0001564590-20-050844 | 10-Q | XBRL Viewer | Cyclerion Therapeutics INC

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 03, 2020
Cover [Abstract]
Entity Registrant Name	CYCLERION THERAPEUTICS, INC.
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		33,961,868
Entity Central Index Key	0001755237
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Entity Tax Identification Number	83-1895370
Entity File Number	001-38787
Entity Incorporation, State or Country Code	MA
Entity Address, Address Line One	301 Binney Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02142
City Area Code	857
Local Phone Number	327-8778
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	CYCN
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 66,840	$ 94,895
Related party accounts receivable	400	1,474
Prepaid expenses	1,218	1,966
Other current assets	1,666	2,862
Total current assets	70,124	101,197
Restricted cash, net of current portion	3,837	4,991
Property and equipment, net	10,180	11,613
Operating lease right-of-use asset	44,396	68,137
Other assets	2,865	540
Total assets	131,402	186,478
Current liabilities:
Accounts payable	1,360	3,230
Related party accounts payable	495	81
Accrued research and development costs	2,160	2,198
Accrued expenses and other current liabilities	5,605	9,320
Short-term note payable	3,509
Current portion of operating lease liabilities	3,133	3,420
Total current liabilities	16,262	18,249
Operating lease liabilities, net of current portion	39,786	70,500
Commitments and contingencies
Stockholders' equity
Common stock, no par value, 400,000,000 shares authorized and 33,961,555 issued and outstanding at September 30, 2020 and 400,000,000 shares authorized and 27,598,133 issued and outstanding at December 31, 2019
Accumulated deficit	(144,201)	(85,627)
Paid-in capital	219,582	183,376
Accumulated other comprehensive loss	(27)	(20)
Total stockholders' equity	75,354	97,729
Total liabilities and stockholders' equity	$ 131,402	$ 186,478

Condensed Consolidated and Combined Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenue from related party	$ 400	$ 1,398	$ 2,163	$ 3,026
Cost and expenses:
Research and development	13,703	22,295	44,322	74,458
General and administrative	8,033	7,119	21,551	27,019
(Gain) loss on lease modification, net	444		(1,669)
Total cost and expenses	22,180	29,414	64,204	101,477
Loss from operations	(21,780)	(28,016)	(62,041)	(98,451)
Sublease termination income, net	2,875		2,875
Interest and other income, net	93	699	592	1,498
Net loss	$ (18,812)	$ (27,317)	$ (58,574)	$ (96,953)
Net loss per share:
Basic and diluted net loss per share (in dollars per share)	$ (0.59)	$ (1.00)	$ (2.01)	$ (3.54)
Weighted average shares used in calculating:
Basic and diluted net loss per share (in shares)	32,096	27,434	29,196	27,380
Other comprehensive loss:
Net loss	$ (18,812)	$ (27,317)	$ (58,574)	$ (96,953)
Other comprehensive loss:
Foreign currency translation adjustment (loss) gain	3	5	(7)	1
Total other comprehensive (loss) gain	3	5	(7)	1
Comprehensive loss	$ (18,809)	$ (27,312)	$ (58,581)	$ (96,952)

Condensed Consolidated and Combined Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common stock	Net Parent Investment	Paid-in capital	Accumulated deficit	Accumulated other comprehensive loss
Beginning balance at Dec. 31, 2018	$ (10,445)		$ (10,445)
Change in Stockholders' Equity (Deficit)
Net loss	(37,381)		(37,381)
Net transfers from Ironwood	36,085		36,085
Ironwood allocation - share-based compensation	3,989		3,989
Ending balance at Mar. 31, 2019	(7,752)		(7,752)
Beginning balance at Dec. 31, 2018	(10,445)		(10,445)
Change in Stockholders' Equity (Deficit)
Net loss	(96,953)
Foreign currency translation adjustment	1
Ending balance at Sep. 30, 2019	119,198			$ 178,768	$ (59,571)	$ 1
Ending balance (in shares) at Sep. 30, 2019		27,468,445
Beginning balance at Mar. 31, 2019	(7,752)		(7,752)
Change in Stockholders' Equity (Deficit)
Net loss	(32,254)				(32,254)
Net transfers from Ironwood	2,602		2,602
Separation-related adjustments	7,752		7,752
Reclassification of net parent company investment			$ (2,602)	2,602
Distribution of common stock by Ironwood upon separation (in shares)		15,562,555
Issuance of common stock - 2019/2020 private placement, net of fees	164,622			164,622
Number of shares issued in private placement		11,817,165
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		9,527
Issuance of common stock awards (in shares)		21,942
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	6,224			6,224
Foreign currency translation adjustment	(4)					(4)
Ending balance at Jun. 30, 2019	141,190			173,448	(32,254)	(4)
Ending balance (in shares) at Jun. 30, 2019		27,411,189
Change in Stockholders' Equity (Deficit)
Net loss	(27,317)				(27,317)
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan	372			372
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		57,256
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	4,948			4,948
Foreign currency translation adjustment	5					5
Ending balance at Sep. 30, 2019	119,198			178,768	(59,571)	1
Ending balance (in shares) at Sep. 30, 2019		27,468,445
Beginning balance at Dec. 31, 2019	$ 97,729			183,376	(85,627)	(20)
Beginning balance (in shares) at Dec. 31, 2019	27,598,133	27,598,133
Change in Stockholders' Equity (Deficit)
Net loss	$ (20,228)				(20,228)
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan	1			1
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		156,761
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	4,036			4,036
Foreign currency translation adjustment	2					2
Ending balance at Mar. 31, 2020	81,540			187,413	(105,855)	(18)
Ending balance (in shares) at Mar. 31, 2020		27,754,894
Beginning balance at Dec. 31, 2019	$ 97,729			183,376	(85,627)	(20)
Beginning balance (in shares) at Dec. 31, 2019	27,598,133	27,598,133
Change in Stockholders' Equity (Deficit)
Net loss	$ (58,574)
Foreign currency translation adjustment	(7)
Ending balance at Sep. 30, 2020	$ 75,354			219,582	(144,201)	(27)
Ending balance (in shares) at Sep. 30, 2020	33,961,555	33,961,555
Beginning balance at Mar. 31, 2020	$ 81,540			187,413	(105,855)	(18)
Beginning balance (in shares) at Mar. 31, 2020		27,754,894
Change in Stockholders' Equity (Deficit)
Net loss	(19,534)				(19,534)
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan	155			155
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		102,816
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	3,952			3,952
Foreign currency translation adjustment	(12)					(12)
Ending balance at Jun. 30, 2020	66,101			191,520	(125,389)	(30)
Ending balance (in shares) at Jun. 30, 2020		27,857,710
Change in Stockholders' Equity (Deficit)
Net loss	(18,812)				(18,812)
Issuance of common stock - 2019/2020 private placement, net of fees	24,250			24,250
Number of shares issued in private placement		6,062,500
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan	16			16
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		41,345
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	3,796			3,796
Foreign currency translation adjustment	3					3
Ending balance at Sep. 30, 2020	$ 75,354			$ 219,582	$ (144,201)	$ (27)
Ending balance (in shares) at Sep. 30, 2020	33,961,555	33,961,555

Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (58,574)	$ (96,953)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization	1,827	2,047
Net loss on disposal of property and equipment	205	76
(Gain) loss on lease modification, net	(1,669)
Sublease termination income, net	(2,875)
Share-based compensation expense	11,785	15,161
Changes in operating assets and liabilities:
Related party accounts receivable	1,074	(1,440)
Prepaid expenses	748	(1,297)
Other current assets	(8)	(49)
Operating lease assets	(3,592)	2,108
Other assets	(979)	25
Accounts payable	(1,094)	1,942
Related party accounts payable	414	187
Accrued research and development costs	(38)	(1,719)
Operating lease liabilities	(2,000)	3,395
Accrued expenses and other current liabilities	(3,673)	(3,535)
Net cash (used in) operating activities	(58,449)	(80,052)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,489)	(6,714)
Proceeds from sale of property and equipment	71	99
Net cash (used in) investing activities	(1,418)	(6,615)
CASH FLOWS FROM FINANCING ACTIVITIES:
Gross proceeds from 2020/2019 private placement	24,250	175,000
Costs associated with 2019 private placement		(10,378)
Proceeds from exercises of stock options and ESPP	172	365
Proceeds from short-term note payable	3,509
Transfers from Ironwood		46,439
Net cash provided by financing activities	27,931	211,426
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(7)	1
Net (decrease) increase in cash, cash equivalents and restricted cash	(31,943)	124,760
Cash, cash equivalents and restricted cash, beginning of period	102,620
Cash, cash equivalents and restricted cash, end of period	70,677	124,760
Supplemental cash flow disclosure:
Cash paid for initial direct costs of lease modification	6,507
Non-cash investing activities
Fixed asset purchases in accounts payable and accrued expenses	$ 4	$ 95

Nature of Business

9 Months Ended

Sep. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Business

1. Nature of Business

Nature of Operations

Cyclerion Therapeutics, Inc. (“Cyclerion”, the “Company” or “we”) is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing innovative medicines for people with serious diseases of the central nervous system (“CNS”), including cognitive and neurodegenerative disorders. Our current lead asset, IW-6463, is a pioneering CNS-penetrant sGC stimulator in clinical development for Mitochondrial Encephalomyopathy, Lactic Acidosis and Stroke-like episodes (MELAS) and Alzheimer's disease with vascular pathology (“ADv”). sGC stimulators are small molecules that act synergistically with nitric oxide (“NO”) on sGC to boost production of cyclic guanosine monophosphate, or cGMP. cGMP is a key second messenger that, when produced by sGC, regulates diverse and critical biological functions in the CNS including blood flow and vascular dynamics, inflammatory and fibrotic processes, bioenergetics, metabolism and neuronal function.

Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019. Cyclerion GmbH is an operational entity with one employee who is the Company’s Chief Innovation Officer. The functional currency is the Swiss franc.

Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year. Cyclerion Securities Corporation has no employees.

Company Overview

The Company’s priorities are advancing its ongoing IW-6463 clinical programs and seeking the out-licensing of praliciguat:

IW-6463, an orally administered CNS-penetrant sGC stimulator that is being developed as a symptomatic and potentially disease modifying therapy for serious CNS diseases. Nitric oxide is one of several fundamental neurotransmitters, yet it has not been leveraged for its full CNS therapeutic potential. IW-6463 stimulates sGC, a signaling enzyme that responds to the presence of NO, to enhance the body’s natural ability to produce cGMP, an important signaling molecule, naturally. An impaired NO-sGC-cGMP signaling pathway is believed to play an important role in the pathogenesis of neurodegenerative diseases and is critical to basic neuronal functions. Agents that stimulate sGC to produce cGMP may compensate for deficient NO signaling.

On January 13, 2020 the Company released positive top line results from our first-in-human study of IW-6463. IW-6463 was generally well tolerated in healthy human adults. The study demonstrated IW-6463 penetration across the blood-brain-barrier at levels expected to be pharmacologically active as well as a mild reduction in blood pressure providing evidence of peripheral pharmacological activity.

On October 14, 2020, the Company announced positive topline results from its IW-6463 Phase 1 translational pharmacology study. Treatment with IW-6463 in this 15-day 24-subject crossover study confirmed and extended results seen in earlier Phase 1 studies: once daily oral treatment demonstrated desired CNS exposure, blood-brain-barrier penetration and target engagement. Subjects receiving IW-6463 showed meaningful improvements in certain neurophysiological and objective performance measures that are associated with age-related cognitive decline and neurodegenerative diseases. Effects on cerebral blood flow and markers of bioenergetics were not observed in this study. IW-6463 was shown to be safe and generally well-tolerated. These results support the ongoing development of IW-6463 in serious CNS diseases.

We will soon begin enrolling our IW-6463 Phase 2 clinical trial in Mitochondrial Encephalomyopathy, Lactic acidosis, and Stroke-like episodes (MELAS). Over the coming months, the Company will use the findings of the translational pharmacology study and from the previous Phase 1 study, to inform further clinical development activities, including the planned Phase 2 clinical trial in Alzheimer’s disease with vascular pathology in 2021.

Olinciguat, an orally-administered, once-daily, vascular sGC stimulator for the potential treatment of sickle cell disease (“SCD”). Olinciguat was evaluated in the STRONG-SCD study, a randomized, placebo-controlled, dose-ranging Phase 2 study of 70 participants with sickle cell disease designed to evaluate safety, tolerability, and pharmacokinetics of olinciguat, compared to placebo, and to explore effects on daily symptoms and biomarkers of disease activity when dosed over a 12-week treatment period. On October 14, 2020, the Company announced topline results from this study. It did not demonstrate adequate activity to support further internal clinical development. The Company intends to complete its analysis of the study results and present or publish them in a future forum.

Praliciguat, an orally administered, once-daily systemic sGC stimulator that was evaluated in two Phase 2 proof-of-concept studies: a dose-ranging study in 156 adult patients with diabetic nephropathy, and a study in 196 adult patients with heart failure with preserved ejection fraction (HFpEF), CAPACITY-HFpEF. On October 30, 2019, we released topline results from these studies. The Company’s efforts to out-license rights to praliciguat have expanded to discussions beyond treatment of cardiometabolic disorders to include additional indications where sGC stimulators have demonstrated efficacy.

The Separation

On April 1, 2019, Ironwood Pharmaceuticals, Inc. (“Ironwood”) completed the previously announced separation of its sGC business, and certain other assets and liabilities, into a separate, independent publicly traded company by way of a pro-rata distribution of all of the outstanding shares of common stock of Cyclerion Therapeutics, Inc. through a dividend distribution of one share of the Company’s common stock, with no par value per share, for every 10 shares of Ironwood common stock held by Ironwood stockholders as of the close of business on March 19, 2019, the record date for the Distribution (the entire transaction being the “Separation”). As a result of the Separation, the Company became an independent public company and commenced trading under the symbol “CYCN” on the Nasdaq Global Select Market on April 2, 2019.

In connection with the Separation, on March 30, 2019, the Company entered into certain agreements with Ironwood to provide a framework for the Company’s relationship with Ironwood following the Separation, including, among others, the Separation Agreement, Tax Matters Agreement, and Employee Matters Agreement (“EMA”).

In addition, in connection with the Separation, on April 1, 2019, the Company entered into a Development Agreement, an Ironwood Transition Services Agreement, a Cyclerion Transition Services Agreement and an Intellectual Property License Agreement with Ironwood.

On April 2, 2019, the Company issued 11,817,165 shares in a private placement (the “2019 Equity Private Placement”) of common stock to accredited investors for gross proceeds of $175 million (net proceeds of approximately $165 million).

2020 Equity Private Placement

On July 29, 2020, the Company entered into a Common Stock Purchase Agreement (the “2020 Equity Private Placement”) with two investors for a private placement of 6,062,500 shares of the Company’s common stock, at a purchase price of $4.00 per share for total gross proceeds of approximately $24.3 million. The closing of the 2020 Equity Private Placement occurred on July 29, 2020. The Company did not use a placement agent or broker in connection with the 2020 Equity Private Placement and incurred no commissions and no material direct transaction fees.

At-the-Market Offering

On July 24, 2020, the Company filed a Registration Statement on Form S-3 (the “Shelf”) with the Securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $150.0 million. The Shelf was declared effective as of July 31, 2020. On September 3, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering (the “ATM Offering”) under the Shelf. Under the ATM Offering, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million through Jefferies as its sales agent. The Company will pay to Jefferies cash commissions of 3.0 percent of the gross proceeds of sales of common stock under the Sales Agreement. As of September 30, 2020, no shares have been issued or sold under the ATM Offering.

Basis of Presentation

The Company did not operate as a separate, stand-alone entity for the prior interim period covered by the interim condensed consolidated and combined financial statements. The Company’s condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, condensed consolidated and combined statements of operations and comprehensive loss and statements of cash flows for the three and nine months ended September 30, 2020 and combined statements of operations and comprehensive loss for the three months ended September 30, 2019 consist of the condensed consolidated balances and activity of Cyclerion as prepared on a stand-alone basis. The Company’s condensed consolidated and combined statements of operations and comprehensive loss and statements of cash flows for the nine months ended September 30, 2019 have been prepared on a “carve out” basis.

The unaudited condensed consolidated and combined financial statements reflect the historical results of the operations, financial position and cash flows of Cyclerion, in conformity with United States generally accepted accounting principles (“U.S. GAAP”).

The accompanying unaudited condensed consolidated and combined financial statements reflect the condensed consolidated and combined financial position and condensed consolidated and combined results of operations of the Company as an independent, publicly-traded company for the period after the Separation on April 1, 2019. The unaudited condensed consolidated and combined financial statements also reflect the financial position and results of operations of the Company as a combined reporting entity of Ironwood for periods prior to the Separation.

For periods prior to the Separation, the unaudited condensed consolidated and combined financial statements of Cyclerion reflect the assets, liabilities, and expenses directly attributable to Cyclerion, as well as allocations of certain corporate level expenses, deemed necessary to fairly present the results of operations and cash flows of Cyclerion, as discussed further below. As such, these allocations may not be indicative of the actual amounts that would have been recorded had Cyclerion operated as an independent, publicly traded company for the years presented.

Prior to the Separation, Cyclerion was dependent upon Ironwood for all of its working capital and financing requirements, as Ironwood used a centralized approach to cash management and financing its operations. There were no cash amounts specifically attributable to Cyclerion for the historical periods presented; therefore, there is no cash reflected for historical periods in the condensed consolidated and combined financial statements. Accordingly, cash and cash equivalents, debt or related interest expense have not been allocated to Cyclerion in the historical financial statements. Financing transactions related to Cyclerion are accounted for as a component of net parent investment in the historical combined balance sheets and as a financing activity on the accompanying combined statements of cash flows.

Prior to the Separation, Cyclerion’s combined financial statements included an allocation of expenses related to certain Ironwood corporate functions, including senior management, legal, human resources, finance, information technology and quality assurance. These expenses were allocated to Cyclerion based on direct usage or benefit where identifiable, with the remainder allocated pro-rata based on project related costs, headcount or other measures. These allocations may not be indicative of the actual expense that would have been incurred had Cyclerion operated as an independent, publicly traded company for the periods presented.

Prior to the Separation, the combined balance sheets of Cyclerion included assets and liabilities that were allocated principally on a specific identification basis and net parent investment was shown in lieu of stockholders’ equity. As a result of the Separation, the Company’s net parent investment balance was reclassified to paid-in capital.

Going Concern

At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern.

The Company has experienced negative operating cash flows for all historical periods presented. The Company expects these losses to continue into the foreseeable future as the Company continues the development and clinical testing of its product candidate IW-6463, and its discovery research programs. On April 2, 2019, the Company received gross proceeds of $175 million (net proceeds of approximately $165 million) from the 2019 Equity Private Placement. On July 29, 2020, the Company received proceeds of approximately $24.3 million from the 2020 Equity Private Placement.

After considering the Company’s current research and development plans and the timing expectations related to the progress of its programs, and after considering its existing cash and cash equivalents as of September 30, 2020, the Company did not identify conditions or events that would raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements were issued.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The accounting policies of the Company are set forth in Note 2. Summary of Significant Accounting Policies to the consolidated and combined financial statements contained in the Company’s 2019 annual report on Form 10-K. The Company includes herein certain updates to those policies.

Leases

The Company has a property lease for its headquarters location at 301 Binney Street, Cambridge, MA (the “Head Lease”). The Company determines if an arrangement is a lease at the inception of the contract. The asset component of the Company’s operating leases is recorded as operating lease right-of-use (“ROU”) assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion, in the Company’s consolidated balance sheets.

ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. The Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives received.

Lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. Variable lease costs that do not depend on an index or rate are recognized as incurred.

ROU assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured ROU assets and the operating lease liabilities are recognized as a gain or loss in operating expenses. The Company reviews any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective ROU asset.

On October 18, 2019, the Company entered into an agreement to sublease 15,700 rentable square feet of its Head Lease to a subtenant (the “Sublease Agreement”). Sublease income is recognized on straight-line basis over the term of the sublease agreement and is recorded net of the related rent expense from the Head Lease within interest and other income, net in the condensed consolidated and combined statements of operations and comprehensive loss. In sublease agreements that contain non-monetary consideration, the Company estimates the fair market value of the non-monetary consideration received using market data and recognizes it on a straight-line basis over the sublease term. Variable lease consideration that does not depend on an index or rate is allocated to a non-lease component and is recognized over time in accordance with the pattern of transfer. No modification or impairment was deemed to have occurred by entering into the sublease agreement because the Company was not released, either fully or in part, from its obligations under the Head Lease. See Note 8, Leases.

On February 28, 2020 the Company entered into an amendment to its Head Lease at 301 Binney Street in Cambridge, Massachusetts (the “Lease Amendment”). The Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company will continue to lease approximately 74,000 rentable square feet under terms of the amended lease. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a gain of approximately $2.1 million as a component of operating expenses for the three months ended March 31, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases.

On September 15, 2020, the Company entered into an amendment to its Head Lease at 301 Binney Street in Cambridge, Massachusetts (the “Second Lease Amendment”). The Second Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 17,000 rentable square feet (the “Surrender Space”). The Surrender Space includes the 15,700 rentable square feet being subleased by the Company to a subtenant. The Company will continue to lease approximately 57,000 rentable square feet under terms of the amended lease. The Second Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a loss of approximately $0.4 million as a component of operating expenses for the three months ended September 30, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases.

On September 15, 2020, concurrent with the execution of the Second Lease Amendment, the Company entered into an agreement with its subtenant to terminate the Sublease Agreement of approximately 15,700 rentable square feet (“the Sublease Termination Agreement”). Under the terms of the Sublease Termination Agreement, the former subtenant is obligated to provide licensed rooms and services to the Company free of charge through the original sublease term. Upon termination of the sublease, the Company recognized sublease termination income of approximately $3.1 million related to the prepaid rooms and services, and wrote off the remaining indirect costs from the sublease of approximately $0.2 million, in the condensed consolidated and combined statements of operations and comprehensive loss. See Note 8, Leases.

Paycheck Protection Program Loan

On April 21, 2020, the Company received loan proceeds in the amount of approximately $3.5 million pursuant to a promissory note agreement (the “Promissory Note”) with a bank under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The Promissory Note has a loan maturity of April 20, 2022, a stated interest rate of 1.0% per annum, and has payments of principal and interest that are due monthly after an initial six-month deferral period where interest accrues, but no payments are due. The Promissory Note provides for customary events of default, including, among others, those relating to failure to make payment when due and breaches of representations. The Company may prepay the principal of the Promissory Note at any time without incurring any prepayment charges. The loan is subject to all the terms and conditions applicable under the PPP and is subject to review by the Small Business Association (the “SBA”) for compliance with program requirements, including the Company’s certification that the current economic uncertainty made the PPP loan request necessary to support ongoing operations. On October 2, 2020, the SBA issued procedural guidance with respect to PPP loans and changes in ownership and the Company believes that it is compliant with respect to the 2020 Equity Private Placement and the ATM Offering.

In June 2020, the Payroll Protection Program Flexibility Act (“PPPFA”) was signed into law adjusting certain key terms of loans issued under the PPP. In accordance with the PPPFA, the initial deferral period may be extended from six to up to ten months and the loan maturity may be extended from two to five years. The PPPFA also provided for certain other changes, including the extent to which the loan may be forgiven.

The loan’s principal and accrued interest are forgivable to the extent that the proceeds are used for eligible purposes, subject to certain limitations, and that the Company maintains its payroll levels over a twenty-four-week period following the loan date. The loan forgiveness amount may be reduced if the Company terminates employees or reduces salaries during the twenty-four-week period. The Company believes that it has used the proceeds for eligible purposes consistent with the provisions of the PPPFA. However, there can be no assurance that any portion of the loan will be forgiven and that we will not have to repay the loan in full.

As the legal form of the Promissory Note is a debt obligation, the Company is accounting for it as debt under Accounting Standards Codification (ASC) 470, Debt and recorded an initial short-term liability of $3.5 million in the condensed consolidated balance sheet upon receipt of the loan proceeds. The Company is accruing interest over the term of the loan and is not imputing additional interest at a market rate because the guidance on imputing interest in ASC 835-30, Interest excludes transactions where interest rates are prescribed by a government agency. A de minimis amount of interest expense has been recognized within interest and other income, net in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and a de minimis amount of interest expense has been accrued within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2020. If any amount of the loan is ultimately forgiven, income from the extinguishment of debt would be recognized as a gain on loan extinguishment in the consolidated statement of operations and comprehensive loss.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the condensed consolidated and combined financial statements, the Company did not adopt any new accounting pronouncements during the nine months ended September 30, 2020 that had a material effect on its condensed consolidated and combined financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”) to provide additional guidance on the adoption of ASU 2016-13, ASU No. 2019-10, Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”), ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU 2019-11”) and ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)("ASU 2020-02"). ASU 2019-04 added Topic 326, Financial Instruments—Credit Losses, and made several amendments to the codification and also modified the accounting for available-for-sale debt securities. ASU 2019-05 provides targeted transition relief by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2019-10 aligned the effective dates of certain major updates not yet effective to conform to the FASB’s new philosophy of staggering major updates between large public companies and all other entities. ASU 2019-11’s major provisions included additional clarifications and practical expedients related to expected recoveries for purchased assets with credit deterioration, troubled debt restructuring, accrued interest receivables, and other areas when adopting ASU 2016-13. ASU 2020-02 provided amendments to the Topic 326 including a new section related to credit losses measured at amortized cost and a clarification to Topic 842 and is effective when adopting other areas of Financial Instruments-Credit Losses Topic 326. As a public business entity that qualifies as a smaller reporting company, ASU 2016-13, ASU 2019-04 and ASU 2019-05 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of these ASUs will have on the Company’s financial position and results of operations.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (“ASU 2018-13”): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”) which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-13 in the first quarter of 2020 and the adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”). ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40, Intangibles—Goodwill and Other—Internal Use Software (ASC 350-40), to determine which implementation costs to capitalize as assets or expense as incurred. The internal-use software guidance in ASC 350-40 requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and post-implementation stages be expensed as they are incurred. A customer’s accounting for the hosting component of the arrangement is not affected by this guidance. The amendments in ASU 2018-15 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-15 in the first quarter of 2020 and the adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s condensed consolidated and combined financial statements upon adoption.

Related Party Transactions

9 Months Ended

Sep. 30, 2020

Related Party Transactions

3. Related Party Transactions

Relationship with Ironwood

Prior to April 1, 2019, the Company was managed and operated in the normal course of business under Ironwood. Ironwood became a related party when Mark Currie, Ironwood’s former Chief Scientific Officer and the Company’s President, joined Ironwood’s board in April 2019 following the Separation.

Certain shared costs were allocated to the Company and reflected as expenses in the Company’s stand-alone combined financial statements for periods prior to the Separation. The expenses reflected in the condensed combined financial statements for periods prior to the Separation may not be indicative of expenses that will be incurred by the Company in the future.

(a) Corporate costs

Ironwood incurred significant corporate costs for services provided to Cyclerion. These costs included expenses for information systems, accounting, other financial services (such as treasury, audit and purchasing), human resources, legal, facilities and Separation-related costs. A portion of these costs benefited Cyclerion and have been allocated to Cyclerion using a pro-rata method based on project related costs, headcount, or other measures that management believes are consistent and reasonable. The corporate costs allocated to Cyclerion, prior to the Separation, and included in the combined statements of operations was approximately $6.8 million for the three months ended March 31, 2019 and was included in general and administrative expenses.

(b) Cash Management and Financing

Cyclerion participated in Ironwood’s centralized cash management and financing programs prior to the Separation. Disbursements were made through centralized accounts payable systems operated by Ironwood. Cash receipts were transferred to centralized accounts, also maintained by Ironwood. As cash is disbursed and received by Ironwood, it was accounted for by Cyclerion through net parent investment. All obligations were financed by Ironwood and financing decisions were determined by central Ironwood treasury operations until the Separation.

Other Transactions with Ironwood

As part of the Separation from Ironwood, the Company entered into Transition Services Agreements and a Development Agreement with Ironwood.

Under the Transition Services Agreements, the Company provides certain services to Ironwood, and Ironwood provides certain services to the Company, each related to corporate functions such as finance, procurement, facilities and development for a period of up to two years from the date of the Separation, unless earlier terminated or extended by mutual agreement. These services are charged to and from Ironwood and are recorded as part of operating expenses. All services provided to and from the Company under the Transition Services Agreements were completed as of March 31, 2020 and the agreements were terminated. The net charge to operating expenses for the Transition Services Agreements was de minimis for the three and nine months ended September 30, 2020 and was de minimis and $0.1 million for the three and nine months ended September 30, 2019, respectively.

Under the Development Agreement, the Company provides certain research and development services to Ironwood at mutually agreed upon rates and the amounts earned are recorded as revenue from related party. Such research and development activities are governed by a joint steering committee composed of representatives of both Ironwood and the Company. Ironwood and the Company have agreed that the Development Agreement will not be renewed beyond its initial term which ends on March 31, 2021. The Company recorded approximately $0.4 million and $2.2 million in revenue from related party for services provided under the Development Agreement for the three and nine months ended September 30, 2020, respectively, and recorded $1.4 million and $3.0 million for the three and nine months ended September 30, 2019, respectively.

In accordance with the Separation Agreement, there were certain other transactions and adjustments post-Separation between the Company and Ironwood. During the three and nine months ended September 30, 2020, the Company recorded approximately $0.6 million and $0.7 million in general and administrative expense for the reimbursement of certain expenses to Ironwood in accordance with the Separation Agreement. During the three months ended September 30, 2019, Cyclerion paid Ironwood approximately $1.3 million associated with tenant improvement reimbursement provisions. The total amount due from Ironwood at September 30, 2020 and December 31, 2019 was approximately $0.4 million and $1.5 million, respectively, primarily from the Development Agreement, and is reflected as related party accounts receivable. There was approximately $0.1 million due to Ironwood at September 30, 2020 and December 31, 2019, respectively.

Peter Hecht, Ironwood’s former Chief Executive Officer and the Chief Executive Officer and board member of Cyclerion, donated 2.5 million of his shares of Ironwood common stock to American Endowment Foundation for the creation of a donor advised fund that divested these shares to invest $34.0 million in Cyclerion as part of the financing transaction completed by Cyclerion on April 2, 2019. Mark Currie has invested $4.0 million in Cyclerion as part of this financing. Dr. Currie and certain other investors have funded a portion of their investment through sales of Ironwood common stock.

Other Related Party Transactions

During the three and nine months ended September 30, 2020, the Company recorded approximately $0.4 million and $1.0 million, respectively, of research and development costs to a related party which it engaged to provide research and development transaction support services. The entity became a related party when Mark Currie, the Company’s President, joined its board in January 2020. There was approximately $0.4 million and a de minimis amount due to the related party at September 30, 2020 and December 31, 2019, respectively.

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy. The following tables presents information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values as of September 30, 2020 and December 31, 2019 (in thousands):

	Fair Value Measurements as of September 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	65,827	$	—	$	—	$	65,827
Cash equivalents	$	65,827	$	—	$	—	$	65,827

	Fair Value Measurements as of December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	93,859	$	—	$	—	$	93,859
Cash equivalents	$	93,859	$	—	$	—	$	93,859

- Definition

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

+ References + Details

Property and Equipment

9 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Property and Equipment

5. Property and Equipment

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

	September 30,			December 31,
	2020			2019
Laboratory equipment	$	12,288		$	14,505
Software		2,261			2,232
Construction in progress		5			915
Computer and office equipment		1,547			1,890
Leasehold improvements		14,859			13,673
Property and equipment, gross		30,960			33,215
Less: accumulated depreciation and amortization		(20,780	)		(21,602	)
Property and equipment, net	$	10,180		$	11,613

As of September 30, 2020, and December 31, 2019, the Company’s property and equipment was primarily located in Cambridge, Massachusetts.

Depreciation and amortization expense of the Company’s property and equipment was approximately $0.6 million and $0.7 million for the three months ended September 30, 2020 and 2019, respectively, and approximately $1.8 million and $2.0 million for the nine months ended September 30, 2020 and 2019, respectively. The Company recorded a net loss on disposal of property and equipment of a de minimis amount and $0.2 million for the three and nine months ended September 30, 2020, respectively, recognized within operating expenses in the condensed consolidated and combined statements of operations and comprehensive loss. Leasehold improvements of $1.5 million were put into service in the nine months ended September 30, 2020, of which $0.9 million was included in construction in progress as of December 31, 2019.

Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

8. Leases

The FASB issued ASU 2016-02, or the leasing standard or ASC 842, in February 2016. ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also requires certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases.

On April 1, 2019, the Company entered into the Head Lease, a direct operating lease for its existing premises located at 301 Binney Street, Cambridge, MA consisting of approximately 114,000 rentable square feet of office and lab space on the first and second floors. The Head Lease is for a term of 123 months with two five-year extension options and certain expansion rights. The Head Lease includes a letter of credit, initially in the amount of $7.7 million, posted with the landlord as a security deposit, which is collateralized by a money market account recorded as restricted cash on the Company’s condensed consolidated balance sheets. Cyclerion has also entered into customary non-disturbance arrangements with the building landlord’s mortgagee and with the property ground lessor recognizing Cyclerion’s leasehold interest in this property.

The Head Lease provides for annual base rent of approximately $11.0 million in the first year, which increases on a yearly basis by 3.0% (subject to an abatement of base rent of approximately $2.7 million in the first year of the lease). The Company is obligated to pay the landlord for certain costs, taxes and operating expenses related to the premises, subject to certain exclusions; however, the Company has concluded that these payments are not in-substance fixed payments and therefore are not included in the calculation of the related lease liability and asset under ASC 842. Additionally, the Company has made the policy election to adopt the practical expedient to not separate lease components from non-lease components for the right-to-use asset class of office and laboratory space. This policy election results in the Company accounting for the lease component, the use of the premises, and the non-lease components, which include a property management fee, as a single lease component.

The Company recorded the liability associated with the Head Lease at the present value of the lease payments not yet paid, discounted using the discount rate for the Head Lease established at the commencement date. As the Head Lease does not provide an implicit rate, the Company had to estimate the incremental borrowing rate, or IBR, as of the commencement date. The IBR is defined under ASC 842 as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The Company determined its IBR to be 10.9% at the time of the agreement, which was used to discount the remaining lease payments over the remaining lease term and recorded a lease liability of $71.3 million on April 1, 2019. This lease liability will be amortized over the remaining lease term in an amount equal to the difference between the cash rent paid and the monthly interest calculated on the remaining lease liability.

The Company had a tenant improvement allowance from the landlord of approximately $2.3 million for certain permitted costs related to the buildout of the premises. The Company is deemed to be the owner of these tenant improvements during the lease term. These $2.3 million of improvements are included in the Company’s property, plant and equipment balances in its consolidated balance sheets as of September 30, 2020 and December 31, 2019 and are depreciated over the shorter of their useful life or the related lease term. The Company received the payment for the tenant allowance in the third quarter of 2019.

On April 1, 2019, the Company recorded a right-of-use asset in the amount $71.3 million. The right-of-use asset is being amortized over the remaining lease term in an amount equal to the difference between the calculated straight-line expense of the total lease payments less the monthly interest calculated on the remaining lease liability.

On February 28, 2020 the Company entered into an amendment to our Head Lease at 301 Binney Street in Cambridge, Massachusetts. The Lease Amendment provides for the partial termination of the Company’s rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company will continue to lease approximately 74,000 square feet including the area covered by the subleased premise, discussed below. The Company reduced its remaining lease payments through June 2029 by approximately $41.9 million. In connection with the Lease Amendment, the Company paid $6.3 million for a termination fee and $0.2 million for other initial direct costs, which will be deferred and recognized over the remaining lease term. The Company’s security deposit was reduced by approximately $2.7 million to approximately $5.0 million.

The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.7%, which resulted in a reduction of the ROU asset of $21.4 million and a reduction in the operating lease liabilities of $23.5 million. The Company recorded the resulting gain of approximately $2.1 million as a component of operating expenses in the condensed consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2020.

On September 15, 2020 the Company entered into the Second Lease Amendment to our Head Lease at 301 Binney Street in Cambridge, Massachusetts. The Second Lease Amendment provides for the partial termination of the Company’s rights and obligations with respect to a portion of the leased premises of approximately 17,000 rentable square feet. The Surrender Space includes 15,700 rentable square feet being subleased by the Company to a subtenant. The Company will continue to lease approximately 57,000 square feet of space. The Company reduced its remaining lease payments through June 2029 by approximately $16.9 million. The Company paid no termination or other initial direct costs related to the execution of the Second Lease Amendment. The Company’s security deposit was reduced by approximately $1.2 million to approximately $3.8 million, which is classified as restricted cash on the Company’s condensed consolidated balance sheet as of September 30, 2020.

The Second Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 6.1%, which resulted in a reduction of the ROU asset of $5.9 million and a reduction in the operating lease liabilities of $5.5 million. The Company recorded the resulting loss of approximately $0.4 million as a component of operating expenses in the condensed consolidated statement of operations and comprehensive loss.

The Company has an operating lease right-of-use asset of approximately $44.4 million and $68.1 million related to the amended Head Lease recorded in its condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, respectively. The Company has current operating lease liabilities of approximately $3.1 million and $3.4 million, and noncurrent operating lease liabilities of approximately $39.8 million and $70.5 million, related to the amended Head Lease recorded in its condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, respectively.

Lease cost is recognized on a straight-line basis over the lease term. For the three and nine months ended September 30, 2020, the Company recognized a total of approximately $2.0 million and $6.9 million, respectively, of total lease costs. Variable lease costs not subject to an index or rate are recognized as incurred. For the three and nine months ended September 30, 2020, the Company recognized a total of approximately $0.4 million and $1.9 million, respectively, of variable lease costs related to the Head Lease, as amended.

Supplemental cash flow information related to leases for the nine months ended September 30, 2020 is as follows:

	Nine Months Ended September 30, 2020
Decrease in right-of-use assets related to lease modifications	$	27,333
Decrease in operating lease liabilities due to lease modifications	$	29,002
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	6,076
Weighted-average remaining lease term of operating leases (in years)		8.8
Weighted-average discount rate of operating leases		6.1	%

On March 31, 2019, the Company entered into a short-term sublease of approximately 24,000 rentable square feet with Ironwood to provide temporary working space for a portion of its workforce while the buildout of the Company’s new premises was being completed. The sublease was for an initial one-month term with several one-month extension options. The Company subleased the space for approximately 1.5 months, vacating the space and terminating the sublease in mid-May 2019. The Company incurred $0.2 million in rent expense related to the sub-lease for the nine months ended September 30, 2019.

On October 18, 2019, the Company entered into an agreement with a third party to sublease 15,700 rentable square feet of its lease premises under the Head Lease. The sublease was scheduled to expire on June 30, 2029, unless earlier terminated in accordance with the sublease agreement, and has no extension options. The sublease provides for annual base rent of approximately $1.5 million in the first year, which increases on a yearly basis by 3.0% (subject to an abatement of base rent of approximately $0.7 million for the first six months of the sublease). As part of the consideration for the sublease, the sublessee agreed to provide licensed rooms and services within the sublease premises to the Company over the sublease term free of charge. In addition, the sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space, the consideration for which is variable and is based on the actual operating costs of the lessor. The Company allocated the total consideration in the sublease agreement between the lease and non-lease components in the contract based on their relative standalone prices. The Company determined that the variable consideration relates exclusively to non-lease components and will be recognized as incurred. The sublease included an initial security deposit of $0.5 million, which was provided by the sublessee in the form of a letter of credit, and an additional security deposit of $0.4 million within nine months of the sublease commencement.

On September 15, 2020, concurrent with execution of the Second Lease Amendment, the Company entered into the Sublease Termination Agreement to terminate its sublease of 15,700 rentable square feet. Under the terms of the Sublease Termination Agreement, the subtenant is relieved of its obligation to provide future cash rental payments to the Company. The agreements requiring the former subtenant to provide licensed rooms and services to the Company free of charge through the original sublease term survived the sublease termination. The Company expects to receive the benefit of the licensed rooms and services beginning in the third quarter of 2021. The letter of credit security deposit related to the sublease was released.

The Company determined that the Sublease Termination Agreement constitutes a non-monetary exchange under ASC 845 Nonmonetary Transactions (“ASC 845”) where, in return for the free rooms and the services, the Company agreed to terminate its rights and obligations under the sublease agreement. In accordance with ASC 845, the Company determined that the accounting for the transaction should be based on the fair value of assets or services involved. The Company estimated the fair value of the rooms and services to be approximately $1.5 million and $2.9 million, respectively. Accordingly, prepaid rooms and services of $4.4 million were recorded upon the sublease termination, of which $1.5 million is recorded in other current assets and $2.9 million is recorded in other assets in the condensed consolidated balance sheets as of September 30, 2020. Termination fee income of $3.1 million was recognized related to the rooms and services, after considering the rent receivable balance of $1.3 million outstanding from the subtenant. The remaining unamortized direct costs of $0.2 million were written off. The effects of the Sublease Termination Agreement are recorded within sublease termination income, net in the condensed consolidated and combined statements of operations and comprehensive loss.

The Company determined that the licensed rooms represent a lease under ASC 842. Once the Company obtains control of the rooms, the prepaid rooms balance will be reclassified from other assets to a ROU asset, and the related lease expense will be recorded on a straight-line basis over the lease term. The Company determined that the licensed services represent a non-lease component, which will be recognized separately from the lease component for this asset class. The expense related to the licensed services will be recognized on a straight-line basis over the period the services are received. Both the lease expense and services expense will be recognized as a component of research and development costs in the condensed consolidated and combined statements of operations and comprehensive loss.

For the three and nine months ended September 30, 2020, gross sublease income of $0.4 million and $1.5 million, respectively, and net sublease income of approximately $0.1 million and $0.3 million, respectively, was recorded in interest and other income, net in the condensed consolidated and combined statements of operations and comprehensive loss.

Future minimum lease payments under non-cancelable operating leases under ASC 842 as of September 30, 2020 are as follows:

	Operating Lease Payments
2020 (remaining three months)	$	1,335
2021		5,742
2022		5,908
2023		6,080
2024		6,256
2025 and thereafter		30,486
Total future minimum lease payments (receipts)		55,807
Less: present value adjustment		12,888
Operating lease liabilities at September 30, 2020		42,919
Less: current portion of operating lease liabilities		3,133
Operating lease liabilities, net of current portion	$	39,786

Share-based Compensation Plans

9 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-based Compensation Plans

9. Share-based Compensation Plans

Prior to the Separation, share-based compensation expense was allocated to Cyclerion using a combined specific identification and pro-rata method based on internal project related costs and headcount that management believed were consistent and reasonable.

In connection with the Separation, Cyclerion adopted its own share-based compensation plans. Specifically, Cyclerion adopted the 2019 Employee Stock Purchase Plan (“2019 ESPP”) and the 2019 Equity Incentive Plan (“2019 Equity Plan”). Under the 2019 ESPP, eligible employees may use payroll deductions to purchase shares of stock in offerings under the plan, and thereby acquire an interest in the future of the Company. Under the 2019 Equity Plan, new post-Separation awards, including stock options and restricted stock units (“RSUs”), may be granted to employees of the Company.

Cyclerion also mirrored two of Ironwood’s existing plans, the Amended and Restated 2005 Stock Incentive Plan (“2005 Equity Plan”) and the Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan (“2010 Equity Plan). These mirror plans were adopted to facilitate the exchange of Ironwood equity awards for Cyclerion equity awards upon the Separation as part of the equity conversion. As a result of the Separation and in accordance with the EMA, employees of both companies retained their existing Ironwood vested options and received a pro-rata share of Cyclerion options, regardless of which company employed them post-Separation. For employees that were ultimately employed by Cyclerion, unvested Ironwood options and RSUs were converted to unvested Cyclerion options and RSUs.

The conversion of equity awards resulting from the Separation impacted approximately 143 employees and was treated as a Type 1 modification under ASC Topic 718, Share Based Payments, as the awards are expected to vest under the original terms. Incremental compensation expense was measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms were modified. The fair value of RSUs and restricted stock awards was measured using the fair value stock price immediately before and immediately after the modification date which resulted in no incremental compensation expense. The fair value of stock options was measured using the Black-Scholes option pricing method using the appropriate valuation assumptions immediately before and immediately after the modification date. As a result of the modification, Cyclerion recognized a one-time incremental expense of approximately $0.3 million for the vested stock options and will recognize an incremental expense of approximately $7.5 million for the unvested stock options over their remaining vesting period.

The following table provides share-based compensation reflected in the Company’s condensed consolidated and combined statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Research and development	$	1,784	$	2,192	$	5,584	$	6,774
General and administrative		2,012		2,756		6,200		8,386
	$	3,796	$	4,948	$	11,784	$	15,160

There were no stock options granted for the three months ended September 30, 2020. For the nine months ended September 30, 2020, the Company granted stock options to purchase an aggregate 270,846 shares at a weighted average grant date fair value of $2.15 per share.

As of September 30, 2020, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested time-based stock options held by Cyclerion’s employees is $16.5 million and the weighted average period over which that expense is expected to be recognized is 2.39 years.

As of September 30, 2020, the unrecognized share-based compensation expense related to stock options containing market conditions held by Cyclerion’s employees is $0.3 million, which is expected to be recognized over a weighted-average period of 3.6 years.

As of September 30, 2020, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested RSUs held by the Company’s employees is 3.8 million and the weighted-average period over which that expense is expected to be recognized is 2.01 years.

Loss per share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Loss per share

10. Loss per share

Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Numerator:
Net loss (in thousands)	$	(18,812	)	$	(27,317	)	$	(58,574	)	$	(96,953	)

Denominator:
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)		32,096			27,434			29,196			27,380
Net loss per share — basic and diluted	$	(0.59	)	$	(1.00	)	$	(2.01	)	$	(3.54	)

For both the three and nine months ended September 30, 2020 there were 7,439,901 shares of common stock related to stock options and 428,077 shares of common stock related to RSUs were excluded from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive.

Prior to April 1, 2019, there were no Cyclerion shares outstanding, as such, the shares outstanding immediately after the distribution and the 2019 Equity Private Placement were used to calculate the basic and diluted net loss per share for the nine months ended September 30, 2019.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2020
Accounting Policies [Abstract]
Leases	Leases The Company has a property lease for its headquarters location at 301 Binney Street, Cambridge, MA (the “Head Lease”). The Company determines if an arrangement is a lease at the inception of the contract. The asset component of the Company’s operating leases is recorded as operating lease right-of-use (“ROU”) assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion, in the Company’s consolidated balance sheets. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. The Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives received. Lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. Variable lease costs that do not depend on an index or rate are recognized as incurred. ROU assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured ROU assets and the operating lease liabilities are recognized as a gain or loss in operating expenses. The Company reviews any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective ROU asset. On October 18, 2019, the Company entered into an agreement to sublease 15,700 rentable square feet of its Head Lease to a subtenant (the “Sublease Agreement”). Sublease income is recognized on straight-line basis over the term of the sublease agreement and is recorded net of the related rent expense from the Head Lease within interest and other income, net in the condensed consolidated and combined statements of operations and comprehensive loss. In sublease agreements that contain non-monetary consideration, the Company estimates the fair market value of the non-monetary consideration received using market data and recognizes it on a straight-line basis over the sublease term. Variable lease consideration that does not depend on an index or rate is allocated to a non-lease component and is recognized over time in accordance with the pattern of transfer. No modification or impairment was deemed to have occurred by entering into the sublease agreement because the Company was not released, either fully or in part, from its obligations under the Head Lease. See Note 8, Leases. On February 28, 2020 the Company entered into an amendment to its Head Lease at 301 Binney Street in Cambridge, Massachusetts (the “Lease Amendment”). The Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company will continue to lease approximately 74,000 rentable square feet under terms of the amended lease. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a gain of approximately $2.1 million as a component of operating expenses for the three months ended March 31, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases. On September 15, 2020, the Company entered into an amendment to its Head Lease at 301 Binney Street in Cambridge, Massachusetts (the “Second Lease Amendment”). The Second Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 17,000 rentable square feet (the “Surrender Space”). The Surrender Space includes the 15,700 rentable square feet being subleased by the Company to a subtenant. The Company will continue to lease approximately 57,000 rentable square feet under terms of the amended lease. The Second Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a loss of approximately $0.4 million as a component of operating expenses for the three months ended September 30, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases. On September 15, 2020, concurrent with the execution of the Second Lease Amendment, the Company entered into an agreement with its subtenant to terminate the Sublease Agreement of approximately 15,700 rentable square feet (“the Sublease Termination Agreement”). Under the terms of the Sublease Termination Agreement, the former subtenant is obligated to provide licensed rooms and services to the Company free of charge through the original sublease term. Upon termination of the sublease, the Company recognized sublease termination income of approximately $3.1 million related to the prepaid rooms and services, and wrote off the remaining indirect costs from the sublease of approximately $0.2 million, in the condensed consolidated and combined statements of operations and comprehensive loss. See Note 8, Leases.
Paycheck Protection Program Loan	Paycheck Protection Program Loan On April 21, 2020, the Company received loan proceeds in the amount of approximately $3.5 million pursuant to a promissory note agreement (the “Promissory Note”) with a bank under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The Promissory Note has a loan maturity of April 20, 2022, a stated interest rate of 1.0% per annum, and has payments of principal and interest that are due monthly after an initial six-month deferral period where interest accrues, but no payments are due. The Promissory Note provides for customary events of default, including, among others, those relating to failure to make payment when due and breaches of representations. The Company may prepay the principal of the Promissory Note at any time without incurring any prepayment charges. The loan is subject to all the terms and conditions applicable under the PPP and is subject to review by the Small Business Association (the “SBA”) for compliance with program requirements, including the Company’s certification that the current economic uncertainty made the PPP loan request necessary to support ongoing operations. On October 2, 2020, the SBA issued procedural guidance with respect to PPP loans and changes in ownership and the Company believes that it is compliant with respect to the 2020 Equity Private Placement and the ATM Offering. In June 2020, the Payroll Protection Program Flexibility Act (“PPPFA”) was signed into law adjusting certain key terms of loans issued under the PPP. In accordance with the PPPFA, the initial deferral period may be extended from six to up to ten months and the loan maturity may be extended from two to five years. The PPPFA also provided for certain other changes, including the extent to which the loan may be forgiven. The loan’s principal and accrued interest are forgivable to the extent that the proceeds are used for eligible purposes, subject to certain limitations, and that the Company maintains its payroll levels over a twenty-four-week period following the loan date. The loan forgiveness amount may be reduced if the Company terminates employees or reduces salaries during the twenty-four-week period. The Company believes that it has used the proceeds for eligible purposes consistent with the provisions of the PPPFA. However, there can be no assurance that any portion of the loan will be forgiven and that we will not have to repay the loan in full. As the legal form of the Promissory Note is a debt obligation, the Company is accounting for it as debt under Accounting Standards Codification (ASC) 470, Debt and recorded an initial short-term liability of $3.5 million in the condensed consolidated balance sheet upon receipt of the loan proceeds. The Company is accruing interest over the term of the loan and is not imputing additional interest at a market rate because the guidance on imputing interest in ASC 835-30, Interest excludes transactions where interest rates are prescribed by a government agency. A de minimis amount of interest expense has been recognized within interest and other income, net in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and a de minimis amount of interest expense has been accrued within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2020. If any amount of the loan is ultimately forgiven, income from the extinguishment of debt would be recognized as a gain on loan extinguishment in the consolidated statement of operations and comprehensive loss.
New Accounting Pronouncements	New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the condensed consolidated and combined financial statements, the Company did not adopt any new accounting pronouncements during the nine months ended September 30, 2020 that had a material effect on its condensed consolidated and combined financial statements. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”) to provide additional guidance on the adoption of ASU 2016-13, ASU No. 2019-10, Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”), ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU 2019-11”) and ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)("ASU 2020-02"). ASU 2019-04 added Topic 326, Financial Instruments—Credit Losses, and made several amendments to the codification and also modified the accounting for available-for-sale debt securities. ASU 2019-05 provides targeted transition relief by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2019-10 aligned the effective dates of certain major updates not yet effective to conform to the FASB’s new philosophy of staggering major updates between large public companies and all other entities. ASU 2019-11’s major provisions included additional clarifications and practical expedients related to expected recoveries for purchased assets with credit deterioration, troubled debt restructuring, accrued interest receivables, and other areas when adopting ASU 2016-13. ASU 2020-02 provided amendments to the Topic 326 including a new section related to credit losses measured at amortized cost and a clarification to Topic 842 and is effective when adopting other areas of Financial Instruments-Credit Losses Topic 326. As a public business entity that qualifies as a smaller reporting company, ASU 2016-13, ASU 2019-04 and ASU 2019-05 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of these ASUs will have on the Company’s financial position and results of operations. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (“ASU 2018-13”): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”) which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-13 in the first quarter of 2020 and the adoption of this standard did not have a material impact on the Company’s financial position or results of operations. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”). ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40, Intangibles—Goodwill and Other—Internal Use Software (ASC 350-40), to determine which implementation costs to capitalize as assets or expense as incurred. The internal-use software guidance in ASC 350-40 requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and post-implementation stages be expensed as they are incurred. A customer’s accounting for the hosting component of the arrangement is not affected by this guidance. The amendments in ASU 2018-15 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-15 in the first quarter of 2020 and the adoption of this standard did not have a material impact on the Company’s financial position or results of operations. No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s condensed consolidated and combined financial statements upon adoption.

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of financial assets measured at fair value on a recurring basis and indicating the level of the fair value hierarchy

	Fair Value Measurements as of September 30, 2020 Using:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	65,827	$	—	$	—	$	65,827
Cash equivalents	$	65,827	$	—	$	—	$	65,827

	Fair Value Measurements as of December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	93,859	$	—	$	—	$	93,859
Cash equivalents	$	93,859	$	—	$	—	$	93,859

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Schedule of property and equipment, net

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

	September 30,			December 31,
	2020			2019
Laboratory equipment	$	12,288		$	14,505
Software		2,261			2,232
Construction in progress		5			915
Computer and office equipment		1,547			1,890
Leasehold improvements		14,859			13,673
Property and equipment, gross		30,960			33,215
Less: accumulated depreciation and amortization		(20,780	)		(21,602	)
Property and equipment, net	$	10,180		$	11,613

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of supplemental cash flow information related to leases

Supplemental cash flow information related to leases for the nine months ended September 30, 2020 is as follows:

	Nine Months Ended September 30, 2020
Decrease in right-of-use assets related to lease modifications	$	27,333
Decrease in operating lease liabilities due to lease modifications	$	29,002
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	6,076
Weighted-average remaining lease term of operating leases (in years)		8.8
Weighted-average discount rate of operating leases		6.1	%

Future minimum lease payments under non-cancelable operating leases under ASC 842

Future minimum lease payments under non-cancelable operating leases under ASC 842 as of September 30, 2020 are as follows:

	Operating Lease Payments
2020 (remaining three months)	$	1,335
2021		5,742
2022		5,908
2023		6,080
2024		6,256
2025 and thereafter		30,486
Total future minimum lease payments (receipts)		55,807
Less: present value adjustment		12,888
Operating lease liabilities at September 30, 2020		42,919
Less: current portion of operating lease liabilities		3,133
Operating lease liabilities, net of current portion	$	39,786

Loss per share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Numerator:
Net loss (in thousands)	$	(18,812	)	$	(27,317	)	$	(58,574	)	$	(96,953	)

Denominator:
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)		32,096			27,434			29,196			27,380
Net loss per share — basic and diluted	$	(0.59	)	$	(1.00	)	$	(2.01	)	$	(3.54	)

Nature of Business (Details) $ / shares in Units, $ in Thousands					3 Months Ended		9 Months Ended
	Sep. 03, 2020 USD ($)	Jul. 29, 2020 USD ($) Investor $ / shares shares	Apr. 02, 2019 USD ($) shares	Apr. 01, 2019	Sep. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Jul. 24, 2020 USD ($)	Nov. 15, 2019 employee	May 03, 2019 employee
Nature of Business
Common stock dividend issued (shares of Cyclerion per ten shares of Ironwood)				0.1
Gross proceeds from 2020/2019 private placement							$ 24,250	$ 175,000
Issuance of common stock - 2019/2020 private placement, net of fees					$ 24,250	$ 164,622
2020/2019 Equity Private Placement
Nature of Business
Number of shares issued in private placement \| shares		6,062,500	11,817,165
Gross proceeds from 2020/2019 private placement		$ 24,300	$ 175,000
Net proceeds from issuance of shares to accredited investors		$ 24,300	$ 165,000
Number of investors for private placement \| Investor		2
Common Stock Purchase Agreement
Nature of Business
Purchase price \| $ / shares		$ 4.00
IPO
Nature of Business
Maximum amount of Aggregate initial offering price									$ 150,000
ATM Offering \| Jefferies LLC
Nature of Business
Number of shares issued in private placement \| shares							0
Cash commission of gross proceeds of sales of common stock, percentage	3.00%
ATM Offering \| Maximum \| Jefferies LLC
Nature of Business
Issuance of common stock - 2019/2020 private placement, net of fees	$ 50,000
Cyclerion GmbH
Nature of Business
Number of employees \| employee											1
Cyclerion Securities Corporation
Nature of Business
Number of employees \| employee										0

Summary of Significant Accounting Policies (Details) $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 15, 2020 USD ($) ft²	Apr. 21, 2020 USD ($)	Feb. 28, 2020 USD ($) ft²	Sep. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Oct. 18, 2019 ft²	Apr. 01, 2019 ft²
Leases
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Gain (loss) on lease modification				$ (444)		$ 1,669
Sublease termination agreement prepaid rooms and services	$ 4,400
Proceeds from short-term note payable						3,509
Short-term liability				3,500		3,500
PPP Loan
Leases
Proceeds from short-term note payable		$ 3,500
Head Lease
Leases
Space subleased to third party (in square feet) \| ft²							15,700
Rented space (in square feet) \| ft²								114,000
Lease Amendment
Leases
Rentable space terminated from lease agreement (in square feet) \| ft²			40,000
Rented space (in square feet) \| ft²			74,000
Gain (loss) on lease modification					$ 2,100	2,100
ROU asset, impairment loss			$ 0
Second Lease Amendment
Leases
Space subleased to third party (in square feet) \| ft²	15,700
Rentable space terminated from lease agreement (in square feet) \| ft²	17,000
Rented space (in square feet) \| ft²	57,000
Gain (loss) on lease modification				$ (400)		$ (400)
ROU asset, impairment loss	$ 0
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Sublease Termination Agreement
Leases
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Gain (loss) on lease modification	$ 3,100
Sublease termination agreement prepaid rooms and services	3,100
Write off lease unamortized direct cost	$ 200

Related Party Transactions (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended			9 Months Ended
	Apr. 02, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Related Party Transaction [Line Items]
Revenue from related party		$ 400	$ 1,398		$ 2,163	$ 3,026
General and administrative		8,033	7,119		21,551	27,019
Other Related Party Transactions
Related Party Transaction [Line Items]
Amounts due to related party		400			400		$ 400
Payments to provide research and development transaction support services		400			1,000
Ironwood \| Transition services agreements
Related Party Transaction [Line Items]
Related party expense			100			100
Ironwood \| Development agreement
Related Party Transaction [Line Items]
Revenue from related party		400	1,400		2,200	$ 3,000
Amounts due from related party		400			400		1,500
Ironwood \| Separation agreement
Related Party Transaction [Line Items]
General and administrative		600			700
Payments for tenant improvements			$ 1,300
Amounts due to related party		$ 100			$ 100		$ 100
Ironwood \| Corporate costs
Related Party Transaction [Line Items]
Related party expense				$ 6,800
Peter Hecht \| 2020/2019 Equity Private Placement
Related Party Transaction [Line Items]
Number of shares of Ironwood common stock donated to American Endowment Foundation	2.5
American Endowment Foundation \| 2020/2019 Equity Private Placement
Related Party Transaction [Line Items]
Investment in common stock by related party	$ 34,000
Mark Currie \| 2020/2019 Equity Private Placement
Related Party Transaction [Line Items]
Investment in common stock by related party	$ 4,000

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property and Equipment
Property and equipment. gross	$ 30,960		$ 30,960		$ 33,215
Less: accumulated depreciation and amortization	(20,780)		(20,780)		(21,602)
Property and equipment, net	10,180		10,180		11,613
Depreciation and amortization	600	$ 700	1,827	$ 2,047
Loss on disposal of property and equipment			(205)	$ (76)
Operating expenses
Property and Equipment
Loss on disposal of property and equipment	200		200
Laboratory equipment
Property and Equipment
Property and equipment. gross	12,288		12,288		14,505
Software
Property and Equipment
Property and equipment. gross	2,261		2,261		2,232
Construction in progress
Property and Equipment
Property and equipment. gross	5		5		915
Leasehold improvements					900
Computer and office equipment
Property and Equipment
Property and equipment. gross	1,547		1,547		1,890
Leasehold improvements
Property and Equipment
Property and equipment. gross	$ 14,859		14,859		$ 13,673
Fixed assets put into service during the period			$ 1,500

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accrued Liabilities And Other Liabilities [Abstract]
Accrued incentive compensation	$ 2,598	$ 3,767
Salaries	1,024	1,730
Accrued vacation	768	969
Professional fees	872	441
Accrued severance and benefit costs		2,009
Other	343	404
Accrued expenses and other current liabilities	$ 5,605	$ 9,320

Leases - Summary (Details) $ in Thousands				3 Months Ended		9 Months Ended
Leases - Summary (Details) $ in Thousands	Sep. 15, 2020 USD ($) ft²	Feb. 28, 2020 USD ($) ft²	Apr. 01, 2019 USD ($) ft² item	Sep. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Oct. 18, 2019 ft²
Leases
Lease liability				$ 42,919		$ 42,919
Operating lease right-of-use asset				44,396		44,396	$ 68,137
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Decrease in right-of-use assets related to lease modification						27,333
Decrease in operating lease liabilities due to lease modification						29,002
Gain (loss) on lease modification				(444)		1,669
Current portion of operating lease liabilities				3,133		3,133	3,420
Noncurrent lease liability				39,786		39,786	70,500
Total lease costs				2,000		6,900
Head Lease
Leases
Rented space (in square feet) \| ft²			114,000
Term of lease			123 months
Number of extension option \| item			2
Renewal term			5 years
Letter of credit posted with the landlord as a security deposit			$ 7,700
Annual base rent						11,000
Increase in base rent on a yearly basis (as a percent)			3.00%
Abatement of base rent			$ 2,700
Incremental borrowing rate (as a percent)			10.90%
Lease liability			$ 71,300
Tenant improvement allowance			2,300
Operating lease right-of-use asset			$ 71,300
Space subleased to third party (in square feet) \| ft²								15,700
Head Lease \| Property, plant and equipment
Leases
Tenant improvement allowance				2,300		2,300	2,300
Lease Amendment
Leases
Rented space (in square feet) \| ft²		74,000
Letter of credit posted with the landlord as a security deposit		$ 5,000
Incremental borrowing rate (as a percent)		9.70%
Rentable space terminated from lease agreement (in square feet) \| ft²		40,000
Decrease in security deposit		$ 2,700
Decrease in remaining operating lease payments		41,900
Cash paid for lease termination fees		6,300
Cash paid for initial direct costs of lease modification		200
Decrease in right-of-use assets related to lease modification		21,400
Decrease in operating lease liabilities due to lease modification		$ 23,500
Gain (loss) on lease modification					$ 2,100	2,100
Second Lease Amendment
Leases
Rented space (in square feet) \| ft²	57,000
Letter of credit posted with the landlord as a security deposit				3,800		3,800
Incremental borrowing rate (as a percent)	6.10%
Operating lease right-of-use asset				44,400		44,400	68,100
Rentable space terminated from lease agreement (in square feet) \| ft²	17,000
Decrease in security deposit						1,200
Decrease in remaining operating lease payments	$ 16,900
Cash paid for lease termination fees	0
Cash paid for initial direct costs of lease modification	0
Decrease in right-of-use assets related to lease modification	5,900
Decrease in operating lease liabilities due to lease modification	$ 5,500
Gain (loss) on lease modification				(400)		(400)
Space subleased to third party (in square feet) \| ft²	15,700
Current portion of operating lease liabilities				3,100		3,100	3,400
Noncurrent lease liability				39,800		39,800	$ 70,500
Variable lease costs				$ 400		$ 1,900

Leases - Sublease as Lessor (Details) $ in Thousands			3 Months Ended	9 Months Ended
Leases - Sublease as Lessor (Details) $ in Thousands	Sep. 15, 2020 USD ($) ft²	Oct. 18, 2019 USD ($) ft² item	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Sublease as lessor
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Sublease termination agreement estimated fair value of rooms	$ 1,500
Sublease termination agreement estimated fair value of services	2,900
Sublease termination agreement prepaid rooms and services	$ 4,400
Other current assets			$ 1,666	$ 1,666	$ 2,862
Gain (loss) on lease modification			(444)	1,669
Gross sublease income, net of rent expense			400	1,500
Net sublease income			100	300
Head Lease
Sublease as lessor
Space subleased to third party (in square feet) \| ft²		15,700
Sublease, Annual base rent		$ 1,500
Sublease, Increase in base rent over the term of the lease (as a percent)		3.00%
Sublease, Abatement of base rent		$ 700
Sublease, Abatement period		6 months
Sublease, Number of extension options \| item		0
Sublease, Initial security deposit received		$ 500
Sublease, Additional security deposit to be received		$ 400
Sublease, additional security deposit period		9 months
Sublease Termination Agreement
Sublease as lessor
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Sublease termination agreement prepaid rooms and services	$ 3,100
Other current assets			1,500	1,500
Other assets			$ 2,900	$ 2,900
Gain (loss) on lease modification	3,100
Rent receivables outstanding from subtenant	1,300
Write off lease unamortized direct cost	$ 200

Leases - Future minimum lease operating payments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Future minimum lease payments under non-cancelable operating leases under ASC 842
2020 (remaining three months)	$ 1,335
2021	5,742
2022	5,908
2023	6,080
2024	6,256
2025 and thereafter	30,486
Total future minimum lease payments (receipts)	55,807
Less: present value adjustment	12,888
Operating lease liabilities	42,919
Less: current portion of operating lease liabilities	3,133	$ 3,420
Operating lease liabilities, net of current portion	$ 39,786	$ 70,500

Share-based Compensation Plans (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) employee $ / shares shares	Sep. 30, 2019 USD ($)
Share-based Compensation Plans
Number of employees impacted \| employee			143
Share-based compensation	$ 3,796	$ 4,948	$ 11,784	$ 15,160
Research and development
Share-based Compensation Plans
Share-based compensation	1,784	2,192	5,584	6,774
General and administrative
Share-based Compensation Plans
Share-based compensation	2,012	$ 2,756	6,200	$ 8,386
Restricted Stock Units
Share-based Compensation Plans
Incremental compensation expense due to modification			0
Unrecognized share-based compensation expense	$ 3,800		$ 3,800
Expected period to recognize the expense			2 years 3 days
Vested stock options
Share-based Compensation Plans
Incremental compensation expense due to modification			$ 300
Unvested stock options
Share-based Compensation Plans
Incremental compensation expense due to modification			$ 7,500
Stock options
Share-based Compensation Plans
Granted (in shares) \| shares	0		270,846
Weighted average grant date fair value per option share \| $ / shares			$ 2.15
Unrecognized share-based compensation expense	$ 16,500		$ 16,500
Expected period to recognize the expense			2 years 4 months 20 days
Performance stock options
Share-based Compensation Plans
Unrecognized share-based compensation expense	$ 300		$ 300
Expected period to recognize the expense			3 years 7 months 6 days

Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net loss	$ (18,812)	$ (19,534)	$ (20,228)	$ (27,317)	$ (32,254)	$ (37,381)	$ (58,574)	$ (96,953)
Denominator:
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)	32,096,000			27,434,000			29,196,000	27,380,000
Net loss per share — basic and diluted	$ (0.59)			$ (1.00)			$ (2.01)	$ (3.54)
Stock options
Denominator:
Anti-dilutive securities excluded from the calculation of diluted loss per share	7,439,901						7,439,901
Restricted Stock Units
Denominator:
Anti-dilutive securities excluded from the calculation of diluted loss per share	428,077						428,077

- Definition

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

+ References + Details

2019 Workforce Reduction (Details) $ in Thousands		3 Months Ended	9 Months Ended	12 Months Ended
2019 Workforce Reduction (Details) $ in Thousands	Oct. 30, 2019 USD ($) employee	Mar. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Restructuring Cost and Reserve [Line Items]
Beginning of period		$ 2,009	$ 2,009
Charges			158
Amount paid			2,137
Adjustments			(30)
End of period			0	$ 2,009
October 2019 Reduction
Restructuring Cost and Reserve [Line Items]
Beginning of period		2,009	2,009
Charges			158
Amount paid			2,137
Adjustments			(30)
End of period			$ 0	2,009
Current workforce reductions \| October 2019 Reduction
Restructuring Cost and Reserve [Line Items]
Reduction in workforce, number of employees \| employee	30
Restructuring Costs	$ 3,000
Severance and benefits costs		$ 200		$ 2,800

Condensed Consolidated and Combined Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated and combined balance sheets
Cash and cash equivalents	$ 66,840	$ 117,034
Restricted cash	3,837	7,726
Total cash, cash equivalents and restricted cash	$ 70,677	$ 124,760

Leases - Sublease as Lessee (Details) $ in Millions	3 Months Ended	9 Months Ended
Leases - Sublease as Lessee (Details) $ in Millions	Mar. 31, 2019 ft²	Sep. 30, 2019 USD ($)
Leases
Rent expense related to sublease \| $		$ 0.2
Ironwood
Leases
Rentable square feet \| ft²	24,000
Sublease initial term	1 month
Operating sublease, option to extend	true
Subleased term	1 month 15 days

Defined Contribution Plan (Details) - USD ($)	3 Months Ended		9 Months Ended
Defined Contribution Plan (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Defined Contribution Plan
401 (k) Savings Plan	us-gaap:QualifiedPlanMember		us-gaap:QualifiedPlanMember
Matching contribution (as a percent of employee's contributions)			75.00%
Maximum amount of employer matching contribution			$ 6,000
Compensation expense related to the defined contribution 401(k) Savings Plan	$ 400,000	$ 100,000	$ 400,000	$ 500,000
Minimum
Defined Contribution Plan
Percent of compensation eligible employees may elect to contribute			1.00%
Maximum
Defined Contribution Plan
Percent of compensation eligible employees may elect to contribute			100.00%

Subsequent Events (Details) - Current workforce reductions - November 2020 Workforce Reduction - Subsequent Event $ in Millions	Nov. 05, 2020 USD ($) employee
Subsequent Event [Line Items]
Reduction in workforce, number of employees \| employee	48
Severance and benefits costs \| $	$ 5.0

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	33,961,555	27,598,133
Common stock, shares outstanding	33,961,555	27,598,133

Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Cash equivalents:
Total cash equivalents	$ 65,827	$ 93,859
Level 1
Cash equivalents:
Total cash equivalents	65,827	93,859
Money market funds
Cash equivalents:
Total cash equivalents	65,827	93,859
Money market funds \| Level 1
Cash equivalents:
Total cash equivalents	$ 65,827	$ 93,859