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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2020	Apr. 30, 2020
Document and Entity Information
Document Type	10-Q
Document Transition Report	false
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Entity File Number	0-17999
Entity Registrant Name	ImmunoGen, Inc.
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2726691
Entity Address, Address Line One	830 Winter Street
Entity Address, City or Town	Waltham
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02451
City Area Code	781
Local Phone Number	895-0600
Title of 12(b) Security	Common Stock
Trading Symbol	IMGN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		174,405,935
Entity Central Index Key	0000855654
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 247,299	$ 176,225
Accounts receivable	54	7,500
Unbilled revenue/reimbursement	1,753	1,001
Contract asset	990	3,631
Non-cash royalty receivable	12,977	15,116
Prepaid and other current assets	7,653	5,425
Total current assets	270,726	208,898
Property and equipment, net of accumulated depreciation	6,018	6,993
Operating lease right-of-use assets	15,234	15,587
Other assets	6,831	3,784
Total assets	298,809	235,262
LIABILITIES AND SHAREHOLDERS (DEFICIT) EQUITY
Accounts payable	9,534	9,933
Accrued compensation	5,211	8,991
Other accrued liabilities	18,916	13,932
Current portion of liability related to the sale of future royalties, net of deferred financing costs of $557 and $635, respectively	48,651	41,274
Current portion of operating lease liability	3,071	2,971
Current portion of deferred revenue	123	309
Total current liabilities	85,506	77,410
Deferred revenue, net of current portion	127,387	127,123
Operating lease liability - net of current portion	20,996	21,798
Convertible 4.5% senior notes, net of deferred financing costs of $18 and $22, respectively	2,082	2,078
Liability related to the sale of future royalties, net of current portion and deferred financing costs of $765 and $859, respectively	65,452	82,267
Other long-term liabilities	1,489	707
Total liabilities	302,912	311,383
Commitments and contingencies (Note I)
Shareholders' deficit:
Preferred stock, $.01 par value; authorized 5,000 shares; no shares issued and outstanding as of March 31, 2020 and December 31, 2020
Common stock, $.01 par value; authorized 200,000 shares; issued and outstanding 174,261 and 150,136 shares as of March 31, 2020 and December 31, 2019, respectively	1,743	1,501
Additional paid-in capital	1,310,710	1,209,846
Accumulated deficit	(1,316,556)	(1,287,468)
Total shareholders? deficit	(4,103)	(76,121)
Total liabilities and shareholders? deficit	$ 298,809	$ 235,262

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Current portion of deferred financing costs	$ 557	$ 635
Interest rate (as a percent)	4.50%	4.50%
Non-current deferred financing costs	$ 18	$ 22
Sale of future royalties, current portion and deferred financing costs	$ 765	$ 859
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	200,000,000	200,000,000
Common stock, issued shares	174,261,000	150,136,000
Common stock, outstanding shares	174,261,000	150,136,000

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 13,287,000	$ 8,584,000
Operating expenses:
Research and development	27,408,000	38,893,000
General and administrative	8,864,000	10,778,000
Restructuring charge	825,000	559,000
Total operating expenses	37,097,000	50,230,000
Loss from operations	(23,810,000)	(41,646,000)
Investment income, net	646,000	1,422,000
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes	(5,702,000)	(3,432,000)
Interest expense on convertible senior notes	(24,000)	(24,000)
Other expense, net	(198,000)	(71,000)
Net loss	$ (29,088,000)	$ (43,751,000)
Basic and diluted net loss per common share (in dollar per share)	$ (0.17)	$ (0.30)
Basic and diluted weighted average common shares outstanding (in shares)	166,947	147,813
Total comprehensive loss	$ (29,088,000)	$ (43,751,000)
License and milestone fees
Revenues:
Total revenues	283,000	79,000
Non-cash royalty revenue related to the sale of future royalties
Revenues:
Total revenues	12,997,000	8,488,000
Research and development support
Revenues:
Total revenues	$ 7,000	$ 17,000

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 1,494	$ 1,192,813	$ (1,183,335)	$ 10,972
Balance (in shares) at Dec. 31, 2018	149,400,000
Increase (Decrease) in Shareholders' (Deficit) Equity
Net income (loss)			(43,751)	(43,751)
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan		68		68
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares)	25,000
Stock option and restricted stock compensation expense		5,007		5,007
Directors' deferred share unit compensation		100		100
Balance at Mar. 31, 2019	$ 1,494	1,197,988	(1,227,086)	(27,604)
Balance (in shares) at Mar. 31, 2019	149,425,000
Balance at Dec. 31, 2018	$ 1,494	1,192,813	(1,183,335)	10,972
Balance (in shares) at Dec. 31, 2018	149,400,000
Increase (Decrease) in Shareholders' (Deficit) Equity
Net income (loss)			4,814	4,814
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan	$ 7	2,054		2,061
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares)	741,000
Restricted stock award - net of forfeitures	$ (4)	4
Restricted stock award - net of forfeitures (in shares)	(293,000)
Stock option and restricted stock compensation expense		3,138		3,138
Directors' deferred share unit compensation		91		91
Balance at Dec. 31, 2019	$ 1,501	1,209,846	(1,287,468)	$ (76,121)
Balance (in shares) at Dec. 31, 2019	150,136,000			150,136,000
Balance at Mar. 31, 2019	$ 1,494	1,197,988	(1,227,086)	$ (27,604)
Balance (in shares) at Mar. 31, 2019	149,425,000
Increase (Decrease) in Shareholders' (Deficit) Equity
Net income (loss)			(43,446)	(43,446)
Issuance of common stock	$ 3	667		670
Issuance of common stock (in shares)	354,000
Restricted stock award - net of forfeitures	$ 1	(1)
Restricted stock award - net of forfeitures (in shares)	106,000
Stock option and restricted stock compensation expense		2,106		2,106
Directors' deferred share unit compensation		100		100
Balance at Jun. 30, 2019	$ 1,498	1,200,860	(1,270,532)	(68,174)
Balance (in shares) at Jun. 30, 2019	149,885,000
Increase (Decrease) in Shareholders' (Deficit) Equity
Net income (loss)			(21,750)	(21,750)
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan		73		73
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares)	30,000
Restricted stock award - net of forfeitures (in shares)	(227,000)
Stock option and restricted stock compensation expense		3,580		3,580
Directors' deferred share unit compensation		46		46
Balance at Sep. 30, 2019	$ 1,498	1,204,559	(1,292,282)	(86,225)
Balance (in shares) at Sep. 30, 2019	149,688,000
Balance at Dec. 31, 2019	$ 1,501	1,209,846	(1,287,468)	$ (76,121)
Balance (in shares) at Dec. 31, 2019	150,136,000			150,136,000
Increase (Decrease) in Shareholders' (Deficit) Equity
Net income (loss)			(29,088)	$ (29,088)
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan	$ 1	239		$ 240
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares)	86,000
Stock options exercised (in shares)				86,000
Issuance of common stock	$ 245	97,499		$ 97,744
Issuance of common stock (in shares)	24,524,000
Restricted stock units vested (in shares)	2,000
Restricted stock award - net of forfeitures	$ (4)	4
Restricted stock award - net of forfeitures (in shares)	(487,000)
Stock option and restricted stock compensation expense		3,122		3,122
Balance at Mar. 31, 2020	$ 1,743	$ 1,310,710	$ (1,316,556)	$ (4,103)
Balance (in shares) at Mar. 31, 2020	174,261,000			174,261,000

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net loss	$ (29,088)	$ (43,751)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Non-cash royalty revenue related to sale of future royalties	(12,997)	(8,488)
Non-cash interest expense on liability related to sale of future royalties and convertible senior notes	5,702	3,432
Depreciation and amortization	529	1,200
(Gain) loss on sale/disposal of fixed assets and impairment charges	(709)	444
Stock and deferred share unit compensation	3,122	5,107
Change in operating assets and liabilities:
Accounts receivable	7,446	1,468
Unbilled revenue/reimbursement	(752)	(3,365)
Contract asset	2,641	500
Prepaid and other current assets	(2,228)	(2,248)
Operating lease right-of-use assets	353	348
Other assets	(3,047)	44
Accounts payable	(649)	(2,698)
Accrued compensation	(3,267)	(7,373)
Other accrued liabilities	5,253	931
Deferred revenue	78	65,208
Operating lease liability	(702)	(556)
Net cash (used for) provided by operating activities	(28,315)	10,203
Cash flows from investing activities:
Purchases of property and equipment	(21)	(2,127)
Proceeds from sale of equipment	1,426
Net cash provided by (used for) investing activities	1,405	(2,127)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock plans	240	68
Proceeds from common stock issuance, net of $229 of transaction costs	97,744
Net cash provided by financing activities	97,984	68
Net change in cash and cash equivalents	71,074	8,144
Cash and cash equivalents, beginning of period	176,225	262,252
Cash and cash equivalents, end of period	$ 247,299	$ 270,396

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Transaction costs	$ 229

Nature of Business and Plan of Operations

3 Months Ended

Mar. 31, 2020

Nature of Business and Plan of Operations

Nature of Business and Plan of Operations

A.	Nature of Business and Plan of Operations

ImmunoGen, Inc. (the Company) was incorporated in Massachusetts in 1981 and is focused on the development of antibody-drug conjugates, or ADCs. The Company has generally incurred operating losses and negative cash flows from operations since inception, incurred a net loss of $29.1 million during the three months ended March 31, 2020, and has an accumulated deficit of approximately $1.3 billion as of March 31, 2020. The Company has primarily funded these losses through payments received from its collaborations and equity, convertible debt, and other financings. To date, the Company has no product revenue and management expects operating losses to continue for the foreseeable future.

At March 31, 2020, the Company had $247.3 million of cash and cash equivalents on hand. The Company anticipates that its current capital resources will enable it to meet its operational expenses and capital expenditures for more than twelve months after the date these financial statements are issued. The Company may raise additional funds through equity, debt, or other financings, or generate revenues from collaborators through a combination of upfront license payments, milestone payments, royalty payments, and research funding. There can be no assurance that the Company will be able to obtain additional debt, equity, or other financing or generate revenues from collaborators on terms acceptable to the Company or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition and require the Company to defer or limit some or all of its research, development, and/or clinical projects.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, the development by its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, manufacturing and marketing limitations, complexities associated with managing collaboration arrangements, third-party reimbursements, and compliance with governmental regulations.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

B.	Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, ImmunoGen Securities Corp., ImmunoGen Europe Limited, ImmunoGen (Bermuda) Ltd., ImmunoGen BioPharma (Ireland) Limited, and Hurricane, LLC. All intercompany transactions and balances have been eliminated. The consolidated financial statements include all of the adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the Company’s financial position in accordance with accounting principles generally accepted in the U.S. for interim financial information. The December 31, 2019 consolidated balance sheet presented for comparative purposes was derived from the Company’s audited financial statements, and certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenditures during the reported periods. The results of the interim periods are not necessarily indicative of the results for the entire year. Accordingly, the interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 11, 2020.

Subsequent Events

The Company has evaluated all events or transactions that occurred after March 31, 2020, up through the date the Company issued these financial statements. The Company did not have any material recognized or unrecognized subsequent events during this period.

Revenue Recognition

The Company enters into licensing and development agreements with collaborators for the development of

ADCs. The terms of these agreements contain multiple deliverables/performance obligations which may include (i) licenses, or options to obtain licenses, to the Company’s ADC technology, (ii) rights to future technological improvements, and (iii) miscellaneous other activities to be performed on behalf of the collaborative partner. Payments to the Company under these agreements may include upfront fees, option fees, exercise fees, payments for miscellaneous other activities, payments based upon the achievement of certain milestones, and royalties on product sales. The Company follows the provisions of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers (ASC 606) in accounting for these agreements.

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under the agreements, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when or as the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied.

As part of the accounting for arrangements, the Company must develop assumptions that require judgment to determine the selling price for each performance obligation that was identified in the contract, which is discussed in further detail below.

At March 31, 2020, the Company had the following types of material agreements with the parties identified below:

●

Development and commercialization licenses, which provide the counterparty with the right to use the Company’s ADC technology and/or certain other intellectual property to develop and commercialize anticancer compounds to a specified antigen target:

Bayer (one exclusive single-target license)

Biotest (one exclusive single-target license)

CytomX (two exclusive single-target licenses)

Debiopharm (one exclusive single-compound license)

Fusion Pharmaceuticals (one exclusive single-target license)

Novartis (five exclusive single-target licenses)

Oxford BioTherapeutics/Menarini (one exclusive single target license sublicensed from Amgen)

Roche, through its Genentech unit (five exclusive single-target licenses)

Sanofi (five fully-paid, exclusive single-target licenses)

Takeda, through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. (one exclusive single-target license)

●

Collaboration and option agreement for a defined period of time to secure a license to develop and commercialize a specified anticancer compound on established terms:

Jazz Pharmaceuticals

●

Collaboration and license agreement to co-develop and co-commercialize a specified anticancer compound on established terms:

MacroGenics

There are no performance, cancellation, termination, or refund provisions in any of the arrangements that contain material financial consequences to the Company.

Development and Commercialization Licenses

The obligations under a development and commercialization license agreement generally include the license to the Company’s ADC technology with respect to a specified antigen target, and may also include obligations related to rights to future technological improvements and miscellaneous other activities to be performed on behalf of the collaborative partner.

Generally, development and commercialization licenses contain non-refundable terms for payments and, depending on the terms of the agreement, provide that the Company will earn payments upon the achievement of certain milestones and royalty payments, generally until the later of the last applicable patent expiration or 10 to 12 years after product launch. Royalty rates may vary over the royalty term depending on the Company’s intellectual property rights and/or the presence of comparable competing products. In the case of Sanofi, its licenses are fully-paid and no further milestones or royalties will be received. In the case of Debiopharm, no royalties will be received. The Company may provide technology transfer services in connection with the out-licensing of product candidates initially developed by the Company at negotiated prices which are generally consistent with what other third parties would charge. The Company may also provide technical assistance and share any technology improvements with its collaborators during the term of the collaboration agreements. The Company does not directly control when or whether any collaborator will request research, achieve milestones, or become liable for royalty payments.

In determining the performance obligations, management evaluates whether the license is distinct, and has significant standalone functionality, from the undelivered elements to the collaborative partner based on the consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research capabilities of the partner and the availability of ADC technology research expertise in the general marketplace and whether technological improvements are required for the continued functionality of the license. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

The Company estimates the selling prices of the license and all other performance obligations based on market conditions, similar arrangements entered into by third parties, and entity-specific factors such as the terms of the Company’s previous collaborative agreements, recent preclinical and clinical testing results of therapeutic products that use the Company’s ADC technology, the Company’s pricing practices and pricing objectives, the likelihood that technological improvements will be made, and, if made, will be used by the Company’s collaborators, and the nature of the other services to be performed on behalf of its collaborators and market rates for similar services.

The Company recognizes revenue related to other services as they are performed. The Company is compensated at negotiated rates that are consistent with what other third parties would charge. The Company records amounts received for services performed as a component of research and development support revenue.

The Company recognizes revenue related to the rights to future technological improvements over the estimated term of the applicable license.

The Company’s development and commercialization license agreements have milestone payments which for reporting purposes are aggregated into three categories: (i) development milestones, (ii) regulatory milestones, and (iii) sales milestones. Development milestones are typically payable when a product candidate initiates or advances into different clinical trial phases. Regulatory milestones are typically payable upon submission for marketing approval with the U.S. Food and Drug Administration (FDA) or other countries’ regulatory authorities or on receipt of actual marketing approvals for the compound or for additional indications. Sales milestones are typically payable when annual sales reach certain levels.

At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the achievement of each milestone specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the achievement of the milestone, the associated milestone value is allocated to that distinct good or service. If the milestone payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. In addition, the Company evaluates the milestone to determine whether the milestone is considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated; otherwise, such amounts are considered constrained and excluded from the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development or regulatory milestones and any related constraint and, if necessary, adjusts its estimate of the transaction price. Any such adjustments to the transaction price are allocated to the performance obligations on the same basis as at contract inception. Amounts allocated to a satisfied performance obligation shall be recognized as revenue, or as a reduction of revenue, in the period in which the transaction price changes.

For development and commercialization license agreements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied) in accordance with the royalty recognition constraint. Under the Company’s development and commercialization license agreements, except for the Sanofi and Debiopharm licenses, the Company receives royalty payments based upon its licensees’ net sales of covered products. Generally, under the development and commercialization agreements, the Company receives royalty reports and payments from its licensees approximately one quarter in arrears. The Company estimates the amount of royalty revenue to be recognized based on historical and forecasted sales and/or sales information from its licensees if available.

Collaboration and Option Agreements/Right-to-Test Agreements

The Company’s right-to-test agreements provide collaborators the right to test the Company’s ADC technology for a defined period of time through a research, or right-to-test, license. Under both right-to-test agreements and collaboration and option agreements, collaborators may (a) take options, for a defined period of time, to specified targets and (b) upon exercise of those options, secure or “take” licenses to develop and commercialize products for the specified targets on established terms. Under these agreements, fees may be due to the Company (i) at the inception of the arrangement (referred to as “upfront” fees or payments), (ii) upon the opt-in to acquire a development and commercialization license(s) (referred to as exercise fees or payments earned, if any, when the development and commercialization license is “taken”), (iii) at the collaborator’s request, after providing other services at negotiated prices, which are generally consistent with what other third parties would charge, or (iv) upon some combination of all of these fees.

The accounting for collaboration and option agreements and right-to-test agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered distinct performance obligations if they provide a collaborator with a material right. Factors that are considered in evaluating whether options convey a material right include the overall objective of the arrangement, the benefit the collaborator might obtain from the agreement without exercising the options, the cost to exercise the options relative to the fair value of the licenses, and the additional financial commitments or economic penalties imposed on the collaborator as a result of exercising the options. As of March 31, 2020, all right-to-test agreements have expired.

If the Company concludes that an option provides the customer a material right, and therefore is a separate performance obligation, the Company then determines the estimated selling prices of the option and all other units of accounting using the following inputs: (a) estimated fair value of each program, (b) the amount the partner would pay to exercise the option to obtain the license, and (c) probability of exercise.

The Company does not control when or if any collaborator will exercise its options for development and commercialization licenses. As a result, the Company cannot predict when or if it will recognize revenues in connection with any of the foregoing.

Upfront payments on development and commercialization licenses may be recognized upon delivery of the license if facts and circumstances dictate that the license has stand-alone functionality and is distinct from the undelivered elements.

In determining whether a collaboration and option agreement is within the scope of ASC 808, Collaborative Arrangements, management evaluates the level of involvement of both companies in the development and commercialization of the products to determine if both parties are active participants and if both parties are exposed to risks and rewards dependent on the commercial success of the licensed products. If the agreement is determined to be within the scope of ASC 808, the Company will segregate the research and development activities and the related cost sharing arrangement. Payments made by the Company for such activities will be recorded as research and development expense and reimbursements received from its partner will be recognized as an offset to research and development expense.

Transaction Price Allocated to Future Performance Obligations

Remaining performance obligations represent the transaction price of contracts for which work has not been performed (or has been partially performed) and includes unexercised contract options that are considered material rights. As of March 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations comprising deferred revenue was $127.5 million. The Company expects to recognize revenue on approximately 39% and 61% of the remaining performance obligations over the next 13 to 60 months and 61 to 120 months, respectively; however, it does not control when or if any collaborator will exercise its options for, or terminate existing development and commercialization licenses.

Contract Balances from Contracts with Customers

The following table presents changes in the Company’s contract assets and contract liabilities during the three months ended March 31, 2020 and 2019 (in thousands):


	Balance at								Balance at
Three months ended March 31, 2020	December 31, 2019		Additions		Deductions		Impact of Netting		March 31, 2020
Contract asset	$	3,631	$	—	$	(3,000)	$	359	$	990
Contract liabilities	$	127,432	$	—	$	(283)	$	361	$	127,510



	Balance at						Balance at
Three months ended March 31, 2019	December 31, 2018		Additions		Deductions		March 31, 2019
Contract asset	$	500	$	—	$	(500)	$	—
Contract liabilities	$	80,802	$	65,287	$	(79)	$	146,010

The Company recognized the following revenues as a result of changes in contract asset and contract liability balances in the respective periods (in thousands):


	Three Months Ended
	March 31,
	2020		2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$	283	$	79
Performance obligations satisfied in previous periods	$	—	$	—

During the quarter ended March 31, 2020, the Company recorded $200,000 as license and milestone fee revenue for delivery of certain materials to CytomX that had been previously deferred, and $83,000 of amortization related to numerous collaborators’ rights to technological improvements. Additionally, a contract asset of $2.7 million, net of a $0.3 million related contract liability, was recorded for a probable milestone in 2019 pursuant to a license agreement with CytomX, which was subsequently achieved and paid during the three months ended March 31, 2020.

A contract asset and related revenue of $500,000 was recorded for a probable milestone in 2018 pursuant to a license agreement with Fusion Pharmaceuticals, which was subsequently achieved and paid during the three months ended March 31, 2019. Also during the three months ended March 31, 2019, $65.2 million was recorded as deferred revenue as a result of a sale of the Company’s residual rights to receive royalty payments on commercial sales of Kadcyla^® (ado-trastuzumab emtansine) as discussed in Note E, and $79,000 of amortization of deferred revenue was recorded related to numerous collaborators’ rights to technological improvements.

The timing of revenue recognition, billings, and cash collections results in billed receivables, contract assets, and contract liabilities on the consolidated balance sheets. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

Financial Instruments and Concentration of Credit Risk

Cash and cash equivalents are primarily maintained with three financial institutions in the U.S. Deposits with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company’s cash equivalents consist of money market funds with underlying investments primarily being U.S. Government-issued securities and high quality, short term commercial paper. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and marketable securities. The Company held no marketable securities as of March 31, 2020 and December 31, 2019. The Company’s investment policy, approved by the Board of Directors, limits the amount it may invest in any one type of investment, thereby reducing credit risk concentrations.

Cash and Cash Equivalents

All highly liquid financial instruments with maturities of three months or less when purchased are considered cash equivalents. As of March 31, 2020 and December 31, 2019, the Company held $247.3 million and $176.2 million, respectively, in cash and money market funds, which were classified as cash and cash equivalents.

Non-cash Investing and Financing Activities

The Company had $250,000 of accrued capital expenditures as of March 31, 2020 which have been treated as a non-cash investing activity and, accordingly, are not reflected in the consolidated statement of cash flows. The Company had no accrued capital expenditures as of December 31, 2019.

Fair Value of Financial Instruments

Fair value is defined under ASC Topic 820, Fair Value Measurements and Disclosures, 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. The standard describes a hierarchy to measure fair value which is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows:

●

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

●

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

●

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

As of March 31, 2020, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2020 (in thousands):

Fair Value Measurements at March 31, 2020 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents

231,280

—

As of December 31, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2019 (in thousands):

Fair Value Measurements at December 31, 2019 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents

163,674

—

The fair value of the Company’s cash equivalents is based on quoted prices from active markets.

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, unbilled revenue, prepaid and other current assets, accounts payable, accrued compensation, and other accrued liabilities approximate fair value due to their short-term nature. The estimated fair value of the convertible 4.5% senior notes (the “Convertible Notes”) approximates the gross carrying value of $2.1 million as of March 31, 2020. The estimated fair value and gross carrying amount was $3.0 million and $2.1 million, respectively, as of December 31, 2019. The fair value of the Convertible Notes is influenced by interest rates, the Company’s stock price and stock price volatility, and by prices observed in trading activity for the Convertible Notes. However, because there have been no trades involving the Convertible Notes since January 2018, the fair value as of March 31, 2020 and December 31, 2019 uses Level 3 inputs.

Unbilled Revenue/Reimbursement

Unbilled revenue/reimbursement substantially represents research funding earned based on actual resources utilized and external expenses incurred under certain of the Company’s collaboration agreements.

Clinical Trial Accruals

Clinical trial expenses are a significant component of research and development expenses, and the Company outsources a significant portion of these costs to third parties. Third party clinical trial expenses include investigator fees, site costs (patient costs), clinical research organization costs, and costs for central laboratory testing and data management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the consolidated balance sheets as prepaid assets or accrued clinical trial costs. These third party agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred. Non-refundable advance clinical payments for goods or services that will be used or rendered for future R&D activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. The Company also records accruals for estimated ongoing clinical research and development costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received, and contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made by the Company. The historical clinical accrual estimates made by the Company have not been materially different from the actual costs.

Leases

Effective January 1, 2019, the Company adopted ASU 2016-2, Leases (Topic 842), the details of which are further discussed in Note H. The Company determines if an arrangement is a lease at inception. Operating leases include right-of-use (“ROU”) assets and operating lease liabilities (current and non-current), which are recorded in the Company’s consolidated balance sheets. Single payment capital leases for equipment that are considered finance leases are included in

property and equipment in the Company’s consolidated balance sheets. As the single payment obligations have all been made, there is no related liability recorded.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable. As a number of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate applicable to the Company based on the information available at the commencement date in determining the present value of lease payments. As the Company has no existing or proposed collateralized borrowing arrangements, to determine a reasonable incremental borrowing rate, the Company considers collateral assumptions, the lease term, the Company’s current credit risk profile, and rates for existing borrowing arrangements for comparable peer companies. The Company accounts for the lease and fixed non-lease components as a single lease component. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

Computation of Net Loss per Common Share

Basic and diluted net loss per share is calculated based upon the weighted average number of common shares outstanding during the period. During periods of income, participating securities are allocated a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two-class method”). Shares of the Company’s restricted stock participate in any dividends that may be declared by the Company and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to participating securities since they have no contractual obligation to share in the losses of the Company. Diluted (loss) income per share is computed after giving consideration to the dilutive effect of stock options, convertible notes, and restricted stock that are outstanding during the period, except where such non-participating securities would be anti-dilutive.

The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method for the options and unvested restricted stock and the if-converted method for the Convertible Notes, are shown in the following table (in thousands):


	Three Months Ended
	March 31,
	2020	2019
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period	19,021	21,528
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock	1,428	1,559
Shares issuable upon conversion of convertible notes at end of period	501	501
Common stock equivalents under if-converted method for convertible notes	501	501

The Company’s common stock equivalents have not been included in the net loss per share calculation because their effect is anti-dilutive due to the Company’s net loss position.

Stock-Based Compensation

As of March 31, 2020, the Company was authorized to grant future awards under three employee share-based compensation plans, which are the ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, as amended (the 2018 Plan), the Employee Stock Purchase Plan (ESPP), and the ImmunoGen Inducement Equity Incentive Plan, as amended (the Inducement Plan). At the annual meeting of shareholders on June 20, 2018, the 2018 Plan was approved and provides for the issuance of Stock Grants, the grant of Options, and the grant of Stock-Based Awards for up to 7,500,000 shares of the Company’s common stock, as well as up to 19,500,000 shares of common stock which represent awards granted under the previous stock option plans, the ImmunoGen, Inc. 2016 and 2006 Employee, Director and Consultant Equity Incentive Plans, that forfeit, expire, or cancel without delivery of shares of common stock or which resulted in the forfeiture of shares of common stock back to the Company subsequent to June 19, 2018. The Inducement Plan was approved the by Board of Directors in December 2019 to provide for the issuance of non-qualified option grants

for up to 1,500,000 shares of the Company’s common stock. The Inducement Plan was amended in January 2020 and again in April 2020 to reduce the total number of shares reserved for issuance under the plan to 850,000 shares. Options awarded under the two plans are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Options vest at various periods of up to four years and may be exercised within ten years of the date of grant.

The stock-based awards are accounted for under ASC Topic 718, Compensation-Stock Compensation. Pursuant to Topic 718, the estimated grant date fair value of awards is charged to the statement of operations and comprehensive loss over the requisite service period, which is the vesting period. Such amounts have been reduced by an estimate of forfeitures of all unvested awards. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model with the weighted average assumptions noted in the following table. As the Company has not paid dividends since inception, nor does it expect to pay any dividends for the foreseeable future, the expected dividend yield assumption is zero. Expected volatility is based exclusively on historical volatility of the Company’s stock. The expected term of stock options granted is based exclusively on historical data and represents the period of time that stock options granted are expected to be outstanding. The expected term is calculated for and applied to one group of stock options as the Company does not expect substantially different exercise or post-vesting termination behavior among its option recipients. The risk-free rate of the stock options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the stock options.


	Three Months Ended March 31,
	2020	2019
Dividend	None	None
Volatility	84.20%	73.57%
Risk-free interest rate	1.45%	2.47%
Expected life (years)	6.0	6.0

Using the Black-Scholes option-pricing model, the weighted average grant date fair values of options granted during the three months ended March 31, 2020 and 2019 were $3.23 and $3.46 per share, respectively.

A summary of option activity under the Company’s equity plans as of March 31, 2020, and changes during the three month period then ended is presented below (in thousands, except weighted-average data):


		Weighted-
	Number	Average
	of Stock	Exercise
	Options	Price
Outstanding at December 31, 2019	13,518	$	7.53
Granted	5,740		4.55
Exercised	(86)		2.81
Forfeited/Canceled	(625)		8.45
Outstanding at March 31, 2020	18,547	$	6.60

In September 2018, the Company granted 295,200 performance stock options to certain employees that will vest in two equal installments upon the achievement of specified performance goals. At March 31, 2020, 139,100 of these options are still outstanding. In the quarter ended March 31, 2020, the Company issued 2.4 million additional performance stock options that will vest in four installments upon the achievement of specified performance goals. The Company determined it is not currently probable that these performance goals will be achieved and, therefore, no expense has been recorded to date. The fair value of the performance-based options that could be expensed in future periods, net of estimated forfeitures, is $12.0 million.

A summary of restricted stock and restricted stock unit activity, inclusive of performance-based restricted stock awards, under the Company’s equity plans as of March 31, 2020 and changes during the three-month period ended March 31, 2020 is presented below (in thousands):


	Number of	Weighted-
	Restricted	Average Grant
	Stock Shares	Date Fair Value
Unvested at December 31, 2019	1,297	$	2.97
Vested	(337)		2.47
Forfeited	(487)		3.62
Unvested at March 31, 2020	473		2.68

In 2016, 2017, and 2019, the Company granted shares of performance-based restricted common stock to certain employees of the Company. All but 57,400 of these granted shares have since been forfeited. The restrictions on these shares will lapse in three equal installments upon the achievement of specified performance goals. The Company determined it is not currently probable that these performance goals will be achieved and, therefore, no expense has been recorded to date. The fair value of the performance-based shares that could be expensed in future periods, net of estimated forfeitures, is $142,000.

During the three months ended March 31, 2020, holders of options issued under the Company’s equity plans exercised their rights to acquire an aggregate of approximately 86,000 shares of common stock at prices ranging from $2.47 to $4.00 per share. The total proceeds to the Company from these option exercises were $240,000.

In June 2018, the Company's Board of Directors, with shareholder approval, adopted the Employee Stock Purchase Plan, or ESPP. An aggregate of 1,000,000 shares of common stock have been reserved for issuance under the ESPP. No shares were issued to participating employees during the three months ended March 31, 2020 or 2019. The fair value of each ESPP award is estimated on the first day of the offering period using the Black-Scholes option-pricing model. The Company recognizes share-based compensation expense equal to the fair value of the ESPP awards on a straight-line basis over the offering period.

Stock compensation expense related to stock options and restricted stock awards granted under the stock plans and related to the ESPP was $3.1 million during the three months ended March 31, 2020, compared to stock compensation expense of $5.0 million for the three months ended March 31, 2019, respectively. The decrease in expense is primarily due to a lower fair value of awards vesting in the current period compared to the prior year period as a result of the restructuring last year and a decline in the Company’s stock price. Stock compensation expense related to the ESPP was $78,000 and $197,000 for the three months ended March 31, 2020 and 2019. As of March 31, 2020, the estimated fair value of unvested employee awards, exclusive of performance awards, was $24.3 million, net of estimated forfeitures. The weighted-average remaining vesting period for these awards is approximately three years.

Segment Information

During the three months ended March 31, 2020, the Company continued to operate in one operating segment, which is the business of development of monoclonal antibody-based anticancer therapeutics.

During the three months ended March 31, 2020 and 2019, 98% and 99% of revenues, respectively, were from Roche, consisting of non-cash royalty revenue. There were no other customers of the Company with significant revenues in the three months ended March 31, 2020 and 2019.

Recently Adopted Accounting Pronouncements

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. In addition, ASU 2018-18 adds unit-of-account guidance to ASC Topic 808, Collaborative Arrangements, in order to align this guidance with ASC 606 and also precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. The Company adopted the standard on January 1, 2020, and it did not have a material effect on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions, and forecasts. The ASU is effective for interim and annual periods beginning after December 15, 2019. Adoption of the ASU is on a modified retrospective basis. The Company adopted the standard on January 1, 2020, and it did not have a material effect on the Company’s consolidated financial statements.

No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.

Agreements

3 Months Ended

Mar. 31, 2020

Agreements

Agreements

C.Agreements

Significant Collaborative Agreements

Roche

In May 2000, the Company granted Genentech, now a member of the Roche Group, an exclusive license to use the Company’s maytansinoid ADC technology. Pursuant to this agreement, Roche developed and received marketing approval for its HER2-targeting ADC compound, Kadcyla, in the U.S., Europe, Japan, and numerous other countries. The Company receives royalty reports and royalty payments related to sales of Kadcyla from Roche one quarter in arrears. In accordance with the Company’s revenue recognition policy, $13.0 million and $8.5 million of non-cash royalties on net sales of Kadcyla were recorded and included in non-cash royalty revenue for the three months ended March 31, 2020 and 2019, respectively. Kadcyla sales occurring after January 1, 2015 were covered by a royalty purchase agreement whereby the associated cash, except for a residual tail, was remitted to Immunity Royalty Holdings, L.P, or IRH. In January 2019, the Company sold its residual tail to OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada, for a net payment of $65.2 million, as discussed further in Note E. Simultaneously, OMERS purchased IRH’s right to the royalties the Company previously sold as described above, therefore obtaining the rights to 100% of the royalties received from that date on.

CytomX

In 2016, the Company granted CytomX an exclusive development and commercialization license to the Company’s maytansinoid ADC technology for use with Probodies™ that target CD166 under a now expired reciprocal right-to-test agreement. Pursuant to the license agreement, the Company is entitled to receive up to a total of $160.0 million in milestone payments plus royalties on the commercial sales of any resulting product. The total milestones are categorized as follows: development milestones—$10.0 million; regulatory milestones—$50.0 million; and sales milestones—$100.0 million. In December 2019, a development milestone related to dosing of a first patient in a Phase 2 clinical trial became probable of being attained, which resulted in $3.0 million of license and milestone fee revenue being recorded in 2019. In February 2020, CytomX enrolled its first patient in the aforementioned Phase 2 clinical trial, and subsequently remitted the $3.0 million milestone payment to the Company in March 2020. CytomX is responsible for the manufacturing, development, and marketing of any products resulting from the development and commercialization license taken by CytomX under this collaboration.

For additional information related to this agreement, as well as the Company’s other significant collaborative agreements, please read Note C, Agreements, to the consolidated financial statements included within the Company’s 2019 Annual Report on Form 10-K filed with the SEC on March 11, 2020.

Convertible 4.5% Senior Notes

3 Months Ended

Mar. 31, 2020

Convertible 4.5% Senior Notes

Convertible 4.5% Senior Notes

D.Convertible 4.5% Senior Notes

In 2016, the Company issued Convertible Notes with an aggregate principal amount of $100 million, of which $2.1 million remains outstanding as of March 31, 2020. The Convertible Notes are governed by the terms of an indenture between the Company, as issuer, and Wilmington Trust, National Association, as the trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 4.5% per year, payable semi-annually in arrears on January 1 and July 1 of each year, commencing on January 1, 2017. The Company recorded $24,000 of interest expense in each of the three months ended March 31, 2020 and 2019, respectively. The Convertible Notes will mature on July 1, 2021, unless earlier repurchased or converted. Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding the stated maturity date. Upon conversion, the Company will deliver for each $1,000 principal amount of converted notes a number of shares equal to the conversion rate, which will initially be 238.7775 shares of common stock, equivalent to an initial conversion price of approximately $4.19. The conversion rate will be subject to adjustment in some circumstances, but will not be adjusted for any accrued and unpaid interest.

Liability Related to Sale of Future Royalties

3 Months Ended

Mar. 31, 2020

E.	Liability Related to Sale of Future Royalties

In 2015, IRH purchased the right to receive 100% of the royalty payments on commercial sales of Kadcyla subsequent to December 31, 2014, arising under the Company’s development and commercialization license with Genentech, until IRH had received aggregate royalties equal to $235 million or $260 million, depending on when the aggregate royalties received by IRH reach a specified milestone. Once the applicable threshold was met, if ever, the Company would thereafter have received 85% and IRH would have received 15% of the Kadcyla royalties for the remaining royalty term. At consummation of the transaction, the Company received cash proceeds of $200 million. As part of this sale, the Company incurred $5.9 million of transaction costs, which are presented net of the liability in the accompanying consolidated balance sheet and are being amortized to interest expense over the estimated life of the royalty purchase agreement. Although the Company sold its rights to receive royalties from the sales of Kadcyla, as a result of its then ongoing involvement in the cash flows related to these royalties, the Company continues to account for these royalties as revenue and recorded the $200 million in proceeds from this transaction as a liability related to sale of future royalties (Royalty Obligation) that will be amortized using the interest method over the estimated life of the royalty purchase agreement.

In January 2019, the Company sold its residual rights to receive royalty payments on commercial sales of Kadcyla to OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada, for a net payment of $65.2 million (amount is net of $1.5 million in contingent broker fees). Simultaneously, OMERS purchased IRH’s right to the royalties the Company previously sold as described above, therefore obtaining the rights to 100% of the royalties received from that date on. Because the Company will not be involved with the cash flows related to the residual royalties, the $65.2 million of net proceeds received from the sale of its residual rights to receive royalty payments was recorded as long-term deferred revenue and will be amortized as the cash related to the residual rights is received using the units of revenue approach. During the three months ended March 31, 2020, the Company did not receive any royalties related to the residual rights, therefore, no revenue from this sale was recognized. Additionally, the purchase of IRH’s interest by OMERS did not result in an extinguishment or modification of the original instrument and, accordingly, the Company will continue to account for the remaining obligation as a liability as outlined above.

The following table shows the activity within the liability account during the three-month period ended March 31, 2020 (in thousands):



	Three Months Ended
	March 31, 2020
Liability related to sale of future royalties, net — beginning balance	$	123,541
Kadcyla royalty payments received and paid		(15,137)
Non-cash interest expense recognized		5,699
Liability related to sale of future royalties, net — ending balance	$	114,103

As royalties are remitted to IRH and subsequently OMERS, the balance of the Royalty Obligation will be effectively repaid over the life of the agreement. In order to determine the amortization of the Royalty Obligation, the Company is required to estimate the total amount of future royalty payments to be received and remitted as noted above over the life of the underlying license agreement with Genentech covering Kadcyla. The sum of these amounts less the $200 million proceeds the Company received will be recorded as interest expense over the life of the Royalty Obligation. Since inception, the Company’s estimate of this total interest expense results in an effective annual interest rate of 10.1%, and a current effective interest rate of 17.7% as of March 31, 2020. The Company periodically assesses the estimated royalty payments to IRH/OMERS and to the extent such payments are greater or less than its initial estimates, or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the Royalty Obligation. There are a number of factors that could materially affect the amount and timing of royalty payments from Genentech, most of which are not within the Company’s control. Such factors include, but are not limited to, changing standards of care, the introduction of competing products, manufacturing or other delays, biosimilar competition, patent protection, adverse events that result in governmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates as the royalties are paid in U.S. dollars (USD) while significant portions of the underlying sales of Kadcyla are made in currencies other than USD, and other events or circumstances that could result in reduced royalty payments from Kadcyla, all of which would result in a reduction of non-cash royalty revenues and the non-cash interest expense over the life of the Royalty Obligation.

Conversely, if sales of Kadcyla are more than expected, the non-cash royalty revenues and the non-cash interest expense recorded by the Company would be greater over the term of the Royalty Obligation.

In addition, the royalty purchase agreement grants IRH/OMERS the right to receive certain reports and other information relating to the royalties and contains other representations and warranties, covenants, and indemnification obligations that are customary for a transaction of this nature.

Capital Stock

3 Months Ended

Mar. 31, 2020

Capital Stock

Capital Stock

F.	Capital Stock

Compensation Policy for Non-Employee Directors

Pursuant to the Compensation Policy for Non-Employee Directors, Non-Employee Directors are granted deferred share units for their annual retainers which vest quarterly over approximately one year from the date of grant, contingent upon the individual remaining a director of ImmunoGen as of each vesting date. The number of deferred share units awarded is fixed per the plan on the date of the award. All unvested deferred share units will automatically vest immediately prior to the occurrence of a change of control. The redemption amount of deferred share units issued will be paid in shares of common stock of the Company on the date a director ceases to be a member of the Board.

In addition to the deferred share units, the Non-Employee Directors are also entitled to receive a fixed number of stock options on the date of the annual meeting of shareholders. These options vest quarterly over approximately one year from the date of grant. Any new directors will receive a pro-rated award, depending on their date of election to the Board. The directors received a total of 108,000 and 128,000 options in June 2019 and 2018, respectively, and the related compensation expense for the three months ended March 31, 2020 and 2019 is included in the amounts discussed in the “Stock-Based Compensation” section of Note B above.

Restructuring Charges

3 Months Ended

Mar. 31, 2020

Restructuring Charge.

Restructuring Charges

G.Restructuring Charge

2019 Corporate Restructuring

On June 26, 2019, the Board of Directors approved a plan to restructure the business to focus resources on continued development of mirvetuximab soravtansine and a select portfolio of three earlier-stage product candidates, resulting in a significant reduction of the Company’s workforce, with a majority of these employees separating from the business by mid-July 2019 and most of the remaining affected employees transitioning over varying periods of time of up to 12 months. Communication of the plan to the affected employees was substantially completed on June 27, 2019.

As a result of the workforce reduction, during the three months ended June 30, 2019, the Company recorded a $16.0 million charge for severance related to a pre-existing plan in accordance with ASC 712, Compensation-Nonretirement Postemployment Benefits, as such amounts were probable and reasonably estimable. The estimate was later reduced during 2019 to $15.4 million due to minor adjustments to the plan. The related cash payments will be substantially paid out by June 30, 2020. In addition, an anticipated charge of $4.0 million is expected to be incurred for incremental retention benefits over the same time period, of which $2.1 million was recorded during the year ended December 31, 2019 and $0.8 million was recorded during the three months ended March 31, 2020.

A summary of activity against the corporate restructuring charge related to the employee terminations in 2019 is as follows:


	Employee
	Termination
	Benefits Costs
Balance at December 31, 2019	$	4,087
Additional charges/adjustments during the period		41
Payments during the period		(1,347)
Balance at March 31, 2020	$	2,781

In addition to the termination benefits and other related charges, the Company is seeking to sub-lease the majority of the laboratory and office space at 830 Winter Street in Waltham, Massachusetts. The financial impact of these efforts is dependent on the length of time it takes to find tenants and the terms of the sub-leases. The decision to vacate part of its corporate office resulted in a change in asset groupings and also represented an impairment indicator. The

Company determined and continues to believe that the right-of-use asset and leasehold improvements are recoverable based on expected sub-lease income, and therefore, no impairment has been recorded.

Charge Related to Unoccupied Office Space

The Company has sought to sub-lease 10,281 square feet of unoccupied office space at 930 Winter Street in Waltham, Massachusetts that was leased in 2016. During the three months ended March 31, 2019, the Company recorded a $559,000 impairment charge related to this lease, which represented the remaining balance of the right to use asset as the likelihood of finding a sub-lessor had diminished significantly as the lease approached termination.

Leases

3 Months Ended

Mar. 31, 2020

Leases

Leases

H.	Leases

The Company currently has two real estate leases. The first is an agreement with CRP/King 830 Winter L.L.C. for the rental of approximately 120,000 square feet of laboratory and office space at 830 Winter Street, Waltham, MA through March 2026. The Company uses this space for its corporate headquarters and other operations. The Company may extend the lease for two additional terms of five years and is required to pay certain operating expenses for the leased premises subject to escalation charges for certain expense increases over a base amount. The Company is actively seeking to sub-lease approximately 80,000 square feet of this space and, during the three months ended March 31, 2020, executed two subleases for approximately 33,000 square feet through the remaining initial term of the lease. The second real estate lease is an agreement with PDM 930 Unit, LLC for the rental of 10,281 square feet of additional office space at 930 Winter Street, Waltham, MA through August 31, 2021. The Company is required to pay certain operating expenses for the leased premises based on its pro-rata share of such expenses for the entire rentable space of the building. The Company is actively seeking to sub-lease this space.

Upon adoption of ASC 842 in January 2019, a ROU asset of $17.6 million and a lease liability of $27.3 million were recorded and are identified separately in the Company’s consolidated balance sheets for the existing operating leases. There was no impact to the consolidated statements of operations. Upon adoption, the amount of the ROU assets recorded was offset by the applicable unamortized lease incentive and straight-line lease liability balances of $9.7 million and, therefore, there was no impact to accumulated deficit. There were no initial direct costs related to the leases to consider. The Company’s operating lease liabilities related to its real estate lease agreements were calculated using a collateralized incremental borrowing rate. The weighted average discount rate for the operating lease liability is approximately 11%. A 100 basis point change in the incremental borrowing rate would result in less than a $1 million impact to the ROU assets and liabilities recorded. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term, which for the three months ended March 31, 2020 and 2019 was $1.0 million and $1.1 million, respectively, and is included in operating expenses in the consolidated statement of operations. During the three months ended March 31, 2019, the Company recorded $559,000 of impairment charges related to its 930 Winter Street lease, which represented the remaining balance of the ROU asset as the likelihood of finding a sub-lessor had diminished significantly as the lease approached termination. Cash paid against operating lease liabilities during the three months ended March 31, 2020 and 2019 was $1.4 million and $1.3 million, respectively. As of March 31, 2020, the Company’s ROU asset and lease liability for operating leases totaled $15.2 million and $24.1 million, respectively, and the weighted average remaining term of the operating leases is approximately six years.

The maturities of operating lease liabilities discussed above are as follows (in thousands):


2020 (nine months remaining)	$	4,125
2021		5,323
2022		5,389
2023		5,510
2024		5,470
Thereafter		6,866
Total lease payments		32,683
Less imputed interest		(8,616)
Total lease liabilities	$	24,067

In addition to the amounts in the table above, the Company is also responsible for variable operating costs and real estate taxes that are expected to approximate $3.1 million per year through March 2026.

Sublease Income

In January, March, and April 2020, the Company executed three agreements to sublease a total of 47,160 square feet of the Company’s leased space at 830 Winter Street, Waltham, MA through March 2026. Two of the three sublease agreements include an early termination option after certain periods of time for an agreed-upon fee. Assuming no early termination option is exercised, the Company will receive approximately $13 million in minimum rental payments over the remaining term of the sublease, which is not included in the operating lease liability table above. The sublessees will also be responsible for their proportionate share of variable operating expenses and real estate taxes.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

I. Commitments and Contingencies

Manufacturing Commitments

In 2018, the Company executed a commercial agreement with one of its manufacturers for the future production of antibody through calendar 2025. In May 2019, the agreement was amended to reduce the number of committed antibody batches for an agreed-upon exit fee, which was recorded as research and development expense in the first quarter of 2019. After further negotiations, the Company’s noncancelable commitment for future production is approximately €9 million at March 31, 2020.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

Subsequent Events

Subsequent Events

Revenue Recognition

Revenue Recognition

The Company enters into licensing and development agreements with collaborators for the development of

At March 31, 2020, the Company had the following types of material agreements with the parties identified below:

●

Bayer (one exclusive single-target license)

Biotest (one exclusive single-target license)

CytomX (two exclusive single-target licenses)

Debiopharm (one exclusive single-compound license)

Fusion Pharmaceuticals (one exclusive single-target license)

Novartis (five exclusive single-target licenses)

Oxford BioTherapeutics/Menarini (one exclusive single target license sublicensed from Amgen)

Roche, through its Genentech unit (five exclusive single-target licenses)

Sanofi (five fully-paid, exclusive single-target licenses)

Takeda, through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. (one exclusive single-target license)

●

Collaboration and option agreement for a defined period of time to secure a license to develop and commercialize a specified anticancer compound on established terms:

Jazz Pharmaceuticals

●

Collaboration and license agreement to co-develop and co-commercialize a specified anticancer compound on established terms:

MacroGenics

There are no performance, cancellation, termination, or refund provisions in any of the arrangements that contain material financial consequences to the Company.

Development and Commercialization Licenses

The Company recognizes revenue related to the rights to future technological improvements over the estimated term of the applicable license.

Collaboration and Option Agreements/Right-to-Test Agreements

Transaction Price Allocated to Future Performance Obligations

Contract Balances from Contracts with Customers

The following table presents changes in the Company’s contract assets and contract liabilities during the three months ended March 31, 2020 and 2019 (in thousands):


	Balance at								Balance at
Three months ended March 31, 2020	December 31, 2019		Additions		Deductions		Impact of Netting		March 31, 2020
Contract asset	$	3,631	$	—	$	(3,000)	$	359	$	990
Contract liabilities	$	127,432	$	—	$	(283)	$	361	$	127,510



	Balance at						Balance at
Three months ended March 31, 2019	December 31, 2018		Additions		Deductions		March 31, 2019
Contract asset	$	500	$	—	$	(500)	$	—
Contract liabilities	$	80,802	$	65,287	$	(79)	$	146,010

The Company recognized the following revenues as a result of changes in contract asset and contract liability balances in the respective periods (in thousands):


	Three Months Ended
	March 31,
	2020		2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$	283	$	79
Performance obligations satisfied in previous periods	$	—	$	—

Financial Instruments and Concentration of Credit Risk

Financial Instruments and Concentration of Credit Risk

Cash and Cash Equivalents

Cash and Cash Equivalents

Non-cash Investing Activities

Non-cash Investing and Financing Activities

Fair Value of Financial Instruments

Fair Value of Financial Instruments

●

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

●

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

Fair Value Measurements at March 31, 2020 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents

231,280

—

Fair Value Measurements at December 31, 2019 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents

163,674

—

The fair value of the Company’s cash equivalents is based on quoted prices from active markets.

Unbilled Revenue/Reimbursement

Unbilled Revenue/Reimbursement

Clinical Trial Accruals

Clinical Trial Accruals

Leases

Leases

property and equipment in the Company’s consolidated balance sheets. As the single payment obligations have all been made, there is no related liability recorded.

Computation of Net Loss per Common Share

Computation of Net Loss per Common Share


	Three Months Ended
	March 31,
	2020	2019
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period	19,021	21,528
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock	1,428	1,559
Shares issuable upon conversion of convertible notes at end of period	501	501
Common stock equivalents under if-converted method for convertible notes	501	501

The Company’s common stock equivalents have not been included in the net loss per share calculation because their effect is anti-dilutive due to the Company’s net loss position.

Stock-Based Compensation

Stock-Based Compensation


	Three Months Ended March 31,
	2020	2019
Dividend	None	None
Volatility	84.20%	73.57%
Risk-free interest rate	1.45%	2.47%
Expected life (years)	6.0	6.0


		Weighted-
	Number	Average
	of Stock	Exercise
	Options	Price
Outstanding at December 31, 2019	13,518	$	7.53
Granted	5,740		4.55
Exercised	(86)		2.81
Forfeited/Canceled	(625)		8.45
Outstanding at March 31, 2020	18,547	$	6.60


	Number of	Weighted-
	Restricted	Average Grant
	Stock Shares	Date Fair Value
Unvested at December 31, 2019	1,297	$	2.97
Vested	(337)		2.47
Forfeited	(487)		3.62
Unvested at March 31, 2020	473		2.68

Segment Information

Segment Information

During the three months ended March 31, 2020, the Company continued to operate in one operating segment, which is the business of development of monoclonal antibody-based anticancer therapeutics.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Summary of Significant Accounting Policies

Contract assets and contract liabilities

The following table presents changes in the Company’s contract assets and contract liabilities during the three months ended March 31, 2020 and 2019 (in thousands):


	Balance at								Balance at
Three months ended March 31, 2020	December 31, 2019		Additions		Deductions		Impact of Netting		March 31, 2020
Contract asset	$	3,631	$	—	$	(3,000)	$	359	$	990
Contract liabilities	$	127,432	$	—	$	(283)	$	361	$	127,510



	Balance at						Balance at
Three months ended March 31, 2019	December 31, 2018		Additions		Deductions		March 31, 2019
Contract asset	$	500	$	—	$	(500)	$	—
Contract liabilities	$	80,802	$	65,287	$	(79)	$	146,010

The Company recognized the following revenues as a result of changes in contract asset and contract liability balances in the respective periods (in thousands):


	Three Months Ended
	March 31,
	2020		2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$	283	$	79
Performance obligations satisfied in previous periods	$	—	$	—

Schedule of assets that are required to be measured at fair value on a recurring basis

Fair Value Measurements at March 31, 2020 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents

231,280

—

Fair Value Measurements at December 31, 2019 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents

163,674

—

Schedule of common stock equivalents, as calculated in accordance with the treasury-stock method


	Three Months Ended
	March 31,
	2020	2019
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period	19,021	21,528
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock	1,428	1,559
Shares issuable upon conversion of convertible notes at end of period	501	501
Common stock equivalents under if-converted method for convertible notes	501	501

Schedule of assumptions


	Three Months Ended March 31,
	2020	2019
Dividend	None	None
Volatility	84.20%	73.57%
Risk-free interest rate	1.45%	2.47%
Expected life (years)	6.0	6.0

Summary of stock option activity


		Weighted-
	Number	Average
	of Stock	Exercise
	Options	Price
Outstanding at December 31, 2019	13,518	$	7.53
Granted	5,740		4.55
Exercised	(86)		2.81
Forfeited/Canceled	(625)		8.45
Outstanding at March 31, 2020	18,547	$	6.60

Summary of restricted stock activity


	Number of	Weighted-
	Restricted	Average Grant
	Stock Shares	Date Fair Value
Unvested at December 31, 2019	1,297	$	2.97
Vested	(337)		2.47
Forfeited	(487)		3.62
Unvested at March 31, 2020	473		2.68

Liability Related to Sale of Future Royalties (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of Liability account during the period from the inception of the royalty transaction

The following table shows the activity within the liability account during the three-month period ended March 31, 2020 (in thousands):



	Three Months Ended
	March 31, 2020
Liability related to sale of future royalties, net — beginning balance	$	123,541
Kadcyla royalty payments received and paid		(15,137)
Non-cash interest expense recognized		5,699
Liability related to sale of future royalties, net — ending balance	$	114,103

Restructuring Charges (Tables)

3 Months Ended

Mar. 31, 2020

Restructuring Charge.

Schedule activity against the restructuring charge related to the employee terminations

A summary of activity against the corporate restructuring charge related to the employee terminations in 2019 is as follows:


	Employee
	Termination
	Benefits Costs
Balance at December 31, 2019	$	4,087
Additional charges/adjustments during the period		41
Payments during the period		(1,347)
Balance at March 31, 2020	$	2,781

Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases

Schedule of maturities of operating lease liabilities

The maturities of operating lease liabilities discussed above are as follows (in thousands):


2020 (nine months remaining)	$	4,125
2021		5,323
2022		5,389
2023		5,510
2024		5,470
Thereafter		6,866
Total lease payments		32,683
Less imputed interest		(8,616)
Total lease liabilities	$	24,067

Nature of Business and Plan of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Net loss	$ (29,088)	$ (43,751)
Accumulated deficit	(1,316,556)		$ (1,287,468)
Total revenues	13,287	8,584
Cash and cash equivalents	247,299	$ 270,396	$ 176,225	$ 262,252
Net proceeds generated from public offering	$ 97,744
Number of months Capital resources meets capital expenditures	12 months
Product
Total revenues	$ 0

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/exampleRef
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-Section 55
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 32
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-URI http://asc.fasb.org/extlink&oid=116874947&loc=SL4591552-111686

+ Details

Summary of Significant Accounting Policies - Revenue Recognition (Details)	3 Months Ended
	Mar. 31, 2020 item
Minimum
Summary of Significant Accounting Policies
Period to earn royalty payments	10 years
Maximum
Summary of Significant Accounting Policies
Period to earn royalty payments	12 years
Oxford BioTherapeutics Ltd Member
Summary of Significant Accounting Policies
Number of single-target licenses	1
Bayer
Summary of Significant Accounting Policies
Number of single-target licenses	1
Biotest
Summary of Significant Accounting Policies
Number of single-target licenses	1
CytomX
Summary of Significant Accounting Policies
Number of single-target licenses	2
Fusion Pharmaceuticals
Summary of Significant Accounting Policies
Number of single-compound licenses	1
Novartis
Summary of Significant Accounting Policies
Number of single-target licenses	5
Roche
Summary of Significant Accounting Policies
Number of single-target licenses	5
Sanofi
Summary of Significant Accounting Policies
Number of single-target licenses	5
Takeda
Summary of Significant Accounting Policies
Number of single-target licenses	1
Debiopharm
Summary of Significant Accounting Policies
Number of single-compound licenses	1

Summary of Significant Accounting Policies - Performance Obligations (Details) $ in Millions	Mar. 31, 2020 USD ($)
Summary of Significant Accounting Policies
Revenue, Remaining Performance Obligation	$ 127.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Summary of Significant Accounting Policies
Remaining performance obligations, percent	39.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01
Summary of Significant Accounting Policies
Remaining performance obligations, percent	61.00%
Minimum \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	13 months
Minimum \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	61 months
Maximum \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	60 months
Maximum \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	120 months

Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Changes in the Company's contract assets and contract liabilities
Contract asset, Beginning balance	$ 3,631	$ 500
Contract asset, Additions		0
Contract asset, Deductions	3,000	500
Contract Asset, Impact Of Netting.	359
Contract asset, Ending balance	990
Contract liabilities:
Contract liabilities, Beginning balance	127,432	80,802
Contract liabilities, Additions		65,287
Contract liabilities, Deductions	(283)	(79)
Contract Liabilities, Impact Of Netting	361
Contract liabilities, Ending balance	$ 127,510	$ 146,010

Summary of Significant Accounting Policies - Revenues Recognized as a Result of Changes in Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$ 283	$ 79
Performance obligations satisfied in previous periods

Summary of Significant Accounting Policies - Contract Balances from Contracts with Customers - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Revenue recognized in the period from:
Revenue from contract with customer	$ 13,287,000	$ 8,584,000
Deferred revenue	127,510,000	146,010,000	$ 127,432,000	$ 80,802,000
Contract asset	990,000		3,631,000	$ 500,000
Contract liability	123,000		309,000
Contract Liabilities, Impact Of Netting	361,000
Revenue previously deferred	283,000	79,000
Milestone earned, included in accounts receivable	3,000,000	500,000
Probable milestone earned and paid		0
Milestone related
Revenue recognized in the period from:
Revenue from contract with customer	500,000
License and milestone fees
Revenue recognized in the period from:
Revenue from contract with customer	283,000	79,000
CytomX \| License and milestone fees
Revenue recognized in the period from:
Revenue from contract with customer	200,000
CytomX \| Probable Milestone
Revenue recognized in the period from:
Contract asset			2,700,000
Contract liability			$ 300,000
Kadcyla \| Royalty revenue
Revenue recognized in the period from:
Deferred revenue	65,200,000
Other Collaborators \| Technological Improvements
Revenue recognized in the period from:
Amortization of deferred revenue	$ 83,000	$ 79,000

Summary of Significant Accounting Policies - Financial Instruments and Concentration of Credit Risk (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)
Financial Instruments and Concentration of Credit Risk
Number of financial institutions in the U.S. in which cash and cash equivalents are primarily maintained \| item	3
Marketable securities held by entity \| $	$ 0	$ 0

Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 247,299	$ 176,225	$ 270,396	$ 262,252

Summary of Significant Accounting Policies - Non-cash Investing and Financing Activities (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Accrued capital expenditures	$ 250,000	$ 0

Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2017	Dec. 31, 2016 USD ($)
Fair value hierarchy for the Company's financial assets measured at fair value
Interest rate (as a percent)	4.50%	4.50%
Number of trades \| item	0
Convertible Notes
Fair value hierarchy for the Company's financial assets measured at fair value
Interest rate (as a percent)	4.50%		4.50%
Principal amount of debt for conversion calculations				$ 1,000
Significant Other Observable Inputs (Level 2) \| Convertible Notes \| Face Value
Fair value hierarchy for the Company's financial assets measured at fair value
Convertible debt fair value	$ 2,100,000	$ 2,100,000
Significant Other Observable Inputs (Level 2) \| Convertible Notes \| Estimated fair value
Fair value hierarchy for the Company's financial assets measured at fair value
Convertible debt fair value		3,000,000.0
Recurring basis
Fair value hierarchy for the Company's financial assets measured at fair value
Cash equivalents	231,280,000	163,674,000
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value hierarchy for the Company's financial assets measured at fair value
Cash equivalents	231,280,000	163,674,000
Recurring basis \| Significant Other Observable Inputs (Level 2)
Fair value hierarchy for the Company's financial assets measured at fair value
Cash equivalents	0	0
Recurring basis \| Significant Unobservable Inputs (Level 3)
Fair value hierarchy for the Company's financial assets measured at fair value
Cash equivalents	$ 0	$ 0

Summary of Significant Accounting Policies - Leases (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Commitments and Contingencies
Obligations under finance leases	$ 0

Summary of Significant Accounting Policies - Computation of Net Loss per Common Share (Details) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) shares	Mar. 31, 2019 USD ($) shares
Computation of Net Loss per Common Share
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock at end of period	19,021	21,528
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock	1,428	1,559
Shares issuable upon conversion of convertible notes at end of period (in shares) \| $	501	501
Common stock equivalents under if-converted method for convertible notes (in shares)	501	501

Summary of Significant Accounting Policies - Stock-Based Compensation (Details)	1 Months Ended	3 Months Ended				12 Months Ended
	Sep. 30, 2018 installment shares	Mar. 31, 2020 USD ($) plan installment $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) item $ / shares shares	Dec. 31, 2017 item shares	Dec. 31, 2016 item shares	Jan. 31, 2020 shares	Jun. 30, 2018 shares
Stock-Based Compensation
Number of employee share-based compensation plans \| plan		3
Number of Stock Options
Exercised (in shares)		(86,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Proceeds from Stock Options Exercised \| $		$ 240,000			$ 68,000
Directors' deferred share unit compensation \| $			$ 46,000	$ 100,000	$ 100,000	$ 91,000
ESPP
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Aggregate number of common shares reserved for future issuance										1,000,000
Estimated subscriptions outstanding		0			0
Allocated Share-based Compensation Expense \| $		$ 78,000				$ 197,000
Stock options and restricted stock awards
Stock-Based Compensation
Vesting period		3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Allocated Share-based Compensation Expense \| $		$ 3,100,000			$ 5,000,000.0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized \| $		$ 24,300,000
Stock options
Weighted-average assumptions used to estimate the fair value of each stock option
Dividend (as a percent)		0.00%			0.00%
Volatility (as a percent)		84.20%			73.57%
Risk-free interest rate (as a percent)		1.45%			2.47%
Expected life		6 years			6 years
Weighted-average grant date fair value (in dollars per share) \| $ / shares		$ 3.23			$ 3.46
Number of Stock Options
Granted (in shares)		5,740,000
Exercised (in shares)		(86,000)
Forfeited/Canceled (in shares)		(625,000)
Outstanding at the end of the period (in shares)		18,547,000	13,518,000
Weighted-Average Exercise Price
Granted (in dollars per share) \| $ / shares		$ 4.55
Exercised (in dollars per share) \| $ / shares		2.81
Forfeited/Canceled (in dollars per share) \| $ / shares		8.45
Outstanding at the end of the period (in dollars per share) \| $ / shares		$ 6.60	$ 7.53
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Proceeds from Stock Options Exercised \| $		$ 240,000
Stock options \| Minimum
Weighted-Average Exercise Price
Exercised (in dollars per share) \| $ / shares		$ 2.47
Stock options \| Maximum
Weighted-Average Exercise Price
Exercised (in dollars per share) \| $ / shares		$ 4.00
Performance shares
Stock-Based Compensation
Number of equal installments \| installment	2	4
Number of Stock Options
Granted (in shares)		2,400,000
Outstanding at the end of the period (in shares)		139,100
Number of Restricted Stock Shares
Awarded (in shares)	295,200					57,400	57,400	57,400
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Allocated Share-based Compensation Expense \| $		$ 0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized \| $		$ 12.0
Restricted stock
Stock-Based Compensation
Number of equal installments \| item						3	3	3
Number of Restricted Stock Shares
Unvested at the beginning of the period (in shares)		1,297,000
Vested (in shares)		(337,000)
Forfeited (in shares)		(487,000)
Unvested at the end of the period (in shares)		473,000				1,297,000
Weighted-Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share) \| $ / shares		$ 2.97
Vested (in dollars per share) \| $ / shares		2.47
Forfeited (in dollars per share) \| $ / shares		3.62
Unvested at the end of the period (in dollars per share) \| $ / shares		$ 2.68				$ 2.97
Restricted stock \| Officers
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Allocated Share-based Compensation Expense \| $		$ 0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized \| $		$ 142,000
Previous 2016 and 2006 stock option plans
Stock-Based Compensation
Common stock authorized for issuance (in shares)		19,500,000
2018 Plan
Stock-Based Compensation
Common stock authorized for issuance (in shares)		7,500,000
Inducement Plan
Stock-Based Compensation
Number of employee share-based compensation plans \| plan		2
Common stock authorized for issuance (in shares)						1,500,000			850,000
Vesting period		4 years
Exercise period		10 years

Summary of Significant Accounting Policies - Segments (Details) - item	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Segment Information
Number of operating segments	1
Other customers
Segment Information
Percentages of revenue recognized	0.00%	0.00%
Royalty revenue \| Roche
Segment Information
Percentages of revenue recognized	98.00%
Royalty revenue \| Roche \| Revenues percentage
Segment Information
Percentages of revenue recognized		99.00%

Agreements - Roche (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended
Agreements - Roche (Details) - USD ($) $ in Thousands	Jan. 31, 2019	May 31, 2000	Mar. 31, 2020	Mar. 31, 2019
Collaborative Agreements disclosures
Non-cash royalty revenue related to sale of future royalties			$ 12,997	$ 8,488
Revenue from contract with customer			13,287	8,584
License and milestone fees
Collaborative Agreements disclosures
Revenue from contract with customer			283	79
Roche
Collaborative Agreements disclosures
Period in arrears to receive royalty reports and payments related to sales of Kadcyla		3 months
Percentage of royalty payments	100.00%
Roche \| Kadcyla
Collaborative Agreements disclosures
Non-cash royalty revenue related to sale of future royalties			$ 13,000	$ 8,500
OMERS \| Kadcyla
Collaborative Agreements disclosures
Non-cash royalty revenue related to sale of future royalties	$ 65,200
Percentage of royalty payments	100.00%

Agreements - CytomX (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
Agreements - CytomX (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Collaborative Agreements disclosures
Revenue from contract with customer		$ 13,287	$ 8,584
CytomX \| Development milestones
Collaborative Agreements disclosures
Entitled to receive		10,000
Revenue from contract with customer				$ 3,000
CytomX \| Phase 2 clinical trial
Collaborative Agreements disclosures
Revenue from contract with customer	$ 3,000
CytomX \| Regulatory milestones
Collaborative Agreements disclosures
Entitled to receive		50,000
CytomX \| Milestone payments
Collaborative Agreements disclosures
Entitled to receive		100,000
Milestone payments plus royalties on the commercial sales \| CytomX
Collaborative Agreements disclosures
Entitled to receive		$ 160,000

Convertible 4.5% Senior Notes (Details)	3 Months Ended		12 Months Ended
Convertible 4.5% Senior Notes (Details)	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2017	Dec. 31, 2016 USD ($) $ / shares
Convertible debt
Interest rate (as a percent)	4.50%			4.50%
Convertible 4.5% Senior Notes outstanding	$ 2,100,000
Interest expense	$ 24,000	$ 24,000
Convertible Notes
Convertible debt
Principal amount of debt						$ 100,000,000
Interest rate (as a percent)	4.50%				4.50%
Principal amount of debt for conversion calculations						$ 1,000
Ratio issued upon conversion			238.7775
Initial conversion price (in dollars per share) \| $ / shares						$ 4.19

Liability Related to Sale of Future Royalties (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Jan. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2015
Liability Related to Sale of Future Royalties
Non-cash royalty revenue related to the sale of future royalties		$ 12,997	$ 8,488
Kadcyla
Liability Related to Sale of Future Royalties
Percentage of royalty payments if applicable threshold is met				85.00%
Change in liability related to sale of future royalties
Liability related to sale of future royalties, net - beginning balance		123,541
Royalty payments received and paid		15,137
Non-cash interest expense recognized		5,699
Liability related to sale of future royalties, net - ending balance		114,103
IRH \| Kadcyla
Liability Related to Sale of Future Royalties
Percentage of royalty payments				100.00%
Percentage of royalty payments if applicable threshold is met				15.00%
Proceeds from sale of future royalties - net		200,000		$ 200,000
Transaction costs for royalty agreements				5,900
Change in liability related to sale of future royalties
Proceeds from sale of future royalties - net		$ 200,000		200,000
Effective annual interest rate		10.10%
Current effective interest rate		17.7
IRH \| Kadcyla \| Maximum
Liability Related to Sale of Future Royalties
Royalties threshold				260,000
IRH \| Kadcyla \| Minimum
Liability Related to Sale of Future Royalties
Royalties threshold				$ 235,000
OMERS \| Kadcyla
Liability Related to Sale of Future Royalties
Percentage of royalty payments	100.00%
Non-cash royalty revenue related to the sale of future royalties	$ 65,200
Contingent broker fees	1,500
Net proceeds from sale of residual rights to receive royalty payments	$ 65,200	$ 0

Capital Stock (Details) - shares		1 Months Ended		3 Months Ended
Capital Stock (Details) - shares	Dec. 09, 2016	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2020
Stock options
Stock-based compensation disclosure
Stock options granted to directors (in shares)				5,740,000
Compensation Policy for Non-Employee Directors \| Stock options
Stock-based compensation disclosure
Vesting period				1 year
Stock options granted to directors (in shares)		108,000	128,000
Compensation Policy for Non-Employee Directors \| Deferred share units
Stock-based compensation disclosure
Vesting period	1 year

Restructuring Charge (Details)	3 Months Ended			6 Months Ended		12 Months Ended
Restructuring Charge (Details)	Mar. 31, 2020 USD ($) ft²	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Restructuring charge
Restructuring charge	$ 825,000		$ 559,000
Workforce reduction
Restructuring charge
Balance at beginning of the period	4,087,000			$ 4,087,000
Additional charges/adjustments during the period						$ 41,000
Payments during the period						(1,347,000)
Balance at end of the period	2,781,000				$ 4,087,000	4,087,000
Workforce reduction \| 2019 Corporate Restructuring
Restructuring
Charge for severance related to a pre-existing plan		$ 16,000,000.0
Costs incurred					$ 15,400,000
Incremental retention benefits \| 2019 Corporate Restructuring
Restructuring
Costs incurred	$ 800,000					$ 2,100,000
Incremental retention benefits \| Forecast \| 2019 Corporate Restructuring
Restructuring
Costs incurred				$ 4,000,000.0
Winter Street 930 Waltham MA
Restructuring charge
Unoccupied office space for sub-lease \| ft²	10,281
Leasehold impairment charge			$ 559,000

Leases - Operating Leases (Details)	1 Months Ended	3 Months Ended
Leases - Operating Leases (Details)	Jan. 31, 2019 USD ($)	Mar. 31, 2020 USD ($) ft² item lease agreement	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Number of real estate leases \| lease		2
Weighted average remaining term of the operating leases		6 years
Right-of-use assets		$ 15,234,000		$ 15,587,000
Lease liabilities		$ 24,067,000
Unamortized lease incentive and straight-line lease liability balances	$ 9,700,000
Weighted-average discount rate		11.00%
Lease expense for operating lease payments		$ 1,000,000.0	$ 1,100,000
Cash paid against operating lease liabilities		1,400,000	1,300,000
Maximum
Lessee, Lease, Description [Line Items]
100 basis point change effect on ROU asset		$ 1,000,000
CRP/King 830 Winter L.L.C.
Lessee, Lease, Description [Line Items]
Actively seeking to sub-lease, area available \| ft²		80,000
Number of executed sub-lease spaces \| lease		2
Area of executed sublease space \| ft²		33,000
Area of space leased \| ft²		120,000
Number of additional terms for which lease agreement can be extended \| item		2
Operating lease term extension period		5 years
PDM 930 Unit, LLC
Lessee, Lease, Description [Line Items]
Area of executed sublease space \| ft²		10,281
Winter Street 930 Waltham MA
Lessee, Lease, Description [Line Items]
Number of executed sub-lease spaces \| agreement		3
Area of executed sublease space \| ft²		47,160
Minimum rental payments over the remaining term of the sublease		$ 13,000,000
Leasehold impairment charge			$ 559,000
ASU 2016-2 \| Restatement Adjustment
Lessee, Lease, Description [Line Items]
Right-of-use assets	17,600,000
Lease liabilities	$ 27,300,000

Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Leases
2020 (nine months remaining)	$ 4,125
2021	5,323
2022	5,389
2023	5,510
2024	5,470
Thereafter	6,866
Total lease payments	32,683
Less imputed interest	(8,616)
Total lease liabilities	24,067
Variable operating costs and real estate taxes	$ 3,100

Commitments and Contingencies (Details) € in Millions	Mar. 31, 2020 EUR (€)
Minimum
Collaborations and Manufacturing Commitments
Manufacturing commitment	€ 9.0