0001558370-21-006256 | 10-Q | XBRL Viewer | Kiniksa Pharmaceuticals LTD

Net Loss per Share - Anti-Dilutive Securities (Details) - shares	3 Months Ended
Mar. 31, 2021	Mar. 31, 2020
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share	10,939,018	9,292,915
Stock options
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share	10,355,433	8,990,872
Restricted Share Units (RSUs)
Anti-dilutive securities excluded from computation of earnings per share
Total, anti-dilutive securities excluded from computation of earnings per share	583,585	302,043

License, Acquisition and Collaboration Agreements - Beth Israel Deaconess Medical Center License Agreement (Details) - USD ($) $ in Thousands	3 Months Ended
Mar. 31, 2021	Mar. 31, 2020
License and Acquisition Agreements
Research and development	$ 28,683	$ 20,901
License Agreement \| BIDMC
License and Acquisition Agreements
Research and development	0	$ 0
License Agreement \| BIDMC \| Maximum
License and Acquisition Agreements
Milestone payment to be paid upon clinical and regulatory milestone achievement	$ 1,200

Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value of Financial Assets and Liabilities

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


	Fair Value Measurements
	as of March 31, 2021 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		33,833		—		—		33,833
Cash equivalents — U.S. Treasury notes		—		65,099		—		65,099
Short-term investments — U.S. Treasury notes		—		144,169		—		144,169
	$	34,043	$	209,268	$	—	$	243,311


	Fair Value Measurements
	as of December 31, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		22,942		—		—		22,942
Cash equivalents — U.S. Treasury notes		—		72,695		—		72,695
Short-term investments — U.S. Treasury notes		—		209,444		—		209,444
	$	23,152	$	282,139	$	—	$	305,291

Schedule of short-term investments

Short-term investments as of March 31, 2021 and December 31, 2020 consisted of U.S. Treasury notes which investments were each due within six months of such date.
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
March 31, 2021
Cash equivalents — U.S. Treasury notes	$	65,099	$	—	$	—	$	65,099
Short-term investments — U.S. Treasury notes		144,160		9		—		144,169
	$	209,259	$	9	$	—	$	209,268


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
December 31, 2020
Cash equivalents — U.S. Treasury notes	$	72,694	$	1	$	—	$	72,695
Short-term investments — U.S. Treasury notes		209,459		4		(19)		209,444
	$	282,153	$	5	$	(19)	$	282,139

Share Based Compensation (Details)			1 Months Ended
Share Based Compensation (Details)	Jan. 01, 2021 shares	May 23, 2018 shares	Dec. 31, 2019 item	Mar. 31, 2021 shares
2018 Incentive Award Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue		4,466,500
Percentage of automatic increase in shares available for issue		4.00%
Additional shares authorized	2,728,600
Number of common shares available for future grant				3,457,214
2018 Incentive Award Plan \| Class A common shares \| Maximum
Share-based compensation
Percentage of automatic increase in shares available for issue	4.00%
Maximum number of common shares may be issued		27,915,000
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs)
Share-based compensation
Number of grants of RSU awards that a participant may receive \| item			2
Number of awards that will be earned or vest if the milestone date does not occur by the specified date \| item			0
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Earnout Level 1
Share-based compensation
Potential performance earnout percentage			100.00%
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Earnout Level 2
Share-based compensation
Potential performance earnout percentage			50.00%
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Earnout Level 3
Share-based compensation
Potential performance earnout percentage			25.00%
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Earnout Level 4
Share-based compensation
Potential performance earnout percentage			0.00%
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Upside Earnout Level 1
Share-based compensation
Potential performance earnout percentage			50.00%
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Upside Earnout Level 2
Share-based compensation
Potential performance earnout percentage			25.00%
Rilonacept Long-term Incentive Plan \| Restricted Share Units (RSUs) \| Upside Earnout Level 3
Share-based compensation
Potential performance earnout percentage			0.00%
2015 Equity Incentive Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue		4,691,213		2,758,352
Number of shares no longer available for future grant		92,170
2018 Employee Share Purchase Plan \| Class A common shares
Share-based compensation
Total number of common shares authorized to issue		670,000
Number of common shares available for future grant				648,794
2018 Employee Share Purchase Plan \| Class A common shares \| Maximum
Share-based compensation
Percentage of automatic increase in shares available for issue		1.00%
Additional shares authorized	130,000
Maximum number of common shares may be issued		6,420,000

Share-Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Weighted Average Grant Date Fair Value
Proceeds from exercise of options	$ 1,106	$ 2,414
Class A common shares \| Stock options
Number of Shares
Outstanding, beginning of the period	9,958,858
Granted	1,037,668
Exercised	(115,012)
Forfeited	(526,081)
Outstanding, end of the period	10,355,433
Options exercisable	4,355,393
Options unvested	6,000,040
Weighted Average Grant Date Fair Value
Outstanding, beginning of the period	$ 9.32
Granted	15.14
Exercised	6.62
Forfeited	9.66
Outstanding, end of the period	9.92
Options exercisable	8.74
Options unvested	$ 11.43

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 119,856	$ 114,038
Short-term investments	144,169	209,444
Restricted cash	210	210
Inventory	2,189	0
Prepaid expenses and other current assets	9,140	9,557
Total current assets	275,564	333,249
Property and equipment, net	3,815	4,051
Operating lease right-of-use assets	5,982	6,566
Other long-term assets	5,797	5,588
Intangible asset	20,000	0
Deferred tax assets		10
Total assets	311,158	349,464
Current liabilities:
Accounts payable	2,763	503
Accrued expenses	30,316	29,199
Operating lease liabilities	2,374	2,107
Other current liabilities		37
Total current liabilities	35,453	31,846
Non-current liabilities:
Non-current operating lease liabilities	4,200	4,878
Other long-term liabilities	809	805
Total liabilities	40,462	37,529
Commitments and contingencies (Note 13)
Shareholders' equity:
Additional paid-in capital	837,656	829,424
Accumulated other comprehensive income	(21)	(34)
Accumulated deficit	(566,957)	(517,473)
Total shareholders' equity	270,696	311,935
Total liabilities and shareholders' equity	311,158	349,464
Class A common shares
Shareholders' equity:
Common stock value	8	8
Class B common shares
Shareholders' equity:
Common stock value	1	1
Class A1 common shares
Shareholders' equity:
Common stock value	5	5
Class B1 common shares
Shareholders' equity:
Common stock value	$ 4	$ 4

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

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 subsidiaries, Kiniksa Pharmaceuticals Corp. (“Kiniksa US”), Primatope Therapeutics, Inc. (“Primatope”) and Kiniksa Pharmaceuticals (UK), Ltd. (“Kiniksa UK”) as well as the subsidiaries of Kiniksa UK, Kiniksa Pharmaceuticals (Germany) GmbH (“Kiniksa Germany”), Kiniksa Pharmaceuticals (France) SARL (“Kiniksa France”), and Kiniksa Pharmaceuticals GmbH (“Kiniksa Switzerland”), after elimination of all significant intercompany accounts and transactions.

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 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.

Reporting and Functional Currency

The financial results of the Company's global activities are reported in U.S. dollars (“USD”) and its foreign subsidiaries either utilize USD or their respective local currency to be their functional currency.

Transactions in other currencies are recorded in the functional currency at the rate of exchange prevailing when the transactions occur. Monetary assets and liabilities denominated in other currencies are re-measured into the functional currency at the rate of exchange in effect at the balance sheet date. Exchange rate gains and losses arising from re-measurement of foreign currency-denominated monetary assets and liabilities are included in income or losses in the period in which they occur.

For the Company’s foreign subsidiaries where the local currency is the functional currency, assets and liabilities denominated in local currencies are translated into USD at end-of-period exchange rates and the resulting translation adjustments are reported as a component of accumulated other comprehensive gain (loss) within shareholders' equity (deficit).

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 March 31, 2021 and the results of its operations for the three months ended March 31, 2021 and 2020 and its cash flows for the three months ended March 31, 2021 and 2020. The results for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, 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 March 31, 2021 and December 31, 2020, 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

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

If the estimated fair value of a debt security is below its carrying value, the Company evaluates whether it is more likely than not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. The Company also evaluates whether or not it intends to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other income, net.

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 March 31, 2021 and December 31, 2020, substantially 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

In conjunction with the Company’s lease agreement entered into in March 2018, the Company maintains a letter of credit for the benefit of the landlord. As of March 31, 2021 and December 31, 2020 the underlying cash balance of $210 securing this letter of credit, was classified as 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 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.

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a “lease” as defined by ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). A lease is an arrangement, or part of an arrangement, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. The Company determines if the arrangement conveys the right to control the use of an identified asset for a period of time. It assesses throughout the period of use whether the Company has both of the following (1) the right to obtain substantially all of the economic benefits from use of the identified asset and (2) the right to direct the use of the identified asset. This determination is reassessed if the terms of the arrangement are changed. Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified asset. Right-of-use (“ROU”) assets and lease liabilities are recognized at lease commencement date based on the present value of the minimum future lease payments.

Most leases with a term greater than one year are recognized on the balance sheet as ROU assets with corresponding lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize leases with a term of one year or less on its balance sheet. Operating leases, ROU assets and their corresponding lease liabilities are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the ROU assets may be required for items such as incentives received. The interest rate implicit in lease arrangements is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.); then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components.

The Company has elected to account for the lease and non-lease components of each of its operating leases as a single lease component and allocate all of the arrangement consideration to the lease component only. The lease component results in an operating ROU asset being recorded on the balance sheet and amortized on a straight-line basis as lease expense.

Inventory

Inventories are stated at the lower of cost or estimated net realizable value with cost based on the first-in first-out method. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified and labeled for use in clinical trials as the products are required to be re-labeled for alternative uses. Prior to the regulatory approval of its drug candidates, the Company incurs expenses for the manufacture of product candidate supplies to support clinical development that could potentially be available to support the commercial launch of those therapeutics. Until the date at which regulatory approval has been received or is otherwise considered probable, the Company records all such costs as research and development expenses. The Company performs an assessment of the recoverability of capitalized inventories during each reporting period and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of sales in the Company's consolidated statements of operations and comprehensive loss. The determination of whether inventory costs will be realizable requires the use of estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required.

Intangible Assets

Upon FDA approval and commercial launch of ARCALYST in March 2021, the Company capitalized the $20,000 milestone payment to Regeneron for a specified regulatory milestone as a finite-lived intangible asset. The intangible asset will be amortized on a straight-line basis over the life of the underlying intellectual property of 20 years. Amortization expense will be recorded as cost of goods sold in the Company’s consolidated statement of operations and comprehensive loss.

Impairment of LongLived Assets

Impairment of long-lived assets

The Company assesses the impairment of long-lived assets, including intangible assets and property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, the Company determines whether there has been an impairment in value by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an impairment in value exists, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through March 31, 2021 and there have been no events that triggered an impairment analysis.

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 preclinical and clinical development activities and clinical trials as well as to manufacture

clinical trial materials. Non-refundable prepayments determined to be used within one year for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Non-refundable prepayments or minimum balance requirements associated to clinical trials determined to not be used within one year are classified as other long term assets. 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. Milestone and other payments made to third parties with respect to in-process research and development, in accordance with the Company’s license, acquisition and other similar agreements are expensed when determined to be probable and estimable.

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 and development costs. When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of outstanding obligations to those third parties as of the end of the reporting period. Any accrual estimates are based on a number of factors, including the Company’s knowledge of the progress towards completion of the research and development activities, invoicing to date under the contracts, communication from the research institution or other companies of any actual costs incurred during the period that have not yet been invoiced, and the costs included in the contracts. 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 grant. The Company issues share-based awards with both service-based vesting conditions and performance-based vesting conditions. The Company recognizes compensation expense for awards with service conditions on a straight-line basis over the requisite service period. For awards with performance conditions, the Company recognizes compensation expense when the achievement of the performance milestone is probable and estimable through the vest date.

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.

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 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 9). 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 a blend of the historical volatility of the Company’s and publicly traded peer companies share price 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.

The fair value of each restricted share unit award is based on the closing price of the Company’s Class A common shares on the date of grant. Restricted share unit awards with an associated performance condition are evaluated on a regular basis for probability of achievement to determine the timing of recording share-based compensation expense in the Company’s consolidated statements of operations and comprehensive loss.

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders. For the three months ended March 31, 2021 and 2020, the Company’s other comprehensive loss was comprised of unrealized gain (loss) on short-term investments as well as cumulative translation adjustments, net of tax.

Net Loss per Share

The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common shares 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 loss per share attributable to common shareholders is computed by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss attributable to common shareholders is computed by adjusting net loss attributable to common shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share attributable to common shareholders is computed by dividing the diluted net 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 and unvested restricted common shares are considered potential dilutive common shares.

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 months ended March 31, 2021 and 2020.

Income Taxes

As an exempted company incorporated under the laws of 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 losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards will be available to the Company for those losses. The Company’s wholly owned U.S. subsidiaries, Kiniksa US and Primatope, are subject to federal and state income taxes in the United States. The Company’s wholly owned subsidiary Kiniksa UK, and its wholly owned subsidiaries, Kiniksa Germany, Kiniksa France, and Kiniksa Switzerland, are subject to taxation in their respective countries. Certain of the Company’s subsidiaries, primarily Kiniksa US and Kiniksa Germany, operate under cost-plus arrangements.

The Company’s U.S. provision for income taxes relates to current tax expense associated with the taxable income in the United States of its wholly owned subsidiary, Kiniksa US. The current income tax expense is a result of

the taxable income earned by Kiniksa US under its cost-plus arrangement offset in part by tax benefits from the U.S. federal and state research and development credits, the Foreign Derived Intangible Income (“FDII”) deduction and share-based compensation taxable events. The Company has recorded an immaterial foreign provision for income taxes related to income in non-U.S. subsidiaries.

The Company provides for income taxes on an interim basis according to management's estimate of the effective tax rate expected to be applicable for the full fiscal year. Subsidiaries with losses for which no benefit can be claimed are excluded from this calculation, and their tax is recorded discretely in the period it arises. Certain other items such as changes in tax rates, tax benefits or expense related to settlements of share-based payment awards, changes in the valuation allowance against deferred tax, and uncertain tax positions are treated as discrete items and are recorded in the period in which they arise.

Recently Adopted and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740)(“ASU 2019-12”). The objective of the standard is to improve areas of GAAP by removing certain exceptions permitted by ASC Topic 740 Income Taxes and clarifying existing guidance to facilitate consistent application. The Company adopted the standard on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Shares	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Balance at the beginning of the period at Dec. 31, 2019	$ 15	$ 581,467	$ 33	$ (356,092)	$ 225,423
Balance at the beginning of the period (in shares) at Dec. 31, 2019	54,937,628
Changes in equity
Issuance of Class A common shares under incentive award plans		2,414			2,414
Issuance of Class A common shares under incentive award plans (in shares)	643,867
Share-based compensation expense		4,209			4,209
Unrealized gain on short-term investments and currency translation adjustments, net of tax			207		207
Net loss				(26,419)	(26,419)
Balance at the end of the period at Mar. 31, 2020	$ 15	588,090	240	(382,511)	205,834
Balance at the end of the period (in shares) at Mar. 31, 2020	55,581,495
Balance at the beginning of the period at Dec. 31, 2020	$ 18	829,424	(34)	(517,473)	311,935
Balance at the beginning of the period (in shares) at Dec. 31, 2020	68,215,022
Changes in equity
Issuance of Class A common shares under incentive award plans		1,106			1,106
Issuance of Class A common shares under incentive award plans (in shares)	115,012
Share-based compensation expense		7,126			7,126
Unrealized gain on short-term investments and currency translation adjustments, net of tax			13		13
Net loss				(49,484)	(49,484)
Balance at the end of the period at Mar. 31, 2021	$ 18	$ 837,656	$ (21)	$ (566,957)	$ 270,696
Balance at the end of the period (in shares) at Mar. 31, 2021	68,330,034

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	Apr. 30, 2021
Document information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
Entity File Number	001-38492
Entity Registrant Name	Kiniksa Pharmaceuticals, Ltd.
Entity Incorporation, State or Country Code	D0
Entity Tax Identification Number	98-1327726
Entity Address, Address Line One	Clarendon House
Entity Address, Address Line Two	2 Church Street
Entity Address, City or Town	Hamilton
Entity Address, Country	BM
Entity Address, Postal Zip Code	HM11
City Area Code	808
Local Phone Number	451-3453
Title of 12(b) Security	Class A Common Shares
Trading Symbol	KNSA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001730430
Amendment Flag	false
Common Shares
Document information
Entity Common Stock, Shares Outstanding		68,332,034
Class A common shares
Document information
Entity Common Stock, Shares Outstanding		32,322,276
Class B common shares
Document information
Entity Common Stock, Shares Outstanding		1,927,614
Class A1 common shares
Document information
Entity Common Stock, Shares Outstanding		18,024,526
Class B1 common shares
Document information
Entity Common Stock, Shares Outstanding		16,057,618

Fair Value of Financial Assets and Liabilities (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021 USD ($) security	Dec. 31, 2020 USD ($) security
Fair Value, Assets Transfers
Fair value of assets transferred from Level 1 to Level 2	$ 0	$ 0
Fair value of assets transferred from Level 2 to Level 1	0	0
Fair value of assets transferred from Level 1 to Level 3	0	0
Fair value of assets transferred from Level 2 to Level 3	0	0
Fair value of assets transferred from Level 3 to Level 1	0	0
Fair value of assets transferred from Level 3 to Level 2	$ 0	$ 0
Number of securities in an unrealized loss position \| security	7	17
Securities in unrealized loss position	$ 28,999	$ 107,753
Cash equivalents \| U.S. Treasury Notes
Assets - Fair Value
Short-term investments	65,099	72,695
Short-term investments
Amortized Cost	65,099	72,694
Gross Unrealized Gains		1
Short-term Investments
Assets - Fair Value
Short-term investments	209,268	282,139
Short-term investments
Amortized Cost	209,259	282,153
Gross Unrealized Gains	9	5
Gross Unrealized Losses		(19)
Short-term Investments \| U.S. Treasury Notes
Assets - Fair Value
Short-term investments	144,169	209,444
Short-term investments
Amortized Cost	144,160	209,459
Gross Unrealized Gains	9	4
Gross Unrealized Losses		(19)
Fair Value \| Recurring basis
Assets - Fair Value
Assets	243,311	305,291
Fair Value \| Recurring basis \| Money Market Funds
Assets - Fair Value
Restricted cash	210	210
Cash equivalents	33,833	22,942
Fair Value \| Recurring basis \| U.S. Treasury Notes
Assets - Fair Value
Cash equivalents	65,099	72,695
Short-term investments	144,169	209,444
Fair Value \| Recurring basis \| Level 1
Assets - Fair Value
Assets	34,043	23,152
Fair Value \| Recurring basis \| Level 1 \| Money Market Funds
Assets - Fair Value
Restricted cash	210	210
Cash equivalents	33,833	22,942
Fair Value \| Recurring basis \| Level 2
Assets - Fair Value
Assets	209,268	282,139
Fair Value \| Recurring basis \| Level 2 \| U.S. Treasury Notes
Assets - Fair Value
Cash equivalents	65,099	72,695
Short-term investments	$ 144,169	$ 209,444

License, Acquisition and Collaboration Agreements

3 Months Ended

Mar. 31, 2021

License, Acquisition and Collaboration Agreements

License, Acquisition and Collaboration Agreements

10. License, Acquisition and Collaboration 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

vixarelimab 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 vixarelimab 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, including milestone payments of $4,000 and $10,000 paid during the year ended December 31, 2017 and the year ended December 31, 2019, respectively, each payment was 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 vixarelimab 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 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 March 31, 2021 and 2020, the Company recorded research and development expense of $14 and $64, respectively, related to the annual maintenance fee in connection with the retained contracts.

Beth Israel Deaconess Medical Center License Agreement

In 2019, the Company exercised the call option under the stock purchase option agreement with Primatope Therapeutics, Inc. (“Primatope”) and acquired all of the outstanding securities of Primatope (the “Primatope Acquisition”). As a result of the Primatope Acquisition, the Company acquired the rights to an exclusive license to certain intellectual property rights controlled by Beth Israel Deaconess Medical Center, Inc. (“BIDMC”) to make, use, develop and commercialize KPL-404 (the “BIDMC Agreement”). Under the BIDMC 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. Under the BIDMC Agreement, the Company is obligated to pay an insignificant annual maintenance fee as well as clinical and regulatory milestone payments of up to an aggregate of $1,200 to BIDMC. The Company is also obligated to pay a low single-digit royalty on annual net sales of products licensed under the agreement.

During the three months ended March 31, 2021 and 2020, the Company did not record any research and development expense in connection with the BIDMC Agreement.

Regeneron License Agreement

In September 2017, the Company entered into a license agreement (as amended, 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 ARCALYST 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 was also obligated to make payments to Regeneron of up to an aggregate of $27,500 upon the achievement of specified regulatory milestones, which includes a $7,500 milestone achieved and paid in the fourth quarter of 2020 and a $20,000 milestone achieved and paid in the three months ended March 31, 2021. The $20,000 milestone was accounted for as an intangible asset and will be amortized over the life of the underlying asset. Related amortization expense will be recorded as cost of goods sold in the Company’s consolidated statement of operations and comprehensive loss. During the three months ended March 31, 2021 and 2020, the Company did not incur any research and development expense directly related to milestones due under the Regeneron Agreement.

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. In March 2021, the FDA approved the sBLA for ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years of age and older and the Company assumed the sales and distribution of ARCALYST for the approved indications in the United States, including CAPS and DIRA. The Company will evenly split profits on sales of ARCALYST with Regeneron, after deducting certain commercialization expenses subject to specified limits.

Pursuant to the Regeneron Agreement, in September 2017, the parties entered into a clinical supply agreement under which Regeneron agreed to manufacture product solely for the Company’s use in development activities. Pursuant to the Regeneron Agreement, during the three months ended March 31, 2021, the parties entered into a commercial supply agreement under which Regeneron agreed to manufacture product for the Company’s use, including for commercial sales. During the three months ended March 31, 2021 and 2020, the Company did not incur any research and development expense related to the purchase of drug materials under the clinical supply agreement. During the three months ended March 31, 2021, the Company recorded inventory of $2,189 related to the purchase of commercial product under the commercial supply agreement (see Note 4). As of March 31, 2021, the Company had non-cancelable purchase commitments under the commercial supply agreement (see Note 13).

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 with one year’s written notice. The Company may also terminate the agreement with three months’ written notice if the licensed product is determined to have certain safety concerns.

MedImmune License Agreement

In December 2017, the Company entered into a license agreement (as amended from time to time, 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 was achieved 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. During the year ended December 31, 2019, the Company made both the $5,000 and $10,000 previously accrued milestone payments in accordance with the MedImmune Agreement. 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. In July 2020, the Company entered into an amendment to the MedImmune Agreement to establish a new coronavirus field and defer the payment of certain development and regulatory milestones as applied to the new coronavirus field. 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 months ended March 31, 2021 and 2020, the Company did not record research and development expense in connection with milestone payments due under the MedImmune Agreement.

Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Share-Based Compensation

Schedule of share option activity under the Plans


		Weighted
	Number of	Average
	Shares	Fair Value
Outstanding as of December 31, 2020	9,958,858	$	9.32
Granted	1,037,668	$	15.14
Exercised	(115,012)	$	6.62
Forfeited	(526,081)	$	9.66
Outstanding as of March 31, 2021	10,355,433	$	9.92
Share options exercisable as of March 31, 2021	4,355,393	$	8.74
Share options unvested as of March 31, 2021	6,000,040	$	11.43

Schedule of stock option valuation assumptions presented on weighted-average basis


	Three Months Ended
	March 31,
	2021		2020
Risk-free interest rate	0.98	%	0.82	%
Expected term (in years)	6.25		6.25
Expected volatility	77.26	%	79.83	%
Expected dividend yield	—	%	—	%

Schedule of restricted share activity


		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Unvested RSUs as of December 31, 2020	205,312	$	13.41
Granted	395,903	$	21.90
Vested	—	$	—
Forfeited	(17,630)	$	12.92
Unvested RSUs as of March 31, 2021	583,585	$	19.19

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


	Three Months Ended
	March 31,
	2021		2020
Research and development expenses	$	2,634	$	1,769
Selling, general and administrative expenses		4,492		2,440
	$	7,126	$	4,209

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating expenses:
Research and development	$ 28,683	$ 20,901
General and administrative	20,600	8,486
Total operating expenses	49,283	29,387
Loss from operations	(49,283)	(29,387)
Interest income	9	789
Loss before (provision) benefit for income taxes	(49,274)	(28,598)
(Provision) benefit for income taxes	(210)	2,179
Net loss	$ (49,484)	$ (26,419)
Net loss per share attributable to common shareholders-basic and diluted	$ (0.72)	$ (0.48)
Weighted average common shares outstanding-basic and diluted	68,269,486	55,322,690
Comprehensive loss:
Net loss	$ (49,484)	$ (26,419)
Other comprehensive income (loss):
Unrealized gain on short-term investments and currency translation adjustments, net of tax	13	207
Total other comprehensive income	13	207
Total comprehensive loss	$ (49,471)	$ (26,212)

Nature of the Business and Basis of Presentation

3 Months Ended

Mar. 31, 2021

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’s portfolio of assets is based on strong biologic rationale or validated mechanisms, target underserved conditions and offer the potential for differentiation.

The Company is subject to risks and uncertainties common to early, commercial-stage companies in the biopharmaceutical industry and global health, societal, economic and market conditions, including from the impact from the coronavirus disease 2019 (“COVID-19”) pandemic. While the U.S. Food and Drug Administration (the “FDA”), approved the supplemental Biologics License Application (“sBLA”) for ARCALYST^®(rilonacept) for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years of age and older in March 2021, the Company has limited experience obtaining regulatory approvals. There can be no assurance that the Company’s research and development of its current or future product candidates will be successfully completed, that adequate protection for the Company’s technology will be obtained or maintained, that any current or future product candidates will obtain necessary government regulatory approval or that ARCALYST or any of the Company’s current or future product candidates, if approved, will be commercially viable. Upon approval from the FDA of ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence, the Company assumed the sales and distribution of ARCALYST for the previously approved indications for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome and Muckle-Wells Syndrome, and for the maintenance of remission of Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children 12 years of age and older in the United States and will evenly split profits on sales with Regeneron, Inc. (“Regeneron”), after deducting certain commercialization expenses subject to specified limits. The Company has limited experience conducting sales and marketing activities for therapeutic products, and as a result it may never be able to successfully commercialize ARCALYST or any other marketable product in the future. Furthermore, the Company operates in an environment of rapid technological innovation and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties, including contract research organizations (“CROs”), and contract manufacturing organizations (“CMOs”) for the development and manufacture of its product candidates, respectively. Even if the Company’s current and future product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales or be profitable.

Risk and Uncertainties Related to COVID-19

In addition to risks and uncertainties common to early, commercial-stage companies in the Company’s industry, the Company is subject to global societal, healthcare, economic and market conditions, including from the impact of the COVID-19 pandemic and measures taken in response to the pandemic or the easing of such measures, which continue to evolve. In December 2019, COVID-19 surfaced in Wuhan, China. The virus spread globally and was declared a pandemic by the World Health Organization. The impact of this pandemic has been and will likely continue to be extensive on many aspects of society, which has resulted in and will likely continue to result in significant disruptions to healthcare systems, the global economy, as well as businesses and capital markets around the world.

In an effort to halt the spread of the COVID-19 pandemic, federal and state governments in the United States and the governments of other countries around the globe have implemented various measures in response to the pandemic, including significant restrictions on businesses and travel as well as social-distancing measures and the easing of such measures. In response to the COVID-19 pandemic and measures introduced by federal and state governments in the United States, the Company implemented workplace protocols in the jurisdictions where it has facilities. While the majority of the Company’s employees are able to carry out their responsibilities working outside of the Company’s physical locations, for the Company’s essential workers and those choosing to return to the Company’s offices to carry

out their responsibilities, the Company implemented additional safety measures, including occupancy limits, restricting business travel, providing and requiring the use of personal protective equipment, self-screening prior to accessing the Company’s facilities, among other things. As these measures implemented by federal and state governments in the United States in response to the pandemic continue to evolve, the Company continues to monitor the developments, restrictions and requirements in jurisdictions where it has offices, and plans to update the protocols for its offices as applicable.

The COVID-19 pandemic, and measures undertaken in response to the pandemic, or the easing of any of such measures, may cause significant disruptions in the Company’s business or operations as well as in the business and operations of the Company’s CMOs, CROs and other third parties with whom the Company conducts business or otherwise engages now or in the future, including as a result of staffing shortages or reprioritizations, production slowdowns or stoppages, and disruptions in delivery systems. The COVID-19 pandemic may also adversely impact the Company’s preclinical studies and clinical trials, which could impede, delay, limit or prevent the clinical development of the Company’s product candidates, lead to the delay or denial of regulatory approval of its product candidates or delay or adversely impact the Company’s commercialization activities, which would materially adversely affect the Company’s business and operations, including its ability to generate revenue. Moreover, the COVID-19 pandemic is still impacting the global economy, including the U.S. economy, with the potential for the economic downturn to be severe and prolonged. A severe or prolonged economic downturn could result in continued disruptions in the financial markets, which could adversely impact the Company’s ability to raise additional capital when needed or on acceptable terms, if at all.

While the Company continuously looks to identify business-critical activities and to develop contingencies and mitigation strategies for those activities to potentially minimize the impact of the COVID-19 pandemic on its business and operations, there can be no assurance that it will be able to identify all such activities or that any identified contingencies and mitigation strategies will be effective. Further, the COVID-19 pandemic, and measures undertaken in response to the pandemic continue to rapidly evolve, including the presence of new variants. There is uncertainty relating to the potential effect of the pandemic on the Company’s business and operations. The extent of the impact on the Company’s business and operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate spread of the disease, duration of the pandemic, business and travel restrictions and social distancing measures, and the effectiveness of these and other actions taken to contain, prevent and treat the disease as well as the impact of the easement of any such restrictions, measures and actions.

Principles of Consolidation

Use of Estimates

Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Reporting and Functional Currency

Unaudited Interim Consolidated Financial Information

Liquidity

In accordance with Accounting Standards Update (“ASU”) No. 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 March 31, 2021, the Company had an accumulated deficit of $566,957. During the three months ended March 31, 2021, the Company incurred a net loss of $49,484, used $40,122 of cash in operating activities, and paid $20,000 upon the achievement of specified regulatory milestone (see Note 10). The Company expects to continue to generate operating losses for the foreseeable future. As of March 31, 2021, the Company had cash, cash equivalents and short-term investments of $264,025.

Based on its current operating plan, the Company expects that its cash, cash equivalents and short-term investments will be sufficient to fund its operations 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. The Company will need to finance its operations through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements. 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 commercialization efforts, research and development programs for product candidates or product portfolio expansion, which could adversely affect its business prospects, or the Company may be unable to continue operations.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Summary of Significant Accounting Policies

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.

●

Leases

Inventory

Intangible Assets

Impairment of long-lived assets

Research and Development Costs

Research Contract Costs and Accruals

Share-Based Compensation

Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.

Comprehensive Loss

Net Loss per Share

Income Taxes

Recently Adopted Accounting Pronouncements

Share-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-Based Compensation

Share-Based Compensation

9. 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. The 2018 Plan provides for the grant of incentive share options, nonqualified share options, share appreciation rights, restricted shares, dividend equivalents, restricted share units and other share- or cash- based awards. Upon the effectiveness of the 2018 Plan, the Company ceased granting awards under its 2015 Equity Incentive Plan (as amended, the “2015 Plan” together with the 2018 Plan, the “Plans”).

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 in 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (1) 4% of the Class A common shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (2) a smaller number of Class A common shares determined by the Company’s board of directors. In December 2020, the board of directors approved the automatic increase as of January 1, 2021 of 2,728,600 shares, equal to 4% of the as-converted Class A common shares outstanding on December 31, 2020. 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, lapses 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 March 31, 2021, 3,457,214 shares remained available for future grant.

2015 Equity Incentive Plan

Until May 23, 2018 (the effective date of the 2018 Plan), the 2015 Plan provided for the Company to grant incentive share options, nonqualified share 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 Class A common shares subject to outstanding awards under the 2015 Plan remained reserved for issuance under the plan pursuant to such awards and the 92,170 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. The 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it. Class A common shares subject to awards granted under the 2015 Plan that expire, lapse unexercised or are terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited become available for issuance under the 2018 Plan. As of March 31, 2021, there were 2,758,352 Class A common shares subject to outstanding awards under the 2015 Plan and reserved for issuance there under pursuant to such awards.

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 in 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2028, equal to the lesser of (1) 1% of the Class A common shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (2) 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. In December 2020, the Company’s board of directors approved an increase as of January 1, 2021 of 130,000 shares. As of March 31, 2021, 648,794 Class A common shares were available for future issuance under the 2018 ESPP.

Rilonacept Long-Term Incentive Plan

In December 2019, the compensation committee of the Company’s board of directors approved the Company’s Rilonacept Long-Term Incentive Plan (“RLTIP”) under the 2018 Plan to incentivize eligible employees of the Company or any of its subsidiaries to achieve FDA approval for the commercial sale and marketing of rilonacept for recurrent pericarditis in the United States (“RLTIP Milestone”). The RLTIP provides for the potential to receive a cash award and two grants of restricted share units (“RSU”) awards covering Class A common shares under the 2018 Plan. The target award value for each of the cash award and the two RSU awards will be equal to one-third of a participant’s annual target bonus for the year of grant, as determined in accordance with the RLTIP. Depending on the date-range within

which the RLTIP Milestone is certified by the Compensation Committee as being achieved (such date the “Achievement Date”), the RLTIP provides for (1) an earnout percentage that can be achieved as to 100%, 50%, 25% or 0% and (2) an upside earnout percentage that can be achieved as to 50%, 25% or 0%. No awards will be earned or vest, and the second RSU award will not be granted, in the event the Achievement Date does not occur by a specified date. The cash award is eligible to be earned and vested upon the Achievement Date with respect to an amount determined based on the earnout percentage and the number of Class A common shares issuable under the first RSU award (“First RSU Award”) upon the Achievement Date determined based on the earnout percentage and will vest on the first anniversary of the Achievement Date, subject to continued employment through such date. The second RSU award (“Second RSU Award”) will be granted on the Achievement Date with respect to a number of shares determined based on both the earnout percentage and the upside earnout percentage, and will vest on the second anniversary of the Achievement Date, subject to continued employment through such date.

Options

Share option activity under the Plans is summarized as follows:


		Weighted
	Number of	Average
	Shares	Fair Value
Outstanding as of December 31, 2020	9,958,858	$	9.32
Granted	1,037,668	$	15.14
Exercised	(115,012)	$	6.62
Forfeited	(526,081)	$	9.66
Outstanding as of March 31, 2021	10,355,433	$	9.92
Share options exercisable as of March 31, 2021	4,355,393	$	8.74
Share options unvested as of March 31, 2021	6,000,040	$	11.43

Option Valuation

The assumptions that the Company used to determine the grant-date fair value of options granted to employees and directors under the Plans during the three months ended March 31, 2021 and 2020 were as follows, presented on a weighted-average basis:


	Three Months Ended
	March 31,
	2021		2020
Risk-free interest rate	0.98	%	0.82	%
Expected term (in years)	6.25		6.25
Expected volatility	77.26	%	79.83	%
Expected dividend yield	—	%	—	%

Restricted Share Units

Restricted share units (“RSUs”) represent the right to receive shares of the Company’s Class A common shares upon vesting of the RSUs. The fair value of each RSU award is based on the closing price of the Company’s Class A common shares on the date of grant.

In March 2021, the Company granted RSUs with service conditions (“Time-Based RSUs”) to eligible employees. The Time-Based RSUs will vest 25% on each of the first, second, third and fourth anniversaries of the date of grant, subject to continued employment through such dates.

In December 2019, the Company granted Time-Based RSUs that vested in one installment on December 31, 2020, subject to the recipient’s continued employment through that date. As of December 31, 2020, 56,369 class A common shares were issued with the remaining shares 24,332 shares withheld for tax purposes.

During the year ended December 31, 2020 and in December 2019, the Company granted the First RSU Awards as part of the RLTIP to eligible employees. During the three months ended March 31, 2021, the Achievement Date was met and (1) the number of Class A common shares issuable under the First RSU Awards were determined in accordance with the RLTIP and will vest in one installment on the first anniversary of the Achievement Date, subject to continued employment through such date, and (2) the Second RSU Awards were granted to eligible employees on the Achievement Date with respect to a number of shares determined in accordance with the RLTIP and will vest on the second anniversary of the Achievement Date, subject to continued employment through such date.

During the three months ended March 31, 2021, the Company recognized compensation expense of $1,452 related to RSUs including those granted in connection to the RLTIP. During the three months ended March 31, 2020, the Company recognized $261 in compensation expense related to the Time-Based RSUs and the Company did not recognize any compensation expense related to the First RSU Award, as achievement of the RLTIP Milestone was determined to be not probable as of that date.

The following table summarizes RSU activity, including the RSUs outstanding under the RLTIP for the three months ended March 31, 2021:


		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Unvested RSUs as of December 31, 2020	205,312	$	13.41
Granted	395,903	$	21.90
Vested	—	$	—
Forfeited	(17,630)	$	12.92
Unvested RSUs as of March 31, 2021	583,585	$	19.19

Share-Based Compensation

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


	Three Months Ended
	March 31,
	2021		2020
Research and development expenses	$	2,634	$	1,769
Selling, general and administrative expenses		4,492		2,440
	$	7,126	$	4,209

Fair Value of Financial Assets and Liabilities

3 Months Ended

Mar. 31, 2021

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s financial instruments 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 March 31, 2021 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		33,833		—		—		33,833
Cash equivalents — U.S. Treasury notes		—		65,099		—		65,099
Short-term investments — U.S. Treasury notes		—		144,169		—		144,169
	$	34,043	$	209,268	$	—	$	243,311


	Fair Value Measurements
	as of December 31, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash — money market funds	$	210	$	—	$	—	$	210
Cash equivalents — money market funds		22,942		—		—		22,942
Cash equivalents — U.S. Treasury notes		—		72,695		—		72,695
Short-term investments — U.S. Treasury notes		—		209,444		—		209,444
	$	23,152	$	282,139	$	—	$	305,291

During the three months ended March 31, 2021 and the year ended December 31, 2020 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 March 31, 2021 and December 31, 2020 included 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.

Short-term investments as of March 31, 2021 and December 31, 2020 consisted of U.S. Treasury notes which investments were each due within six months of such date.
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
March 31, 2021
Cash equivalents — U.S. Treasury notes	$	65,099	$	—	$	—	$	65,099
Short-term investments — U.S. Treasury notes		144,160		9		—		144,169
	$	209,259	$	9	$	—	$	209,268


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
December 31, 2020
Cash equivalents — U.S. Treasury notes	$	72,694	$	1	$	—	$	72,695
Short-term investments — U.S. Treasury notes		209,459		4		(19)		209,444
	$	282,153	$	5	$	(19)	$	282,139

As of March 31, 2021, the Company held seven securities that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position was $28,999 at March 31, 2021. As of December 31, 2020, the Company held 17 securities that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position was $107,753 at December 31, 2020. As of both March 31, 2021 and December 31, 2020, these securities were held by the Company in an unrealized loss position for less than 12 months. The Company determined that there was no material change in the credit risk of these securities. As a result, the Company determined it did not hold any investments with an other-than-temporary impairment as of March 31, 2021 and December 31, 2020.

- Definition

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

+ References + Details

Share-Based Compensation - Restricted Shares and RSUs (Details) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($)	Dec. 31, 2020 installment $ / shares shares	Dec. 31, 2019 installment
Share-based compensation
Share-based compensation expense \| $	$ 7,126	$ 4,209
Restricted Share Units (RSUs)
Share-based compensation
Share-based compensation expense \| $	$ 1,452
Number of shares
Beginning of the period	205,312
Granted	395,903
Forfeited	(17,630)
End of the period	583,585		205,312
Weighted Average Fair Value at Issuance
Beginning of the period \| $ / shares	$ 13.41
Granted \| $ / shares	21.90
Forfeited \| $ / shares	12.92
End of the period \| $ / shares	$ 19.19		$ 13.41
Time-based RSUs
Share-based compensation
Number of vesting installments \| installment			1
Vesting percentage	25.00%
Common shares issued			56,369
Common shares withheld for tax purposes			24,332
Share-based compensation expense \| $		261
First RSU Award
Share-based compensation
Number of vesting installments \| installment			1	1
Share-based compensation expense \| $		$ 0

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net loss	$ (49,484)	$ (26,419)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	312	594
Share-based compensation expense	7,126	4,209
Non-cash lease expense	593	300
Amortization of premiums and accretion of discounts on short-term investments	410	(228)
Deferred income taxes	10	(1,038)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	408	(598)
Other long-term assets	(231)
Accounts payable	72	(1,197)
Accrued expenses and other liabilities	1,079	(7,061)
Operating lease liabilities	(421)	(413)
Other long-term liabilities	4	55
Net cash used in operating activities	(40,122)	(31,796)
Cash flows from investing activities:
Purchases of property and equipment	(54)	(223)
Purchases of short-term investments	(74,362)	(26,187)
Proceeds from the maturities of short-term investments	139,250	115,200
Intangible asset acquired	(20,000)
Net cash provided by investing activities	44,834	88,790
Cash flows from financing activities:
Proceeds from issuance of common stock under incentive award plans	1,106	2,414
Net cash provided by financing activities	1,106	2,414
Net increase in cash, cash equivalents and restricted cash	5,818	59,408
Cash, cash equivalents and restricted cash at beginning of period	114,248	47,138
Cash, cash equivalents and restricted cash at end of period	$ 120,066	$ 106,546

Nature of the Business and Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Nature of the Business and Basis of Presentation
Accumulated deficit	$ 566,957		$ 517,473
Net losses	49,484	$ 26,419
Cash used in operations	40,122	$ 31,796
Regulatory milestone payment	20,000
Cash, cash equivalents and short-term investments	$ 264,025

- Definition

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

+ References

+ Details

Common Shares (Details) $ / shares in Units, $ in Thousands			3 Months Ended
Common Shares (Details) $ / shares in Units, $ in Thousands	Jul. 24, 2020 USD ($) $ / shares shares	May 18, 2020 USD ($) $ / shares shares	Mar. 31, 2021 USD ($) Vote shares
Nature of the Business and Basis of Presentation
Common stock, cash dividends declared or paid \| $			$ 0
Class A common shares
Nature of the Business and Basis of Presentation
Number of votes (per share) \| Vote			1
Class A1 common shares
Nature of the Business and Basis of Presentation
Number of votes (per share) \| Vote			0
Convertible ratio to Class A common share			1
Class B common shares
Nature of the Business and Basis of Presentation
Number of votes (per share) \| Vote			10
Convertible ratio to Class A common share			1
Convertible ratio to Class B1 common share			1
Class B1 common shares
Nature of the Business and Basis of Presentation
Number of votes (per share) \| Vote			0
Convertible ratio to Class A common share			1
Convertible ratio to Class B common share			1
Convertible Preferred Shares
Nature of the Business and Basis of Presentation
Preferred shares designated \| shares			0
Preferred stock, shares issued (in shares) \| shares			0
Follow-On Public Offering and Private Placement Inclusive of Over-Allotment
Nature of the Business and Basis of Presentation
Aggregate proceeds from offerings net of underwriter discounts and commissions, placement agent fees and other offering costs \| $	$ 146,037	$ 74,495
Follow-On Public Offering and Private Placement \| Common Class A and Class A1 common shares
Nature of the Business and Basis of Presentation
Gross proceeds from offering \| $	$ 155,000	$ 79,570
Follow-On Offering \| Class A common shares
Nature of the Business and Basis of Presentation
Issuance of stock (in shares) \| shares	5,952,381	2,760,000
Share price (in dollars per share) \| $ / shares	$ 21.00	$ 18.25
Private Placement \| Class A1 common shares
Nature of the Business and Basis of Presentation
Issuance of stock (in shares) \| shares	1,428,572	1,600,000
Share price (in dollars per share) \| $ / shares	$ 21.00	$ 18.25

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accrued Expenses
Accrued research and development expenses	$ 20,038	$ 16,945
Accrued employee compensation and benefits	7,130	7,704
Accrued legal and professional fees	2,857	3,988
Other	291	562
Accrued expenses	$ 30,316	$ 29,199

Summary of Significant Accounting Policies (Details)	3 Months Ended		12 Months Ended
Summary of Significant Accounting Policies (Details)	Mar. 31, 2021 USD ($) item	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) item
Restricted cash
Cash securing letter of credit	$ 210,000		$ 210,000
Intangible assets
Intangible asset	$ 20,000,000		$ 0
Estimated life	20 years
Income Taxes
Bermuda statutory income tax rate	0.00%	0.00%
Income tax benefits - Bermuda	$ 0	$ 0
Net operating loss carryforwards - Bermuda	$ 0	$ 0
Cash and cash equivalents \| Credit concentration
Concentration risk
Number of financial institutions holding cash, cash equivalents and short-term investments \| item	2		2

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventory
Finished goods	$ 2,189
Total inventory	$ 2,189	$ 0

Intangible Assets - Future Amortization (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Expected amortization
2021 (remaining nine months)	$ 750
2022	1,000
2023	1,000
2024	1,000
2025	1,000
2026	1,000
2027 and thereafter	$ 14,250

Share-Based Compensation - Option Valuation (Details)	3 Months Ended
Share-Based Compensation - Option Valuation (Details)	Mar. 31, 2021	Mar. 31, 2020
Assumptions to determine fair value of options granted on weighted average basis:
Risk-free interest rate	0.98%	0.82%
Expected term (in years)	6 years 3 months	6 years 3 months
Expected volatility	77.26%	79.83%

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net loss attributable to common shareholders	$ (49,484)	$ (26,419)
Denominator:
Weighted average common shares outstanding - basic and diluted	68,269,486	55,322,690
Net loss per share attributable to common shareholders - basic and diluted	$ (0.72)	$ (0.48)

Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Finite-lived intangible asset
Estimated life	20 years
Cost	$ 20,000
Net	$ 20,000	$ 0
Regulatory milestone
Finite-lived intangible asset
Estimated life	20 years
Cost	$ 20,000
Net	$ 20,000

License, Acquisition and Collaboration Agreements - Biogen Asset Purchase Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Sep. 30, 2016	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2017
License and Acquisition Agreements
Research and development		$ 28,683	$ 20,901
Asset Purchase Agreement \| Biogen
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 11,500
Technology transfer payment	500
Milestone payment upon achievement of clinical milestone event				$ 10,000	$ 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 which 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		$ 14	$ 64
Asset Purchase Agreement \| Biogen \| Maximum
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

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Class A common shares
Common stock, par value (in dollars per share)	$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	32,320,276	31,777,420
Common stock, shares outstanding (in shares)	32,320,276	31,777,420
Class B common shares
Common stock, par value (in dollars per share)	$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	1,927,614	2,355,458
Common stock, shares outstanding (in shares)	1,927,614	2,355,458
Class A1 common shares
Common stock, par value (in dollars per share)	$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	18,024,526	18,024,526
Common stock, shares outstanding (in shares)	18,024,526	18,024,526
Class B1 common shares
Common stock, par value (in dollars per share)	$ 0.000273235	$ 0.000273235
Common stock, shares issued (in shares)	16,057,618	16,057,618
Common stock, shares outstanding (in shares)	16,057,618	16,057,618

Income Taxes (Details) - USD ($)	3 Months Ended
Income Taxes (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Income Taxes
Bermuda statutory income tax rate	0.00%	0.00%
Income tax benefits - Bermuda	$ 0	$ 0
Net operating loss carryforwards - Bermuda	0	0
Income tax expense (benefit)	$ 210,000	$ (2,179,000)

Commitments and Contingencies (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Manufacturing commitments
Non-cancelable purchase commitments	$ 17,091

License, Acquisition and Collaboration Agreements - Regeneron License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Sep. 30, 2017	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
License and Acquisition Agreements
Regulatory milestone payment		$ 20,000
Research and development		28,683		$ 20,901
Intangible asset - Regulatory milestone		20,000
Commercial product inventory		2,189
Regeneron \| License Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights	$ 5,000
Regulatory milestone payment		20,000	$ 7,500
Research and development		0		0
Uncured period which 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
Consecutive suspension of activities period for termination of agreement	12 months
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
Regeneron \| Clinical Supply Agreement
License and Acquisition Agreements
Research and development expense related to purchase of drug materials		$ 0		$ 0
Maximum \| Regeneron \| License Agreement
License and Acquisition Agreements
Milestone payment to be paid upon regulatory milestone achievement	$ 27,500

License, Acquisition and Collaboration Agreements - MedImmune License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended			12 Months Ended
	Jul. 31, 2020	Dec. 31, 2017	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2018	Dec. 31, 2019
License and Acquisition Agreements
Research and development			$ 28,683	$ 20,901
MedImmune \| License Agreement
License and Acquisition Agreements
Upfront payment for exchange of rights		$ 8,000
Milestone payment to be paid upon regulatory milestone achievement					$ 10,000
Pass-through payment paid upon clinical milestone achievement					$ 5,000	$ 5,000
Payment of accrued milestones						$ 10,000
Annual net sales excluded 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			$ 0	$ 0
Minimum \| MedImmune \| License Agreement
License and Acquisition Agreements
Additional specified annual net sales threshold for additional milestone payment.	$ 1,000,000
Maximum \| MedImmune \| License Agreement
License and Acquisition Agreements
Milestone payment to be paid upon specified milestone achievements for first two indications		72,500
Milestone payment to be paid upon clinical and regulatory milestone achievement		$ 15,000
Milestone payment to be paid upon specified annual sales milestone achievements	85,000
Additional milestone payments payable after achievement of additional annual sales	$ 1,100,000