Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | TG THERAPEUTICS, INC. | |
Entity Central Index Key | 1,001,316 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | TGTX | |
Entity Common Stock, Shares Outstanding | 66,775,146 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 95,637,572 | $ 25,031,280 |
Short-term investment securities | 13,823,332 | 19,853,860 |
Interest receivable | 22,824 | 83,852 |
Prepaid research and development | 8,422,375 | 5,678,755 |
Other current assets | 1,057,715 | 216,397 |
Total current assets | 118,963,818 | 50,864,144 |
Restricted cash | 584,213 | 583,208 |
Leasehold interest, net | 2,491,211 | 2,042,281 |
Equipment, net | 307,732 | 328,148 |
Goodwill | 799,391 | 799,391 |
Other assets | 110,067 | 164,375 |
Total assets | 123,256,432 | 54,781,547 |
Current liabilities: | ||
Accounts payable and accrued expenses | 18,916,064 | 15,267,668 |
Accrued compensation | 483,555 | 1,389,516 |
Current portion of deferred revenue | 152,381 | 152,381 |
Notes payable | 174,657 | 68,875 |
Total current liabilities | 19,726,657 | 16,878,440 |
Deferred rent | 1,307,063 | 816,257 |
Deferred revenue, net of current portion | 1,180,953 | 1,219,048 |
Total liabilities | 22,214,673 | 18,913,745 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value per share (10,000,000 shares authorized, none issued and outstanding as of March 31, 2017 and December 31, 2016) | 0 | 0 |
Common stock, $0.001 par value per share (150,000,000 shares authorized, 66,816,455 and 56,820,423 shares issued, 66,775,146 and 56,779,114 shares outstanding at March 31, 2017 and December 31, 2016, respectively) | 66,817 | 56,820 |
Additional paid-in capital | 365,323,608 | 272,432,139 |
Treasury stock, at cost, 41,309 shares at March 31, 2017 and December 31, 2016 | (234,337) | (234,337) |
Accumulated deficit | (264,114,329) | (236,386,820) |
Total stockholders’ equity | 101,041,759 | 35,867,802 |
Total liabilities and stockholders’ equity | $ 123,256,432 | $ 54,781,547 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 66,816,455 | 56,820,423 |
Common stock, shares outstanding | 66,775,146 | 56,779,114 |
Treasury stock, shares | 41,309 | 41,309 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
License revenue | $ 38,095 | $ 38,095 |
Research and development: | ||
Noncash compensation | 2,306,099 | 386,925 |
Other research and development | 20,375,794 | 11,230,415 |
Total research and development | 22,681,893 | 11,617,340 |
General and administrative: | ||
Noncash compensation | 3,689,356 | 1,312,040 |
Other general and administrative | 1,333,268 | 1,100,871 |
Total general and administrative | 5,022,624 | 2,412,911 |
Total costs and expenses | 27,704,517 | 14,030,251 |
Operating loss | (27,666,422) | (13,992,156) |
Other (income) expense: | ||
Interest income | (44,696) | (84,862) |
Other (income) expense | 105,783 | (58,632) |
Total other (income) expense, net | 61,087 | (143,494) |
Net loss | $ (27,727,509) | $ (13,848,662) |
Basic and diluted net loss per common share | $ (0.52) | $ (0.28) |
Weighted average shares used in computing basic and diluted net loss per common share | 53,157,851 | 48,908,278 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 56,820 | $ 272,432,139 | $ (234,337) | $ (236,386,820) | $ 35,867,802 |
Balance (in shares) at Dec. 31, 2016 | 56,820,422 | 41,309 | |||
Issuance of common stock in connection with exercise of warrants | $ 888 | 2,142,196 | 2,143,084 | ||
Issuance of common stock in connection with exercise of warrants (in shares) | 887,585 | ||||
Issuance of restricted stock | $ 111 | (111) | |||
Issuance of restricted stock (in shares) | 111,254 | ||||
Forfeiture of restricted stock | $ (4) | 4 | |||
Forfeiture of restricted stock (in shares) | (4,495) | ||||
Issuance of common stock in public offering (net of offering costs of $3,589,875) | $ 5,898 | 53,713,519 | 53,719,417 | ||
Issuance of common stock in public offering (net of offering costs of $3,589,875) (in shares) | 5,897,436 | ||||
Issuance of common stock in At-the-Market offering (net of offering costs of $554,067) | $ 3,104 | 31,040,406 | 31,043,510 | ||
Issuance of common stock in At-the-Market offering (net of offering costs of $554,067) (in shares) | 3,104,253 | ||||
Compensation in respect of restricted stock granted to employees, directors and consultants | 5,995,455 | 5,995,455 | |||
Net loss | (27,727,509) | (27,727,509) | |||
Balance at Mar. 31, 2017 | $ 66,817 | $ 365,323,608 | $ (234,337) | $ (264,114,329) | $ 101,041,759 |
Balance (in shares) at Mar. 31, 2017 | 66,816,455 | 41,309 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (27,727,509) | $ (13,848,662) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Noncash stock compensation expense | 5,995,455 | 1,698,965 |
Depreciation | 20,416 | 6,380 |
Amortization of premium on investment securities | 30,528 | 128,329 |
Change in fair value of notes payable and accrued interest | 105,782 | (58,632) |
Changes in assets and liabilities: | ||
Increase in restricted cash | (1,005) | (1,008) |
Increase in prepaid research and development and other current assets | (3,584,938) | (2,250,490) |
Decrease (increase) in leasehold interest | 19,587 | (1,151,163) |
Decrease in accrued interest receivable | 61,028 | 21,915 |
Decrease in other assets | 242,372 | 5,341 |
Increase (decrease) in accounts payable and accrued expenses | 2,551,726 | (1,575,974) |
Increase in deferred rent | 22,289 | 389,554 |
Decrease in deferred revenue | (38,095) | (38,096) |
Net cash used in operating activities | (22,302,364) | (16,673,541) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of equipment | 0 | (282,261) |
Investment in held-to-maturity securities | 0 | (10,641,270) |
Proceeds from maturity of short-term securities | 6,000,000 | 9,000,000 |
Net cash provided by (used in) investing activities | 6,000,000 | (1,923,531) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the exercise of warrants | 2,143,084 | 22,163 |
Proceeds from sale of common stock, net | 84,765,572 | 0 |
Deferred financing costs paid | 0 | (8,000) |
Net cash provided by financing activities | 86,908,656 | 14,163 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 70,606,292 | (18,582,909) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 25,031,280 | 55,061,329 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 95,637,572 | 36,478,420 |
NONCASH TRANSACTIONS | ||
Reclassification of deferred financing costs to additional paid-in capital | (2,645) | 0 |
Accrued financing costs | $ 190,709 | $ 0 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Description of Business We are a biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases. Currently, we are developing two therapies targeting hematologic malignancies. TG-1101 (ublituximab) is a novel, glycoengineered monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes. We are also developing TGR-1202, an orally available PI3K delta inhibitor. The delta isoform of PI3K is strongly expressed in cells of hematopoietic origin and is believed to be important in the proliferation and survival of B-lymphocytes. Both TG-1101 and TGR-1202 are in clinical development for patients with hematologic malignancies, with TG-1101 also in clinical development for autoimmune disorders. The Company also has pre-clinical programs to develop IRAK4 (interleukin-1 receptor-associated kinase 4) inhibitors, BET (Bromodomain and Extra Terminal) inhibitors, and anti-PD-L1 and anti-GITR antibodies. We also actively evaluate complementary products, technologies and companies for in-licensing, partnership, acquisition and/or investment opportunities. To date, we have not received approval for the sale of any of our drug candidates in any market and, therefore, have not generated any product sales from our drug candidates. The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Exchange Act. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the condensed consolidated financial statements have been included. Nevertheless, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016. The accompanying condensed December 31, 2016 balance sheet has been derived from these statements. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. Liquidity and Capital Resources We have incurred operating losses since our inception, expect to continue to incur operating losses for the foreseeable future, and may never attain profitable operations. As of March 31, 2017, we have an accumulated deficit of approximately $264.1 million. Our major sources of cash have been proceeds from the private placement and public offering of equity securities. We have not yet commercialized any of our drug candidates and cannot be sure if we will ever be able to do so. Even if we commercialize one or more of our drug candidates, we may not become profitable. Our ability to achieve profitability depends on many factors, including our ability to obtain regulatory approval for our drug candidates; successfully completing any post-approval regulatory obligations; and successfully commercializing our drug candidates alone or with one or more partners. We may continue to incur substantial operating losses even if we begin to generate revenues from our drug candidates. As of March 31, 2017, we had approximately $109.5 million in cash, cash equivalents, investment securities, and interest receivable, which we believe will be sufficient to fund the Company’s planned operations through 2018. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of clinical trials for our drug candidates. We are dependent upon significant future financing to provide the cash necessary to execute our current strategic plan, including the commercialization of any of our drug candidates. Our common stock is listed on the Nasdaq Capital Market and trades under the symbol “TGTX.” Recently Issued Accounting Standards In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, ASU 2017-04: ● Clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units in connection with an entity’s testing of reporting units for goodwill impairment. ● Clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ● Makes minor changes to the overview and background sections of certain Accounting Standards Codification (“ASC” or “Codification”) subtopics and topics as part of the Board’s initiative to unify and improve those sections throughout the Codification. ASU 2017-04 is effective prospectively for annual and interim periods beginning on or after December 15, 2019, and early adoption is permitted on testing dates after January 1, 2017. We are currently evaluating the impact the adoption of ASU 2017-04 will have on our consolidated financial statements. Other pronouncements issued by the FASB or other authoritative accounting standards group with future effective dates are either not applicable or not significant to our consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the applicable reporting period. Actual results could differ from those estimates. Such differences could be material to the consolidated financial statements. Cash and Cash Equivalents We treat liquid investments with original maturities of three months or less when purchased as cash and cash equivalents. Restricted Cash We record cash pledged or held in trust as restricted cash. As of March 31, 2017 and December 31, 2016, we have approximately $0.6 million of restricted cash pledged to secure a line of credit as a security deposit for an Office Agreement Investment Securities Investment securities at March 31, 2017 and December 31, 2016 consist of short-term government securities. We classify these securities as held-to-maturity. Held-to-maturity securities are those securities in which we have the ability and intent to hold the security until maturity. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest method. A decline in the market value of any investment security below cost, that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The impairment is charged to operations and a new cost basis for the security is established. Other-than-temporary impairment charges would be included in interest and other (income) expense, net. Dividend and interest income are recognized when earned. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents and short-term investments with high-credit quality financial institutions. At times, such amounts may exceed federally-insured limits. Revenue Recognition We recognize license revenue in accordance with the revenue recognition guidance of the FASB Codification. We analyze each element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include payments to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements unless the fee is in exchange for products delivered or services rendered that represent the culmination of a separate earnings process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement of specified milestones only if (1) the milestone payment is non-refundable, (2) substantive effort is involved in achieving the milestone, (3) the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement of the milestone, and (4) the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone payment and recognize it as revenue over the estimated period of performance under the contract. Research and Development Costs Generally, research and development costs are expensed as incurred. Non-refundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. We make estimates of costs incurred in relation to external clinical research organizations, or CROs, and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued liability balance and expense in any accounting period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract. Prepaid research and development in our consolidated balance sheets includes, among other things, certain costs to third party service providers related to development and manufacturing services as well as clinical development. These agreements often require payments in advance of services performed or goods received. Accordingly, as of March 31, 2017 and December 31, 2016, we recorded approximately $8.4 million and $5.7 million, respectively, in prepaid research and development related to such advance agreements. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. If the likelihood of realizing the deferred tax assets or liability is less than “more likely than not,” a valuation allowance is then created. Stock-Based Compensation We recognize all stock-based payments to employees and non-employee directors (as compensation for service) as noncash compensation expense in the condensed consolidated financial statements based on the fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For stock-based payments to consultants and other third-parties (including related parties), noncash compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties (including related parties) are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date. In addition, because some of the options, restricted stock and warrants issued to employees, consultants and other third-parties vest upon achievement of certain milestones, the total expense is uncertain. Compensation expense for such awards that vest upon the achievement of milestones is recognized when the achievement of such milestones becomes probable. Basic and Diluted Net Loss Per Common Share Basic net loss per share of our common stock is calculated by dividing net loss applicable to the common stock by the weighted average number of our common stock outstanding for the period. Diluted net loss per share of common stock is the same as basic net loss per share of common stock since potentially dilutive securities from stock options, stock warrants and convertible preferred stock would have an antidilutive effect either because we incurred a net loss during the periods presented or because such potentially dilutive securities were out of the money and the Company realized net income during the periods presented. The amounts of potentially dilutive securities excluded from the calculation were 3,634,008 and 6,869,500 for the three months ended March 31, 2017 and 2016, respectively. The following outstanding shares of potentially dilutive securities were excluded from the computation of net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: Three Months Ended March 31, 2017 2016 Unvested restricted stock 3,619,016 5,674,415 Warrants -- 1,177,137 Shares issuable upon note conversion 14,992 17,948 Total 3,634,008 6,869,500 Long-Lived Assets and Goodwill Long-lived assets are reviewed for potential impairment when circumstances indicate that the carrying value of long-lived tangible and intangible assets with finite lives may not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria as well as qualitative measures. If an analysis is necessitated by the occurrence of a triggering event, we make certain assumptions in determining the impairment amount. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized. Goodwill is reviewed for impairment annually, or earlier when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process. The first step compares the fair value of the reporting unit with the unit's carrying value, including goodwill. When the carrying value of the reporting unit is greater than fair value, the unit’s goodwill may be impaired, and the second step must be completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the carrying amount of the unit’s goodwill. If the carrying amount is greater than the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. We will continue to perform impairment tests annually, at December 31, and whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. Rent Expense and Deferred Rent Rent expense and lease incentives, including landlord construction allowances, are recognized on a straight-line basis over the lease term, commencing generally on the date the Company takes possession of the leased property. The Company records lease incentives as deferred rent and recognizes the lease incentives as reductions of rental expense. The unamortized portion of deferred rent is included in deferred rent in the condensed consolidated balance sheets. |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 3 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | The following tables summarize our cash and cash equivalents at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Money market funds $ 15,106,834 $ 20,978,947 Checking and bank deposits 80,530,738 4,052,333 Total $ 95,637,572 $ 25,031,280 |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | Our investments as of March 31, 2017 and December 31, 2016 are classified as held-to-maturity. Held-to-maturity investments are recorded at amortized cost. The following tables summarize our investment securities at March 31, 2017 and December 31, 2016: March 31, 2017 Amortized cost, as adjusted Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Short-term investments: Obligations of domestic governmental agencies (maturing between April 2017 and September 2017) (held-to-maturity) $ 13,823,332 $ 607 $ 5,255 $ 13,818,684 Total short-term investment securities $ 13,823,332 $ 607 $ 5,255 $ 13,818,684 December 31, 2016 Amortized cost, as adjusted Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Short-term investments: Obligations of domestic governmental agencies (maturing between February 2017 and September 2017) (held-to-maturity) $ 19,853,860 $ 3,270 $ 2,492 $ 19,854,638 Total short-term investment securities $ 19,853,860 $ 3,270 $ 2,492 $ 19,854,638 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | We measure certain financial assets and liabilities at fair value on a recurring basis in the condensed consolidated financial statements. The fair value hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: ● Level 1 – quoted prices in active markets for identical assets and liabilities; ● Level 2 – inputs other than Level 1 quoted prices that are directly or indirectly observable; and ● Level 3 – unobservable inputs that are not corroborated by market data. As of March 31, 2017 and December 31, 2016, the fair values of cash and cash equivalents, restricted cash, and notes and interest payable, approximate their carrying value. At the time of our merger (we were then known as Manhattan Pharmaceuticals, Inc.) with Ariston Pharmaceuticals, Inc. (“Ariston”) in March 2010, Ariston issued $15.5 million of five-year 5% notes payable (the “5% Notes”) in satisfaction of several note payable issuances. The 5% Notes and accrued and unpaid interest thereon are convertible at the option of the holder into common stock at the conversion price of $1,125 per share. Ariston agreed to make quarterly payments on the 5% Notes equal to 50% of the net product cash flow received from the exploitation or commercialization of Ariston’s product candidates, AST-726 and AST-915. We have no obligations under the 5% Notes aside from (a) 50% of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and (b) the conversion feature, discussed above. The cumulative liability to the Ariston subsidiary including accrued and unpaid interest of the 5% Notes was approximately $16.9 million at March 31, 2017 and $16.7 million at December 31, 2016. In December 2011, we elected the fair value option for valuing the 5% Notes. The fair value option was elected in order to reflect in our financial statements the assumptions that market participants use in evaluating these financial instruments. As of December 31, 2013, as a result of expiring intellectual property rights and other factors, it was determined that net product cash flows from AST-726 were unlikely. As we have no other obligations under the 5% Notes aside from the net product cash flows and the conversion feature, the conversion feature was used to estimate the 5% Notes’ fair value as of March 31, 2017 and December 31, 2016. The assumptions, assessments and projections of future revenues are subject to uncertainties, difficult to predict, and require significant judgment. The use of different assumptions, applying different judgment to inherently subjective matters and changes in future market conditions could result in significantly different estimates of fair value and the differences could be material to our condensed consolidated financial statements. The following tables provide the fair value measurements of applicable financial liabilities as of March 31, 2017 and December 31, 2016: Financial liabilities at fair value as of March 31, 2017 Level 1 Level 2 Level 3 Total 5% Notes $ -- $ -- $ 174,657 $ 174,657 Total $ -- $ -- $ 174,657 $ 174,657 Financial liabilities at fair value as of December 31, 2016 Level 1 Level 2 Level 3 Total 5% Notes $ -- $ -- $ 68,875 $ 68,875 Total $ -- $ -- $ 68,875 $ 68,875 The Level 3 amounts above represent the fair value of the 5% Notes and related accrued interest. The following table summarizes the changes in Level 3 instruments during the three months ended March 31, 2017: Fair value at December 31, 2016 $ 68,875 Interest accrued on face value of 5% Notes 202,748 Change in fair value of Level 3 liabilities (96,966 ) Fair value at March 31, 2017 $ 174,657 The change in the fair value of the Level 3 liabilities is reported in other (income) expense in the accompanying condensed consolidated statements of operations. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | Preferred Stock Our amended and restated certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, $0.001 par value, with rights senior to those of our common stock, issuable in one or more series. Upon issuance, we can determine the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. Common Stock Our amended and restated certificate of incorporation authorizes the issuance of up to 150,000,000 shares of $0.001 par value common stock. In December 2014, we filed a shelf registration statement on Form S-3 (the "2015 S-3"), which was declared effective in January 2015. Under the 2015 S-3, the Company may sell up to a total of $250 million of its securities. In connection with the 2015 S-3, we amended our 2013 At-the-Market Issuance Sales Agreement with MLV & Co. LLC (the "2015 ATM") such that we may issue and sell additional shares of our common stock, having an aggregate offering price of up to $175.0 million, from time to time through MLV & Co. LLC ("MLV") and FBR Capital Markets & Co. ("FBR", each of MLV and FBR individually an "Agent" and collectively the "Agents"), acting as the sales agents. Under the 2015 ATM we pay the Agents a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Agents. During the three months ended March 31, 2017, we sold a total of 3,104,253 shares of common stock under the 2015 ATM for total gross proceeds of approximately $31.6 million at an average selling price of $10.18 per share, resulting in net proceeds of approximately $31.0 million after deducting commissions and other transaction costs. On March 9, 2017, we announced the pricing of an underwritten public offering of 5,128,206 shares of our common stock (plus a 30-day underwriter option to purchase up to an additional 769,230 shares of common stock, which was exercised) at a price of $9.75 per share. Net proceeds from this offering, including the overallotment, were approximately $54 million, net of underwriting discounts and offering expenses of approximately $3.5 million. The offering closed on March 14, 2017. The 2015 S-3 is currently our only active shelf registration statement. After deducting shares already sold, including under the 2015 ATM, there is approximately $88.2 million of common stock that remains available for sale under the 2015 S-3. We may offer the securities under the 2015 S-3 from time to time in response to market conditions or other circumstances if we believe such a plan of financing is in the best interests of our stockholders. We believe that the 2015 S-3 provides us with the flexibility to raise additional capital to finance our operations as needed. Equity Incentive Plans The TG Therapeutics, Inc. Amended and Restated 2012 Incentive Plan (“2012 Incentive Plan”) was approved by stockholders in June 2015. As of March 31, 2017, no options were outstanding and up to an additional 2,180,005 shares may be issued under the 2012 Incentive Plan. Effective as of January 1, 2017, we entered into an amendment (the “Amendment”) to the employment agreement entered as of December 15, 2011 (together with the Amendment, the “Employment Agreement”) with Michael S. Weiss, our Executive Chairman and interim Chief Executive Officer and President of the Company. Under the Amendment, Mr. Weiss will remain as Chief Executive Officer and President, removing the interim status. Simultaneously, we entered into a Strategic Advisory Agreement (the “Advisory Agreement”) with Caribe BioAdvisors, LLC (the “Advisor”) owned by Mr. Weiss to provide the services of Mr. Weiss as Chairman of the Board and as Executive Chairman. As part of the Amendment, Mr. Weiss also agreed to forfeit 3,381,866 restricted shares previously granted under the Employment Agreement that were predominantly subject to time-based vesting over the next three years. Simultaneously, (i) Mr. Weiss was issued 418,371 restricted shares under the Employment Agreement that vest in 2018 and 2019 and (ii) the Advisor was issued 2,960,000 restricted shares under the Advisory Agreement that vest on market capitalization thresholds ranging from $375 million to $750 million. Collectively, Mr. Weiss and the Advisor were granted fewer shares than Mr. Weiss forfeited. In accordance with GAAP, there was no incremental stock compensation expense recognition as a result of the modification. Restricted Stock Certain employees, directors and consultants have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted share activity for the three months ended March 31, 2017: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2016 8,642,055 $ 7.20 Granted 111,254 4.80 Vested (3,629,798 ) 5.10 Forfeited (4,495 ) 4.65 Outstanding at March 31, 2017 5,119,016 $ 6.21 Total expense associated with restricted stock grants was approximately $6.0 million and $1.7 million during the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, there was approximately $9.6 million of total unrecognized compensation cost related to unvested time-based restricted stock, which is expected to be recognized over a weighted average period of 1.4 years. This amount does not include, as of March 31, 2017, 305,000 shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones; and 2,397,583 shares of restricted stock outstanding issued to non-employees, the expense for which is determined each reporting period at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached for milestone awards, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. Warrants The following table summarizes warrant activity for the three months ended March 31, 2017: Warrants Weighted average exercise price Aggregate Intrinsic Value Outstanding at December 31, 2016 913,381 $ 2.41 $ 1,961,403 Issued -- -- Exercised (887,585 ) 2.41 Expired (25,796 ) -- Outstanding at March 31, 2017 -- $ -- $ -- Stock-Based Compensation We did not grant any stock options during the three months ended March 31, 2017 and 2016. The following table summarizes stock-based compensation expense information about restricted stock and stock options for the three months ended March 31, 2017 and 2016: Three months ended March 31, 2017 2016 Stock-based compensation expense associated with restricted stock $ 5,995,455 $ 1,698,965 $ 5,995,455 $ 1,698,965 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | The following is a summary of notes payable: March 31, 2017 December 31, 2016 Current portion, net Non-current portion, net Total Current portion, net Non-current portion, net Total Convertible 5% Notes Payable $ 174,657 $ - $ 174,657 $ 68,875 $ - $ 68,875 Total $ 174,657 $ - $ 174,657 $ 68,875 $ - $ 68,875 Convertible 5% Notes Payable The 5% Notes and accrued and unpaid interest thereon are convertible at the option of the holder into common stock at the conversion price of $1,125 per share. We have no obligation under the 5% Notes aside from (a) 50% of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and (b) the conversion feature, discussed above. The cumulative liability including accrued and unpaid interest of these notes was approximately $16.9 million at March 31, 2017 and $16.7 million at December 31, 2016. In December 2011, we elected the fair value option for valuing the 5% Notes. The fair value option was elected in order to reflect in our financial statements the assumptions that market participants use in evaluating these financial instruments (see Note 4 for further details). |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 3 Months Ended |
Mar. 31, 2017 | |
License Agreement [Abstract] | |
LICENSE AGREEMENTS | BET In May 2016, as part of a broader agreement with Jubilant Biosys (“Jubilant”), an India-based biotechnology company, we entered into a sub-license agreement (“JBET Agreement”) with Checkpoint Therapeutics, Inc. (“Checkpoint”), (see Note 8), for the development and commercialization of Jubilant’s novel BET inhibitor program in the field of hematological malignancies. Under the terms of the agreement, we paid Checkpoint an up-front licensing fee of $1.0 million and will make additional payments contingent on certain preclinical, clinical, and regulatory milestones, including commercial milestones totaling up to approximately $177 million and a single-digit royalty on net sales. TG will also provide funding to support certain targeted research efforts at Jubilant. TG-1101 In November 2012, we entered into an exclusive (within the territory) sublicense agreement with Ildong relating to the development and commercialization of TG-1101 in South Korea and Southeast Asia. Under the terms of the sublicense agreement, Ildong has been granted a royalty bearing, exclusive right, including the right to grant sublicenses, to develop and commercialize TG-1101 in South Korea, Taiwan, Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, and Myanmar. An upfront payment of $2.0 million which was received in December 2012 (net of $0.3 million of income tax withholdings |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | LFB Biotechnologies On January 30, 2012, we entered into an exclusive license agreement with LFB Biotechnologies, GTC Biotherapeutics and LFB/GTC LLC, all wholly-owned subsidiaries of LFB Group, relating to the development of ublituximab (the “LFB License Agreement”). In connection with the LFB License Agreement, LFB Group was issued 5,000,000 shares of common stock, and a warrant to purchase 2,500,000 shares of common stock at a purchase price of $0.001 per share. In addition, on November 9, 2012, we nominated Dr. Yann Echelard to our Board of Directors as LFB Group’s nominee. LFB Group maintains the right to nominate a board member until such time as LFB Group owns less than 10% of the outstanding common stock. Under the terms of the LFB License Agreement, we utilize LFB Group for certain development and manufacturing services. We incurred expenses of approximately $27,000 and no such expenses during the three months ended March 31, 2017 and 2016, respectively, which have been included in other research and development expenses in the accompanying condensed consolidated statements of operations. As of March 31, 2017 and December 31, 2016, we had approximately $17,000 and $0.4 million, respectively, recorded in accounts payable related to the LFB License Agreement. In conjunction with the development and manufacturing services discussed above, certain agreements between us and LFB Group require payments in advance of services performed or goods delivered. Accordingly, as of March 31, 2017 and December 31, 2016, we recorded approximately $1.6 million and $1.3 million, respectively, in prepaid research and development for such advance payments. Other Parties In March 2014, we entered into a shared services agreement (the “Opus Shared Services Agreement”) with Opus Point Partners Management, LLC (“Opus”) in which the parties agreed to share the costs of a rented facility and certain other services. Our Executive Chairman and Interim Chief Executive Officer is a Managing Member of Opus. During the three months ended March 31, 2017 and 2016, we incurred expenses of approximately $0 and $0.1 million, respectively, principally for rent, related to this agreement. The Opus Shared Services Agreement is no longer in effect as we began occupying new space in April 2016. In October 2014, we entered into an agreement (the “Office Agreement”) with Fortress Biotech, Inc. (“Fortress”), to occupy approximately 45% of the 24,000 square feet of New York City office space leased by Fortress, which is now our corporate headquarters. The Office Agreement requires us to pay our respective share of the average annual rent and other costs of the 15-year lease. We approximate an average annual rental obligation of $1.1 million under the Office Agreement. We began to occupy this new space in April 2016, with rental payments beginning in the third quarter of 2016. During the three months ended March 31, 2017, we recorded rent expense of approximately $0.4 million and . Mr. Weiss, our Executive Chairman and Interim CEO, is also Executive Vice Chairman of Fortress. Under the Office Agreement, we agreed to pay Fortress our portion of the build out costs, As of March 31, 2017, we had approximately $0.1 In July 2015, we entered into a Shared Services Agreement (the “Shared Services Agreement”) with Fortress to share the cost of certain services such as facilities use, personnel costs and other overhead and administrative costs. This Shared Services Agreement requires us to pay our respective share of services utilized. In connection with the Shared Services Agreement, we approximately $0.3 million and $0.1 million for shared services for the three months ended March 31, 2017 and 2016, respectively, primarily related to shared personnel. In May 2016, as part of a broader agreement with Jubilant, an India-based biotechnology company, we entered into the JBET Agreement with Checkpoint, a subsidiary of Fortress, for the development and commercialization of Jubilant’s novel BET inhibitor program in the field of hematological malignancies. We paid Checkpoint an up-front licensing fee of $1.0 million and incurred expenses of $0.2 million for the first milestone achievement as part of the JBET Agreement recorded in other research and development. As of March 31, 2017 and December 31, 2016, we had approximately $0.7 million and $0.8 million, respectively, recorded in accounts payable, related to the JBET Agreement. Mr. Weiss is also the Executive Chairman of Checkpoint. |
LITIGATION
LITIGATION | 3 Months Ended |
Mar. 31, 2017 | |
Litigation | |
LITIGATION | On January 6, 2017, a purported securities class action complaint was filed in New York federal court against the Company and certain of its directors, officers or consultants on behalf of all shareholders who purchased or otherwise acquired TG Therapeutics common stock between September 15, 2014 and October 12, 2016 (the “Class Period”). The case was captioned John Lyon v. TG Therapeutics, Michael S. Weiss, Sean A. Power and Robert Niecestro Kenneth C. Wyzgoski v. TG Therapeutics, Michael S. Weiss, Sean A. Power and Robert Niecestro In re TG Therapeutics Securities Litigation The Company denies the allegations and claims made in the above-referenced actions and no consideration was given by the Company in connection with lead plaintiffs’ voluntary dismissal of the consolidated action.. |
ORGANIZATION AND SUMMARY OF S16
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Business Description | We are a biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases. Currently, we are developing two therapies targeting hematologic malignancies. TG-1101 (ublituximab) is a novel, glycoengineered monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes. We are also developing TGR-1202, an orally available PI3K delta inhibitor. The delta isoform of PI3K is strongly expressed in cells of hematopoietic origin and is believed to be important in the proliferation and survival of B-lymphocytes. Both TG-1101 and TGR-1202 are in clinical development for patients with hematologic malignancies, with TG-1101 also in clinical development for autoimmune disorders. The Company also has pre-clinical programs to develop IRAK4 (interleukin-1 receptor-associated kinase 4) inhibitors, BET (Bromodomain and Extra Terminal) inhibitors, and anti-PD-L1 and anti-GITR antibodies. We also actively evaluate complementary products, technologies and companies for in-licensing, partnership, acquisition and/or investment opportunities. To date, we have not received approval for the sale of any of our drug candidates in any market and, therefore, have not generated any product sales from our drug candidates. The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Exchange Act. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the condensed consolidated financial statements have been included. Nevertheless, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016. The accompanying condensed December 31, 2016 balance sheet has been derived from these statements. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. |
Liquidity and Capital Resources | We have incurred operating losses since our inception, expect to continue to incur operating losses for the foreseeable future, and may never attain profitable operations. As of March 31, 2017, we have an accumulated deficit of approximately $264.1 million. Our major sources of cash have been proceeds from the private placement and public offering of equity securities. We have not yet commercialized any of our drug candidates and cannot be sure if we will ever be able to do so. Even if we commercialize one or more of our drug candidates, we may not become profitable. Our ability to achieve profitability depends on many factors, including our ability to obtain regulatory approval for our drug candidates; successfully completing any post-approval regulatory obligations; and successfully commercializing our drug candidates alone or with one or more partners. We may continue to incur substantial operating losses even if we begin to generate revenues from our drug candidates. As of March 31, 2017, we had approximately $109.5 million in cash, cash equivalents, investment securities, and interest receivable, which we believe will be sufficient to fund the Company’s planned operations through 2018. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of clinical trials for our drug candidates. We are dependent upon significant future financing to provide the cash necessary to execute our current strategic plan, including the commercialization of any of our drug candidates. Our common stock is listed on the Nasdaq Capital Market and trades under the symbol “TGTX.” |
Recently Issued Accounting Standards | In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, ASU 2017-04: ● Clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units in connection with an entity’s testing of reporting units for goodwill impairment. ● Clarifies that an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ● Makes minor changes to the overview and background sections of certain Accounting Standards Codification (“ASC” or “Codification”) subtopics and topics as part of the Board’s initiative to unify and improve those sections throughout the Codification. ASU 2017-04 is effective prospectively for annual and interim periods beginning on or after December 15, 2019, and early adoption is permitted on testing dates after January 1, 2017. We are currently evaluating the impact the adoption of ASU 2017-04 will have on our consolidated financial statements. Other pronouncements issued by the FASB or other authoritative accounting standards group with future effective dates are either not applicable or not significant to our consolidated financial statements. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the applicable reporting period. Actual results could differ from those estimates. Such differences could be material to the consolidated financial statements. |
Cash and Cash Equivalents | We treat liquid investments with original maturities of three months or less when purchased as cash and cash equivalents. |
Restricted Cash | We record cash pledged or held in trust as restricted cash. As of March 31, 2017 and December 31, 2016, we have approximately $0.6 million of restricted cash pledged to secure a line of credit as a security deposit for an Office Agreement |
Investment Securities | Investment securities at March 31, 2017 and December 31, 2016 consist of short-term government securities. We classify these securities as held-to-maturity. Held-to-maturity securities are those securities in which we have the ability and intent to hold the security until maturity. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest method. A decline in the market value of any investment security below cost, that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The impairment is charged to operations and a new cost basis for the security is established. Other-than-temporary impairment charges would be included in interest and other (income) expense, net. Dividend and interest income are recognized when earned. |
Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents and short-term investments with high-credit quality financial institutions. At times, such amounts may exceed federally-insured limits. |
Revenue Recognition | We recognize license revenue in accordance with the revenue recognition guidance of the FASB Codification. We analyze each element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include payments to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements unless the fee is in exchange for products delivered or services rendered that represent the culmination of a separate earnings process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement of specified milestones only if (1) the milestone payment is non-refundable, (2) substantive effort is involved in achieving the milestone, (3) the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement of the milestone, and (4) the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone payment and recognize it as revenue over the estimated period of performance under the contract. |
Research and Development Costs | Generally, research and development costs are expensed as incurred. Non-refundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. We make estimates of costs incurred in relation to external clinical research organizations, or CROs, and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued liability balance and expense in any accounting period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract. Prepaid research and development in our consolidated balance sheets includes, among other things, certain costs to third party service providers related to development and manufacturing services as well as clinical development. These agreements often require payments in advance of services performed or goods received. Accordingly, as of March 31, 2017 and December 31, 2016, we recorded approximately $8.4 million and $5.7 million, respectively, in prepaid research and development related to such advance agreements. |
Income Taxes | Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. If the likelihood of realizing the deferred tax assets or liability is less than “more likely than not,” a valuation allowance is then created. |
Stock-Based Compensation | We recognize all stock-based payments to employees and non-employee directors (as compensation for service) as noncash compensation expense in the condensed consolidated financial statements based on the fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For stock-based payments to consultants and other third-parties (including related parties), noncash compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties (including related parties) are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date. In addition, because some of the options, restricted stock and warrants issued to employees, consultants and other third-parties vest upon achievement of certain milestones, the total expense is uncertain. Compensation expense for such awards that vest upon the achievement of milestones is recognized when the achievement of such milestones becomes probable. |
Basic and Diluted Net Loss Per Common Share | Basic net loss per share of our common stock is calculated by dividing net loss applicable to the common stock by the weighted average number of our common stock outstanding for the period. Diluted net loss per share of common stock is the same as basic net loss per share of common stock since potentially dilutive securities from stock options, stock warrants and convertible preferred stock would have an antidilutive effect either because we incurred a net loss during the periods presented or because such potentially dilutive securities were out of the money and the Company realized net income during the periods presented. The amounts of potentially dilutive securities excluded from the calculation were 3,634,008 and 6,869,500 for the three months ended March 31, 2017 and 2016, respectively. The following outstanding shares of potentially dilutive securities were excluded from the computation of net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: Three Months Ended March 31, 2017 2016 Unvested restricted stock 3,619,016 5,674,415 Warrants -- 1,177,137 Shares issuable upon note conversion 14,992 17,948 Total 3,634,008 6,869,500 |
Impairment Of Tangible and Intangible Asset Including Goodwill | Long-lived assets are reviewed for potential impairment when circumstances indicate that the carrying value of long-lived tangible and intangible assets with finite lives may not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria as well as qualitative measures. If an analysis is necessitated by the occurrence of a triggering event, we make certain assumptions in determining the impairment amount. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized. Goodwill is reviewed for impairment annually, or earlier when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process. The first step compares the fair value of the reporting unit with the unit's carrying value, including goodwill. When the carrying value of the reporting unit is greater than fair value, the unit’s goodwill may be impaired, and the second step must be completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the carrying amount of the unit’s goodwill. If the carrying amount is greater than the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. We will continue to perform impairment tests annually, at December 31, and whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. |
Rent Expense and Deferred Rent | Rent expense and lease incentives, including landlord construction allowances, are recognized on a straight-line basis over the lease term, commencing generally on the date the Company takes possession of the leased property. The Company records lease incentives as deferred rent and recognizes the lease incentives as reductions of rental expense. The unamortized portion of deferred rent is included in deferred rent in the condensed consolidated balance sheets. |
ORGANIZATION AND SUMMARY OF S17
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended March 31, 2017 2016 Unvested restricted stock 3,619,016 5,674,415 Warrants -- 1,177,137 Shares issuable upon note conversion 14,992 17,948 Total 3,634,008 6,869,500 |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | March 31, 2017 December 31, 2016 Money market funds $ 15,106,834 $ 20,978,947 Checking and bank deposits 80,530,738 4,052,333 Total $ 95,637,572 $ 25,031,280 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Held-to-maturity Securities | March 31, 2017 Amortized cost, as adjusted Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Short-term investments: Obligations of domestic governmental agencies (maturing between April 2017 and September 2017) (held-to-maturity) $ 13,823,332 $ 607 $ 5,255 $ 13,818,684 Total short-term investment securities $ 13,823,332 $ 607 $ 5,255 $ 13,818,684 December 31, 2016 Amortized cost, as adjusted Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Short-term investments: Obligations of domestic governmental agencies (maturing between February 2017 and September 2017) (held-to-maturity) $ 19,853,860 $ 3,270 $ 2,492 $ 19,854,638 Total short-term investment securities $ 19,853,860 $ 3,270 $ 2,492 $ 19,854,638 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | Financial liabilities at fair value as of March 31, 2017 Level 1 Level 2 Level 3 Total 5% Notes $ -- $ -- $ 174,657 $ 174,657 Total $ -- $ -- $ 174,657 $ 174,657 Financial liabilities at fair value as of December 31, 2016 Level 1 Level 2 Level 3 Total 5% Notes $ -- $ -- $ 68,875 $ 68,875 Total $ -- $ -- $ 68,875 $ 68,875 |
Change In Level Three Fair Value During Period | Fair value at December 31, 2016 $ 68,875 Interest accrued on face value of 5% Notes 202,748 Change in fair value of Level 3 liabilities (96,966 ) Fair value at March 31, 2017 $ 174,657 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2016 8,642,055 $ 7.20 Granted 111,254 4.80 Vested (3,629,798 ) 5.10 Forfeited (4,495 ) 4.65 Outstanding at March 31, 2017 5,119,016 $ 6.21 |
Schedule Of Warrants Activity | Warrants Weighted average exercise price Aggregate Intrinsic Value Outstanding at December 31, 2016 913,381 $ 2.41 $ 1,961,403 Issued -- -- Exercised (887,585 ) 2.41 Expired (25,796 ) -- Outstanding at March 31, 2017 -- $ -- $ -- |
Schedule Of Share Based Compensation Expense | Three months ended March 31, 2017 2016 Stock-based compensation expense associated with restricted stock $ 5,995,455 $ 1,698,965 $ 5,995,455 $ 1,698,965 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | March 31, 2017 December 31, 2016 Current portion, net Non-current portion, net Total Current portion, net Non-current portion, net Total Convertible 5% Notes Payable $ 174,657 $ - $ 174,657 $ 68,875 $ - $ 68,875 Total $ 174,657 $ - $ 174,657 $ 68,875 $ - $ 68,875 |
ORGANIZATION AND SUMMARY OF S23
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 3,634,008 | 6,869,500 |
Unvested Restricted Stock [Member] | ||
Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 3,619,016 | 5,674,415 |
Warrant [Member] | ||
Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 0 | 1,177,137 |
Share Issuable Upon Note Conversion [Member] | ||
Significant Accounting Policies [Line Items] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 14,992 | 17,948 |
ORGANIZATION AND SUMMARY OF S24
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Accumulated deficit | $ (264,114,329) | $ (236,386,820) | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,634,008 | 6,869,500 | |
Cash, Cash Equivalents, and Short-term Investments, Total | $ 109,500,000 | ||
Restricted Cash and Investments | 600,000 | 600,000 | |
Prepaid Manufacturing | $ 8,400,000 | $ 5,700,000 |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||||
Money market funds | $ 15,106,834 | $ 20,978,947 | ||
Checking and bank deposits | 80,530,738 | 4,052,333 | ||
Total | $ 95,637,572 | $ 25,031,280 | $ 36,478,420 | $ 55,061,329 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized cost, as adjusted | $ 13,823,332 | $ 19,853,860 |
Gross unrealized holding gains | 607 | 3,270 |
Gross unrealized holding losses | 5,255 | 2,492 |
Estimated fair value | 13,818,684 | 19,854,638 |
Short-term Investments [Member] | US Government Agencies Debt Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized cost, as adjusted | 13,823,332 | 19,853,860 |
Gross unrealized holding gains | 607 | 3,270 |
Gross unrealized holding losses | 5,255 | 2,492 |
Estimated fair value | $ 13,818,684 | $ 19,854,638 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
5% Notes | $ 174,657 | $ 68,875 |
Totals | 174,657 | 68,875 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
5% Notes | 0 | 0 |
Totals | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
5% Notes | 0 | 0 |
Totals | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
5% Notes | 174,657 | 68,875 |
Totals | $ 174,657 | $ 68,875 |
FAIR VALUE MEASUREMENTS (Deta28
FAIR VALUE MEASUREMENTS (Details 1) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair value at December 31, 2016 | $ 68,875 |
Interest accrued on face value of 5% Notes | 202,748 |
Change in fair value of Level 3 liabilities | (96,966) |
Fair value at March 31, 2017 | $ 174,657 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - Unvested Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Equity Incentive Plans Restricted Stock Activity [Line Items] | |
Number of Shares, Outstanding at Beginning Balance | shares | 8,642,055 |
Number of Shares, Granted | shares | 111,254 |
Number of Shares, Vested | shares | (3,629,798) |
Number of Shares, Forfeited | shares | (4,495) |
Number of Shares, Outstanding at Ending Balance | shares | 5,119,016 |
Weighted Average Grant Date Fair Value, Outstanding at Beginning Balance | $ / shares | $ 7.20 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 4.80 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 5.10 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 4.65 |
Weighted Average Grant Date Fair Value, Outstanding at Ending Balance | $ / shares | $ 6.21 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Equity Incentive Plans Warrant Activity [Line Items] | |
Warrants, Outstanding at Beginning Balance | shares | 913,381 |
Warrants, Issued | shares | 0 |
Warrants, Exercised | shares | (887,585) |
Warrants, Expired | shares | (25,796) |
Warrants, Outstanding at Ending Balance | shares | 0 |
Weighted - average exercise price, Outstanding at Beginning Balance (in dollars per share) | $ / shares | $ 2.41 |
Weighted - average exercise price, Issued (in dollars per share) | $ / shares | 0 |
Weighted - average exercise price, Exercised (in dollars per share) | $ / shares | 2.41 |
Weighted - average exercise price, Expired (in dollars per share) | $ / shares | 0 |
Weighted - average exercise price, Outstanding at Ending Balance (in dollars per share) | $ / shares | $ 0 |
Aggregate Intrinsic Value, Outstanding at Beginning Balance (in dollars) | $ | $ 1,961,403 |
Aggregate Intrinsic Value, Outstanding at Ending Balance (in dollars) | $ | $ 0 |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) - Unvested Restricted Stock [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense associated with restricted stock | $ 5,995,455 | $ 1,698,965 |
Allocated Share-based Compensation Expense | $ 5,995,455 | $ 1,698,965 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Mar. 09, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 1 year 4 months 24 days | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 9,600,000 | |||
Options Outstanding | 305,000 | |||
Shares of restricted stock issued to non-employees | 2,397,583 | |||
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 | ||
Share-based Compensation, Total | $ 5,995,455 | $ 1,698,965 | ||
Shares issued, public offering | 5,128,206 | |||
Underwriter option to purchase shares | 769,230 | |||
Public offering price per share | $ 9.75 | |||
Proceeds from public offering | $ 54,000,000 | |||
Public offering close date | Mar. 14, 2017 | |||
Mr. Weiss | ||||
Shares forfeited under the Amendment | 3,381,866 | |||
Restricted shares issued under the Amendment | 418,371 | |||
Advisor | ||||
Restricted shares issued under the Amendment | 2,960,000 | |||
2015 ATM | ||||
Shares sold under plan | 3,104,253 | |||
Gross proceeds from sale off common stock | $ 31,600,000 | |||
Net proceeds from sale off common stock | $ 31,000,000 | |||
Selling price per share | $ 10.18 | |||
Common stock available for sale | $ 88,200,000 | |||
2012 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,180,005 | |||
Non Employee Restricted Stock | ||||
Options Outstanding | 2,397,583 | |||
Share-based Compensation, Total | $ 6,000,000 | $ 1,700,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Notes Payable [Line Items] | ||
Notes payable, Current portion, net | $ 174,657 | $ 68,875 |
Notes payable, Non-current portion, net | 0 | 0 |
Total | 174,657 | 68,875 |
Convertible Notes [Member] | ||
Notes Payable [Line Items] | ||
Notes payable, Current portion, net | 174,657 | 68,875 |
Notes payable, Non-current portion, net | 0 | 0 |
Total | $ 174,657 | $ 68,875 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - Convertible Notes Payable [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2011 | |
Debt Instrument, Convertible, Conversion Price | $ 1,125 | ||
Debt Instrument, Interest Rate During Period | 5.00% | 5.00% | |
Debt Instrument, Maturity Date | Mar. 8, 2015 | ||
Cumulative Liability | $ 16,900,000 | $ 16,700,000 | |
Ariston [Member] | |||
Percentage Of Cash Proceeds From Operation To Repay Interest On Convertible Debt | 50.00% |
LICENSE AGREEMENTS (Details Nar
LICENSE AGREEMENTS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2012 | Dec. 31, 2016 | |
License Agreement [Line Items] | ||||
License revenue | $ 38,095 | $ 38,095 | ||
JBET Agreement [Member] | ||||
License Agreement [Line Items] | ||||
Upfront Payment Amount | 1,000,000 | |||
Additional Amount Receivable On Achievement Of Pre Specified Milestones | 177,000,000 | |||
TG One One Zero One [Member] | ||||
License Agreement [Line Items] | ||||
License revenue | 38,000 | $ 38,000 | ||
Deferred Revenue | $ 1,300,000 | $ 1,400,000 | ||
Licensing Agreements [Member] | ||||
License Agreement [Line Items] | ||||
Upfront Fee | $ 2,000,000 | |||
Income taxes | $ 300,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 3 Months Ended | ||
Mar. 31, 2017USD ($)ft²$ / sharesshares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)shares | |
Related Party Transaction [Line Items] | |||
Other research and development | $ 20,375,794 | $ 11,230,415 | |
Prepaid Research And Development | $ 8,422,375 | $ 5,678,755 | |
Common stock issued | shares | 66,816,455 | 56,820,423 | |
LFB License Agreement [] [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts Payable | $ 17,000 | 400,000 | |
Prepaid Research And Development | $ 1,600,000 | 1,300,000 | |
Common stock issued | shares | 5,000,000 | ||
Warrant to purchase common stock | shares | 2,500,000 | ||
Common stock purchase price | $ / shares | $ .001 | ||
Shared Services Agreement [Member] | |||
Related Party Transaction [Line Items] | |||
Costs and Expenses, Related Party | $ 300,000 | 100,000 | |
Office Agreement [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts Payable | 100,000 | ||
Average Annual Rental Payments | $ 1,100,000 | ||
Percentage of Occupancy | 45.00% | ||
Area of Land | ft² | 24,000 | ||
Operating Lease, Initial Commitment Period | 15 years | ||
Rent expense | $ 400,000 | ||
Deferred rent | 1,300,000 | ||
JBET Agreement [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts Payable | 700,000 | 800,000 | |
Sublicense Fee paid | 1,000,000 | ||
Opus [Member] | |||
Related Party Transaction [Line Items] | |||
Costs and Expenses, Related Party | $ 0 | $ 100,000 |