2 days	7 years 5 months 16 days	8 years 10 months 2 days	10 years	10 years
Expected volatility	74.49%	77.93%	74.07%	77.93%	78.28%	65.85%

Share Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Aggregate Intrinsic Value
Proceeds from exercise of options	$ 76			$ 10
Stock options \| 2015 Equity Incentive Plan
Number of Shares
Outstanding, Beginning of the period	3,123,064	1,583,691	1,583,691
Granted	2,891,639		1,546,874
Exercised	(22,060)
Forfeited	(132,475)		(7,501)
Outstanding, End of the period	5,860,168		3,123,064	1,583,691
Options exercisable	1,575,324		843,454
Options unvested	4,284,844		2,279,610
Weighted Average Exercise Price
Outstanding, Beginning of the period	$ 2.75	$ 1.64	$ 1.64
Granted	17.11		3.90
Exercised	3.46
Forfeited	5.16		3.75
Outstanding, End of the period	9.78		2.75	$ 1.64
Options exercisable	2.44		1.62
Options unvested	$ 12.48		$ 3.17
Weighted Average Remaining Contractual Term (in years)
Outstanding	8 years 9 months 22 days		8 years 9 months 26 days	9 years 1 month 6 days
Exercisable	7 years 8 months 19 days		8 years 26 days
Unvested	9 years 2 months 19 days		9 years 1 month 2 days
Aggregate Intrinsic Value
Outstanding	$ 96,055		$ 6,010	$ 356
Exercisable	36,330		2,580
Unvested	$ 59,725		$ 3,431
weighted-average grant-date fair value per share of options granted	$ 11.69	$ 2.53	$ 2.57	$ 1.16
Total fair value of options vested	$ 1,676	$ 351	$ 445	$ 402
Class A common shares \| 2015 Equity Incentive Plan
Number of Shares
Exercised	(22,060)		0	(6,309)
Outstanding, End of the period	4,620,850
Aggregate Intrinsic Value
Intrinsic value of options exercised	$ 254			$ 2
Proceeds from exercise of options	$ 76			$ 10

Share Based Compensation - Restricted Shares (Details) - Unvested restricted shares - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Share-based compensation
Vesting period	4 years		4 years
Weighted Average Fair Value at Issuance
Aggregate fair value of vested restricted shares	$ 10,477	$ 2,764	$ 3,973	$ 2,348
Class A common shares
Number of shares
Unvested restricted shares outstanding, Beginning of the period	312,229	490,646	490,646
Unvested restricted shares vested	(133,812)		(178,417)
Unvested restricted shares outstanding, End of the period	178,417		312,229	490,646
Weighted Average Fair Value at Issuance
Unvested restricted shares outstanding, Beginning of the period	$ 0.000273235	$ 0.000273235	$ 0.000273235
Unvested restricted shares vested	0.000273235		0.000273235
Unvested restricted shares outstanding, End of the period	$ 0.000273235		$ 0.000273235	$ 0.000273235
Class B common shares
Number of shares
Unvested restricted shares outstanding, Beginning of the period	1,635,495	2,527,583	2,527,583
Unvested restricted shares vested	(669,066)		(892,088)
Unvested restricted shares outstanding, End of the period	966,429		1,635,495	2,527,583
Weighted Average Fair Value at Issuance
Unvested restricted shares outstanding, Beginning of the period	$ 0.000273235	$ 0.000273235	$ 0.000273235
Unvested restricted shares vested	0.000273235		0.000273235
Unvested restricted shares outstanding, End of the period	$ 0.000273235		$ 0.000273235	$ 0.000273235

Share Based Compensation - Classification of expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Share-based compensation
Share-based compensation expense	$ 1,502	$ 322	$ 3,119	$ 550	$ 897	$ 368
Total unrecognized compensation cost	34,676		$ 34,676		$ 4,280
Expenses expected to be recognized over a weighted average remaining period			3 years 6 months 15 days		3 years 2 months 19 days
Research and development expenses
Share-based compensation
Share-based compensation expense	576	121	$ 1,141	181	$ 324	59
General and administrative expenses
Share-based compensation
Share-based compensation expense	$ 926	$ 201	$ 1,978	$ 369	$ 573	$ 309

License and Acquisition Agreements - Biogen Asset Purchase Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Research and development		$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
Biogen Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 11,500
Technology transfer payment	500
Milestone payment upon achievement of clinical milestone event						4,000
One-time payment of upfront sublicense fee on retained contracts	150
Maximum aggregate obligation to pay insignificant annual maintenance fees as well as clinical and regulatory milestone payments	$ 1,575
Notice period to terminate the agreement	90 days
Uncured period causes termination of the agreement, due to insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured	90 days
Notice period to terminate the agreement under payment-related breaches	30 days
Research and development		$ 11	$ 11	$ 41	$ 4,158	$ 4,169	$ 12,100
Maximum \| Biogen Agreement
License and Acquisition Agreements
Milestone payment to be paid upon clinical and regulatory milestone achievement	$ 179,000
Milestone payment to be paid upon net sales milestone achievement	$ 150,000

License and Acquisition Agreements - Novo Nordisk License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Research and development		$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
Novo Nordisk Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 1,500
Consideration payable upon completion of the technology transfer	150
Milestone payment payable after achievement of specified milestones	$ 1,000
Milestone payments due				0	0	0
Research and development expense, Milestone		$ 4		$ 154
Research and development			$ 1,500		$ 1,500	$ 1,500

License and Acquisition Agreements - Primatope Stock Purchase Option Agreement (Details) $ in Thousands	1 Months Ended		3 Months Ended		7 Months Ended	9 Months Ended		12 Months Ended
	Apr. 30, 2018 USD ($)	Sep. 30, 2017 USD ($) item	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Oct. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
License and Acquisition Agreements
Research and development			$ 20,644	$ 14,008		$ 50,475	$ 26,426	$ 56,357	$ 17,439
Primatope Agreement
License and Acquisition Agreements
Percentage of capital stock available to purchase in call option		100.00%
Upfront payment for initial option period		$ 500
Payment for extension of option period	$ 250				$ 600
Upfront consideration payable on exercise of call option to acquire all outstanding equity		$ 10,000		10,000			10,000
Research and development			$ 250	500		$ 500	500	$ 500
Maximum \| Primatope Agreement
License and Acquisition Agreements
Number of extensions allowed for initial option period \| item		3
Total aggregate extension payments		$ 800
Milestone payments payable on exercise of call option to acquire all outstanding equity		$ 10,000		$ 10,000			$ 10,000

License and Acquisition Agreements - Regeneron License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Research and development		$ 20,644	$ 14,008	$ 50,475	$ 26,426	$ 56,357	$ 17,439
Regeneron Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 5,000
Uncured period causes termination of the agreement, due to insolvency or bankruptcy or for material breach of the agreement by the other party that remains uncured	90 days
Research and development expense related to purchase of drug materials		257	0	1,835	0	208
Research and development expense, Milestone		$ 0		$ 0
Notice period to terminate the agreement under payment-related breaches	30 days
Consecutive suspension of activities period for termination of agreement	12 months
Notice period to terminate the agreement	180 days
Notice period to terminate the agreement after US marketing approval of the developed product	1 year
Notice period to terminate the agreement if products are having safety concerns	3 months
Research and development			5,000		5,000	$ 5,208
Maximum \| Regeneron Agreement
License and Acquisition Agreements
Milestone payment to be paid upon regulatory milestone achievement	$ 27,500		$ 27,500		$ 27,500

License and Acquisition Agreements - MedImmune License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
License and Acquisition Agreements
Accrued milestone payments	$ 10,000	$ 10,000		$ 10,000		$ 10,000
Research and development		20,644	$ 14,008	50,475	$ 26,426	56,357	$ 17,439
MedImmune Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	8,000
Milestone payment to be paid upon regulatory milestone achievement	10,000					10,000
Accrued milestone payments	10,000	10,000		10,000		10,000
Pass-through payment to be paid upon clinical milestone achievement	5,000
Annual net sales excluding from calculation of specified annual net sales thresholds	$ 1,000,000
Maximum percentage of royalty payable on annual net sales of licensed products	20.00%
Notice period to terminate the agreement by both parties for material breaches	90 days
Notice period to terminate the agreement	90 days
Research and development						18,000
Research and development expense, Milestone		$ 0	$ 0	$ 0	$ 0
Minimum \| MedImmune Agreement
License and Acquisition Agreements
Additional specified annual net sales threshold for additional milestone payment.	$ 1,000,000
Maximum \| MedImmune Agreement
License and Acquisition Agreements
Milestone payment to be paid upon specified milestone achievements for first two indications	72,500					72,500
Milestone payment to be paid upon clinical and regulatory milestone achievement	15,000					15,000
Milestone payment to be paid upon specified annual sales milestone achievements	85,000					85,000
Additional milestone payments payable after achievement of additional annual sales	$ 1,100,000					$ 1,100,000

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net loss attributable to common shareholders	$ (24,406)	$ (16,029)	$ (60,647)	$ (32,172)	$ (64,873)	$ (23,973)
Denominator:
Weighted average common shares outstanding — basic and diluted	48,183,424	1,942,106	23,174,841	1,675,133	1,809,751	261,695
Net loss per share attributable to common shareholders — basic and diluted	$ (0.51)	$ (8.25)	$ (2.62)	$ (19.21)	$ (35.85)	$ (91.61)

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