Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 12, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ARDM | ||
Entity Registrant Name | ARADIGM CORP | ||
Entity Central Index Key | 1,013,238 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 14,951,089 | ||
Entity Public Float | $ 24,277,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 22,591 | $ 31,462 |
Restricted cash | 1,006 | |
Receivables | 167 | 150 |
Prepaid and other current assets | 1,037 | 3,634 |
Total current assets | 24,801 | 35,246 |
Property and equipment, net | 253 | 299 |
Other assets | 81 | |
Total assets | 25,054 | 35,626 |
Current liabilities: | ||
Accounts payable | 711 | 1,789 |
Accrued clinical and cost of other studies | 3,306 | 4,315 |
Accrued compensation | 1,335 | 1,159 |
Deferred rent | 37 | |
Facility lease exit obligation | 104 | |
Other accrued liabilities | 496 | 112 |
Total current liabilities | 5,848 | 7,516 |
Deferred revenue-related party, non-current | 5,000 | 5,000 |
Convertible debt, net of discount | 2,212 | |
Convertible debt-related party, net of discount | 11,007 | |
Total liabilities | 24,067 | 12,516 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity: | ||
Preferred stock, 5,000,000 shares authorized, none outstanding | ||
Common stock, no par value; authorized shares: 35,045,765 at December 31, 2016; 25,045,765 at December 31, 2015; issued and outstanding shares: 14,951,089 at December 31, 2016; 14,761,351 at December 31, 2015 | 439,406 | 428,591 |
Accumulated deficit | (438,419) | (405,481) |
Total shareholders' equity | 987 | 23,110 |
Total liabilities and shareholders' equity | $ 25,054 | $ 35,626 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 35,045,765 | 25,045,765 |
Common stock, shares issued | 14,951,089 | 14,761,351 |
Common stock, shares outstanding | 14,951,089 | 14,761,351 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
Contract revenue-related party (Note 8) | $ 40 | $ 23,372 |
Contract revenue | 116 | |
Grant revenue | 39 | 57 |
Total revenues | 195 | 23,429 |
Operating expenses: | ||
Research and development | 24,387 | 35,276 |
General and administrative | 5,828 | 5,294 |
Restructuring and asset impairment | 2 | 11 |
Total operating expenses | 30,217 | 40,581 |
Loss from operations | (30,022) | (17,152) |
Interest income | 88 | 29 |
Interest expense | (2,406) | |
Other expense, net | (598) | (86) |
Net loss and comprehensive loss | $ (32,938) | $ (17,209) |
Basic and diluted net loss per common share | $ (2.23) | $ (1.17) |
Shares used in computing basic and diluted net loss per common share | 14,779 | 14,747 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2014 | $ 39,115 | $ 427,387 | $ (388,272) |
Beginning Balance, Shares at Dec. 31, 2014 | 14,726,960 | ||
Issuance of common stock under the employee stock purchase plan | 154 | $ 154 | |
Issuance of common stock under the employee stock purchase plan, Shares | 30,891 | ||
Exercise of options | 21 | $ 21 | |
Exercise of options, Shares | 3,500 | ||
Stock-based compensation expense for stock options, restricted stock and restricted stock units | 1,029 | $ 1,029 | |
Net loss | (17,209) | (17,209) | |
Ending Balance at Dec. 31, 2015 | 23,110 | $ 428,591 | (405,481) |
Ending Balance, Shares at Dec. 31, 2015 | 14,761,351 | ||
Issuance of common stock under the employee stock purchase plan | 104 | $ 104 | |
Issuance of common stock under the employee stock purchase plan, Shares | 23,738 | ||
Issuance of restricted stock | 0 | $ 0 | $ 0 |
Issuance of restricted stock, Shares | 166,000 | ||
Reclassification of derivative liability to equity | $ 8,362 | $ 8,362 | |
Reclassification of derivative liability to equity, Shares | 0 | 0 | 0 |
Reclassification of warrants to equity | $ 11 | $ 11 | |
Reclassification of warrants to equity, Shares | 0 | 0 | 0 |
Issuance of warrants with convertible notes | $ 662 | $ 662 | |
Issuance of warrants with convertible notes, Shares | 0 | 0 | 0 |
Stock-based compensation expense for stock options, restricted stock and restricted stock units | $ 1,676 | $ 1,676 | |
Net loss | (32,938) | $ (32,938) | |
Ending Balance at Dec. 31, 2016 | $ 987 | $ 439,406 | $ (438,419) |
Ending Balance, Shares at Dec. 31, 2016 | 14,951,089 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (32,938) | $ (17,209) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 121 | 203 |
Stock-based compensation expense | 1,676 | 1,029 |
Amortization of convertible debt discount | 1,057 | |
Financing costs, derivative liability and warrants | 997 | |
Change in value of derivative liability | (386) | |
Changes in operating assets and liabilities: | ||
Restricted cash | 250 | |
Receivables | (17) | 908 |
Prepaid and other current assets | 2,597 | (2,427) |
Other assets | 81 | 2,875 |
Accounts payable | (1,078) | (917) |
Accrued compensation | 176 | 340 |
Current deferred revenue-related party | (790) | |
Accrued liabilities | (625) | 2,133 |
Deferred rent | (37) | (60) |
Deferred revenue-related party, non-current | (2,845) | |
Facility lease exit obligation | (104) | (193) |
Net cash used in operating activities | (28,480) | (16,703) |
Cash flows from investing activities: | ||
Transfer to/from restricted cash, net | (1,006) | |
Capital expenditures | (75) | |
Net cash used in investing activities | (1,081) | |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible debt | 3,050 | |
Proceeds from issuance of convertible debt - related party | 19,950 | |
Proceeds from issuance of common stock | 104 | 175 |
Payments for financing costs | (2,414) | |
Net cash provided by financing activities | 20,690 | 175 |
Net decrease in cash and cash equivalents | (8,871) | (16,528) |
Cash and cash equivalents at beginning of year | 31,462 | 47,990 |
Cash and cash equivalents at end of year | 22,591 | $ 31,462 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,005 | |
Non-cash disclosure of financing activities: | ||
Reclassification of derivative liability to equity | 8,362 | |
Reclassification of warrants to equity | 11 | |
Debt discount from warrants | $ 662 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Organization Aradigm Corporation, or the Company, is a California corporation, incorporated in 1991, focused on the development and commercialization of drugs delivered by inhalation for the prevention and treatment of severe respiratory diseases. The Company’s principal activities to date have included conducting research and development and developing collaborations. Management does not anticipate receiving revenues from the sale of any of its products in the upcoming year. The Company operates as a single operating segment. Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Liquidity and Financial Condition The Company has incurred significant operating losses and negative cash flows from operations. At December 31, 2016, the Company had an accumulated deficit of approximately $438.4 million, working capital of approximately $19.0 million and shareholders’ equity of approximately $1.0 million. The Company believes that its cash and cash equivalents totaling approximately $22.6 million as of December 31, 2016 will be sufficient to fund its operations at least through 2017, provided the Company is able to earn the $5 million milestone payment from Grifols upon the first regulatory filing. However, the Company will need to raise additional capital in 2017 to maintain the Company’s current level of product development activity. Accordingly, the Company anticipates raising additional capital in 2017, through issuance of debt or equity securities, royalty financing transactions, strategic transactions or otherwise, to fund the Company’s operations and continue development of the Company’s leading product candidate Linhaliq. No assurance can be given that the Company will be successful in raising such additional capital on favorable terms or at all. If the Company is unable to obtain additional funds when required it will, delay or reduce the scope of all or a portion of its development programs or dispose of assets or technology. Use of Estimates The preparation of financial statements, in conformity with United States generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include useful lives for property and equipment and related depreciation calculations, assumptions for valuing options and warrants, and income taxes. Actual results could differ from these estimates. Cash Equivalents All highly liquid investments with maturities of three months or less at the time of purchase are classified as cash equivalents. Restricted Cash The Company classifies transfers to the restricted cash balance in the statement of cash flows based on the nature of the restriction. At December 31, 2016, the Company has $1.0 million in restricted cash held in an interest bearing escrow account for the purpose of making future interest payments on the Convertible Notes, as outlined in Note 7 below. The Company is required to maintain such deposits sufficient to pay all required payments of interest through May 1, 2017. Property and Equipment The Company records property and equipment at cost and calculates depreciation using the straight-line method over the estimated useful lives of the respective assets. Machinery and equipment includes external costs incurred for validation of the equipment. The Company does not capitalize internal validation expense. Computer equipment and software includes capitalized computer software. All of the Company’s capitalized software is purchased; the Company has no internally developed computer software. Leasehold improvements are amortized over the shorter of the term of the lease or useful life of the improvement. The standard estimated useful lives of property and equipment are as follows: Computer equipment and software 3 years Furniture and fixtures 7 years Lab equipment 5 years Machinery and equipment 5 years Leasehold improvements 5 to 17 years Impairment of Long-Lived Assets The Company reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of property and equipment may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values and the loss is recognized in the Consolidated Statements of Operations and Comprehensive Loss. Convertible Instruments The Company accounts for hybrid contracts that feature conversion options in accordance with generally accepted accounting principles in the United States. ASC 815, Derivatives and Hedging Activities The Company accounts for convertible instruments (when it has determined that the embedded conversion options should be bifurcated from their host instruments) in accordance with ASC 815. Under ASC 815, a portion of the proceeds received upon the issuance of the hybrid contract is allocated to the fair value of the derivative. The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in results of operations. Warrants Issued in Connection with Financings The Company generally accounts for warrants issued in connection with financings as a component of equity, unless there is a possibility that the Company may have to settle the warrants in cash. For warrants issued with the deemed possibility of a cash settlement, the Company records the fair value of the issued warrants as a liability at each reporting date and records changes in the estimated fair value as a non-cash gain or loss in the condensed consolidated statements of operations. The fair values of warrants have been determined using the Black Scholes Merton Option Pricing valuation model, or the Black-Scholes Model. The Black-Scholes Model provides for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity. These values are subject to a significant degree of judgment on the part of the Company. Accounting for Costs Associated with Exit or Disposal Activities The Company recognizes a liability for the cost associated with an exit or disposal activity that is measured initially at its fair value in the period in which the liability is incurred. Costs to terminate an operating lease or other contracts are (a) costs to terminate the contract before the end of its term or (b) costs that will continue to be incurred under the contract for its remaining term without economic benefit to the entity. In periods subsequent to initial measurement, changes to the liability are measured using the credit adjusted risk-free rate that was used to measure the liability initially. Revenue Recognition Contract revenues consist of revenues from grants, collaboration agreements and feasibility studies. License and collaboration revenue is primarily generated through agreements with strategic partners for the development and commercialization of our product candidates. The terms of the agreement typically include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones and royalties on net product sales. The Company recognizes revenue under the provisions of the Securities and Exchange Commission issued Staff Accounting Bulletin 104, Topic 13, Revenue Recognition Revised and Updated . Revenue is recognized when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed and determinable and collection is reasonably assured. Multiple-deliverable arrangements, such as license and development agreements, are analyzed to determine whether the deliverables can be separated or whether they must be accounted for as a single unit of accounting. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price method and the appropriate revenue recognition principles are applied to each unit. When the Company determines that an arrangement should be accounted for as a single unit of accounting, it must determine the period over which the performance obligations will be performed and revenue will be recognized. The Company estimates its performance period used for revenue recognition based on the specific terms of each agreement, and adjusts the performance periods, if appropriate, based on the applicable facts and circumstances. Significant management judgment may be required to determine the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. The Company prospectively adopted the provisions of Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605); Multiple-Deliverable Revenue Arrangements The Company allocates non-contingent consideration to each stand-alone deliverable based upon the relative selling price of each element. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence, or VSOE, of selling price, if it exists, or third-party evidence, or TPE, of selling price, if it exists. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses best estimated selling price, or BESP, for that deliverable. Assuming the elements meet the revenue recognition guidelines, the revenue recognition methodology prescribed for each unit of accounting is summarized below: Upfront Fees Funded Research and Development and Grant Revenue Milestones Royalties— Research and Development Research and development expenses consist of costs incurred for company-sponsored, collaborative and contracted research and development activities. These costs include direct and research-related overhead expenses. The Company expenses research and development costs as such costs are incurred. Stock-Based Compensation The Company accounts for share-based payment arrangements in accordance with ASC 718, Compensation-Stock Compensation ASC 505-50, Equity-Equity Based Payments to Non-Employees Income Taxes The Company makes certain estimates and judgments in determining income tax expense for consolidated financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of revenue and expense for tax and financial statement purposes. As part of the process of preparing the financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves the estimation of the current tax exposure under the most recent tax laws and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities which are included in the Company’s consolidated balance sheets. The Company assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including its historical levels of income and losses, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. If the Company does not consider it more likely than not that it will recover its deferred tax assets, it will record a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable. At December 31, 2016 and 2015, the Company believed that the amount of its deferred income taxes would not be ultimately recovered. Accordingly, the Company recorded a full valuation allowance for deferred tax assets. However, should there be a change in the Company’s ability to recover its deferred tax assets, it would recognize a benefit to its tax provision in the period in which it determines that it is more likely than not that it will recover its deferred tax assets. Net Income/(Loss) Per Common Share Basic net income/(loss) per common share is computed using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of shares subject to repurchase. Diluted net income/(loss) per common share is based on the weighted average number of common and common equivalent shares, such as stock options and unvested restricted stock shares outstanding during the period. Significant Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. Risks associated with these instruments are mitigated by banking with, and only purchasing commercial paper and corporate notes from, creditworthy institutions. The maximum amount of loss due to credit risk associated with these financial instruments is their respective fair values as stated in the accompanying Consolidated Balance Sheets. Comprehensive Income (Loss) ASC 220, Comprehensive Income Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09, and has subsequently issued various amendments in 2015 and 2016 (ASU No.’s 2015-14, 2016-08, ASU 2014-09, In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASU 2014-15. This ASU provides guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and provides principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. ASU 2014-15 In April 2015, the FASB issued AUS No. 2015-03, Simplifying the Presentation of Debt Issuance Costs In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), requiring lessee’s to recognize assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months on the entity’s balance sheet Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new Leases standard will require new disclosures that depict the amount, timing, and uncertainty of cash flows pertaining to an entity’s leases. The new guidance is effective for fiscal years and for interim periods within those fiscal years, beginning after December 15, 2018, and the Company expects to adopt as of January 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the adoption on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash. The standard addresses diversity in the classification and presentation of restricted cash transfers in the statement of cash flows by requiring that amounts generally described as restricted cash be included in cash and cash equivalents. The new guidance is effective for fiscal years beginning after December 15, 2017 and early adoption is permitted. A retrospective transition method should be applied in the period of transition. Upon adoption, the Company’s presentation of restricted cash in the consolidated statement of cash flows will be updated accordingly. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 2. Cash and Cash Equivalents At December 31, 2016 and December 31, 2015, the Company’s cash and cash equivalents approximated their fair values. The Company currently invests its cash and cash equivalents in money market funds. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The Company follows ASC 820, Fair Value Measurement The Company’s cash and cash equivalents at December 31, 2016 and December 31, 2015 consist of cash and money market funds. Money market funds are valued using quoted market prices. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consist of the following (in thousands): December 31, 2016 2015 Machinery and equipment $ 4,363 $ 4,783 Furniture and fixtures 578 1,144 Lab equipment 1,446 2,138 Computer equipment and software 1,821 2,679 Leasehold improvements 1,734 1,844 Property and equipment 9,942 12,588 Less accumulated depreciation and amortization (9,689 ) (12,289 ) Property and equipment, net $ 253 $ 299 Depreciation expense was $121,000 and $203,000 for the years ended December 31, 2016 and 2015, respectively. In 2016, the Company retired $2.7 million in assets that were no longer in service. |
Sublease Agreement and Lease Ex
Sublease Agreement and Lease Exit Liability | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Sublease Agreement and Lease Exit Liability | 5. Sublease Agreement and Lease Exit Liability: On July 18, 2007, the Company entered into a sublease agreement with Mendel Biotechnology, Inc., or Mendel, to lease approximately 48,000 square feet of the Company’s 72,000 square foot headquarters facility located in Hayward, California which ended in July 2016. During the year ended December 31, 2007, the Company recorded a $2.1 million lease exit liability and related expense for the expected loss on the sublease, in accordance with ASC 420 Exit or Disposal Cost Obligations, Year Ended December 31, 2016 2015 Balance at beginning of year $ 104 $ 297 Accretion expense 2 11 Lease payments (106 ) (204 ) Balance at end of the year $ — $ 104 As of December 31, 2016, the Company had no lease liability. The Company classified all of the $104,000 lease exit liability in current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2015. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | 6. Other Accrued Liabilities At December 31, 2016, other accrued liabilities consisted of accrued expenses for interest of $340,000, expenses for services of $105,000 and payroll withholding liabilities of $51,000. The liability for accrued interest of $340,000 is related to the Convertible Notes as outlined in Note 7 and represents the interest on the Convertible Notes that is accrued but unpaid as of December 31, 2016. At December 31, 2015, other accrued liabilities consisted of accrued expenses for services of $73,000 and payroll withholding liabilities of $39,000. |
Convertible Notes and Warrants
Convertible Notes and Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Text Block [Abstract] | |
Convertible Notes and Warrants | 7. Convertible Notes and Warrants On April 21, 2016, the Company entered into a securities purchase agreement to conduct a private offering, or the Convertible Note Financing, consisting of $23 million in aggregate principal amount of 9% senior convertible notes convertible into shares of common stock, or the Convertible Notes, and 263,436 warrants to purchase shares of the Company’s common stock, or the Warrants. The Convertible Notes bear interest at a rate of 9% per year, payable semiannually in arrears on November 1 and May 1 of each year commencing on November 1, 2016. The Convertible Notes mature on May 1, 2021, unless earlier redeemed or converted. The Convertible Notes are senior unsecured and unsubordinated obligations; rank equal in right of payment to the Company’s existing and future unsecured indebtedness that is not subordinated and are effectively subordinated in right of payment to the Company’s existing and future secured indebtedness. The Convertible Notes are initially convertible into the Company’s common stock at a conversion rate of 191.9386 shares of common stock per $1,000 principal amount of Convertible Notes, representing an initial effective conversion price of $5.21 per share of common stock. The conversion rate may be subject to adjustment upon the occurrence of certain specified events as provided in the indenture governing the Convertible Notes, dated April 25, 2016 between the Company and U.S. Bank National Association, as trustee, or the Indenture, but will not be adjusted for accrued but unpaid interest. Upon conversion of a Convertible Note, the Company will settle the conversion obligation in common stock equal to the conversion rate, together with a cash payment, if applicable. The Convertible Notes are convertible at the option of the holders at any time prior to April 29, 2021. Holders of the Convertible Notes who convert their Convertible Notes in connection with a make-whole fundamental change, as defined in the Indenture, may be entitled to a make-whole premium in the form of an increase to the conversion rate during a specified period following the effective date of the make-whole fundamental change. In addition, upon the occurrence of a fundamental change prior to the maturity date of the Convertible Notes, as defined in the Indenture, holders of the Convertible Notes may require the Company to purchase all or a portion of their Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes to be purchased plus any accrued but unpaid interest to, but excluding, the fundamental change purchase date. On or after December 1, 2017, the Company may redeem for cash all or a portion of the Convertible Notes if the last reported sale price of the Company’s common stock is at any time equal to or greater than 200% of the conversion price then in effect for at least twenty trading days immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Indenture provides for customary events of default which may result in the acceleration of the maturity of the Notes, including, but not limited to, cross acceleration to certain other indebtedness of the Company and its subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency or reorganization all outstanding Convertible Notes will become due and payable immediately without further action or notice. If any other event of default under the Indenture occurs or is continuing, the trustee or holders of at least 25% in aggregate principal amount of the then outstanding Convertible Notes may declare all of the Convertible Notes to be due and payable immediately. The Warrants have a five-year term and are exercisable at $5.21 per share of common stock. The exercise price is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events or upon any distributions of assets, including cash, stock or other property to the Company’s shareholders. The Warrants are exercisable commencing on the later of October 25, 2016 and the date of the public release of top line data related to the conclusion of the ORBIT-3 and ORBIT-4 Phase 3 pivotal clinical trials for the Company’s investigational product Linhaliq inhaled ciprofloxacin. The Warrants became exercisable on December 1, 2016 following the Company’s announcement of the top line data from the Phase 3 clinical trials. If, at any time from and after October 25, 2016, the daily volume-weighted average price of the shares of the Company’s common stock for each of ten consecutive trading days exceeds 150% of the Exercise Price, the Company will have the right to call all or a portion of the Warrants for redemption upon twenty business days prior notice to the holders, at a redemption price of $0.01 per Warrant; provided that the holders of the Warrants may elect to exercise their Warrants upon receipt of any redemption notice from the Company. In accounting for the Convertible Notes and Warrants in the first closing, the Company bifurcated a derivative liability from the debt host and discounted the Convertible Notes for the estimated fair value of the conversion feature and the freestanding Warrants issued in connection with the Convertible Notes. The liability components were measured by estimating their fair value as of the commitment date. On June 9, 2016, the Company obtained Shareholder Approval for the Convertible Notes, the Warrants and the underlying shares, at which point the Conversion Share Cap on the Convertible Notes was lifted. As a result, the bifurcated derivative and warrant liability met the equity classification criteria under ASC 815-40-25 and the liabilities were remeasured at fair value on June 9, 2016 and reclassified to permanent equity. The equity component will not be remeasured in subsequent periods provided that the component continues to meet the conditions necessary for equity classification. The excess of the aggregate face value of the Convertible Notes over the estimated fair value of the liability components is recognized as a debt discount which will be amortized over the term of the Convertible Notes using the effective interest rate method. Amortization of the debt discount is recognized as non-cash interest expense. On April 25, 2016, the initial closing of the Convertible Notes took place under which the Company raised $20 million from a total of two investors and issued 4,319 Warrants to one investor. Of the $20 million, $19.9 million was financed by Grifols, a related party to the Company, as described in Note 8 below. There were 3,319,820 common shares underlying the conversion feature that was bifurcated as a derivative liability due to the Conversion Share Cap. The Company deposited $1.8 million of the net proceeds into an escrow account after the initial closing to fund, when due, the first two scheduled semi-annual interest payments on the Notes. The effective interest rate of the liability component was equal to 22.9% for the year ended December 31, 2016. On July 14, 2016, the second and final closing of the Convertible Notes took place under which the Company raised $3 million from a total of two investors and issued 259,117 Warrants. The fair value of the warrants issued in the second closing was $662,000 and was recorded as a component of equity and discount to the debt host. The Company deposited $215,000 of the net proceeds into an escrow account after the second closing to fund, when due, the first two scheduled semi-annual interest payments on the Convertible Notes. The effective interest rate of the liability component was equal to 16.24% for the year ended December 31, 2016. The financing costs of $2.4 million incurred in connection with the issuance of the Convertible Notes were allocated to the derivative liability, warrants and Convertible Note components based on their relative fair values. Financing costs of $1.4 million allocated to the Convertible Note host are being amortized using the effective interest rate method and recognized as non-cash interest expense over the expected term of the Convertible Notes. For the year ended December 31, 2016, financing costs of $997,000, allocated to the derivative liability and Warrant components were expensed and are included in other expense in the Consolidated Statement of Operations and Comprehensive Loss. In connection with the first closing, the derivative and warrant liabilities were measured at fair value using certain estimated inputs, which are classified within Level 3 of the valuation hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the derivative and warrant liability as of June 9, 2016 (the date of the shareholder vote) and April 21, 2016 (the date of the first closing): June 9, 2016 April 21, 2016 Fair value of underlying stock—per share $ 4.48 $ 4.55 Risk-free interest rate 1.20 % 1.35 % Expected life (years) 4.9 5 Expected volatility 73.16 % 73.95 % Dividend yield 0.0 % 0.0 % The following table summarizes the activity in the derivative liability and the warrant liability for the year ended December 31, 2016: Year Ended December 31, 2016 Fair Value Fair Value of Change Reclassifications to Equity Fair Value 2016 Derivative liability $ — $ 8,748 $ (386 ) $ (8,362 ) $ — Warrant liability — 11 — (11 ) — Total $ — $ 8,759 $ (386 ) $ (8,373 ) $ — For the year December 31, 2016, the Company recognized a gain of $386,000 and $500 on the derivative and warrant liabilities, respectively, related to the change in fair value from the date of commitment to the date the instruments met the equity classification criteria on June 9, 2016 at which point $8.4 million was reclassified from liabilities to equity. The gain has been recorded in other expense in the Consolidated Statement of Operations and Comprehensive Loss. In connection with the second closing, the Warrants issued as a component of equity were measured at fair value using certain estimated inputs, which are classified within Level 3 of the valuation hierarchy. The following assumptions were used in the Black-Scholes Model to measure the fair value of the Warrants as of July 14, 2016: July 14, 2016 Fair value of underlying stock – per share $ 4.58 Risk-free interest rate 1.07 % Expected life (years) 4.78 Expected volatility 72.87 % Dividend yield 0.0 % As of December 31, 2016, the Convertible Notes consisted of the following: December 31, 2016 (in thousands, except Principal value $ 23,000 Unamortized debt discount (8,501 ) Unamortized debt issuance costs (1,280 ) Carrying value of the convertible notes $ 13,219 Conversion rate (shares of common stock per $1,000 principal amount of notes) 191.9386 Conversion price (per share of common stock) $ 5.21 For the year ended December 31, 2016, the Company recognized interest expense associated with its Convertible Notes as follows: Year ended December 31, 2016 (in thousands) Cash Interest Expense Coupon interest expense $ 1,349 Noncash Interest Expense Amortization of debt discount 920 Amortization of transaction costs 137 $ 2,406 As of December 31, 2016, the unamortized debt discount will be amortized over a remaining period of approximately 4.34 years. The if converted value as of December 31, 2016 does not exceed the principal balance of the Convertible Notes. Accrued interest payable at December 31, 2016 is $340,000 and is included in other accrued liabilities. |
Collaboration Agreement
Collaboration Agreement | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration Agreement | 8. Collaboration Agreement Grifols License and Collaboration Agreement On May 20, 2013, the Company and Grifols, S.A., or Grifols and certain other investors, or the Investors, entered into a Stock Purchase Agreement, or the Grifols Stock Purchase Agreement, pursuant to which the Company agreed, subject to the terms and conditions set forth in the Stock Purchase Agreement, to issue and sell a total of 5,244,363 shares of the Company’s common stock, or Common Stock, to Grifols and an additional 3,104,838 shares of Common Stock to the Investors, for a total sale of 8,349,201 shares of Common Stock, or the Company Stock Sale, for a purchase price of $4.96 per share. The aggregate gross consideration paid to the Company in August 2013 in the Company Stock Sale was approximately $41.4 million. In conjunction with signing the Grifols Stock Purchase Agreement, the Company and Grifols agreed to enter into a License and Collaboration Agreement, or the Grifols License Agreement, at the closing of the Company Stock Sale; Grifols and the Company are considered to be related parties and as a result, all transactions between the two entities will be recognized as related party transactions. The License Agreement exclusively licenses the Company’s inhaled liposomal ciprofloxacin compounds for the indication of non-cystic fibrosis bronchiectasis and other indications (the “Program”) to Grifols on a worldwide basis. Grifols has funded development expenses of $65 million for the first indication of non-cystic fibrosis bronchiectasis with all other indications fully funded by Grifols if Grifols elects to pursue such development, and will commercialize products from the Program, or the Products, and pay development milestones and royalties on future commercial sales of Products. The License Agreement is described further below. On July 15, 2013 shareholders of the Company (i) approved certain amendments to the Company’s charter including amendments necessary to increase the total number of shares of Common Stock authorized to be issued by the Company to at least 17,670,765 shares, including the 8,349,201 shares to be sold in the Company Stock Sale, or the Charter Amendment, and (ii) approved the Company’s closing of the Company Stock Sale and entering into the License Agreement, Governance Agreement and other agreements described below and in the Stock Purchase Agreement, or the Transactions. Shareholders of the Company holding more than 50% of the outstanding shares of the Company’s Common Stock voted in favor of these proposals at a special meeting. The closing of the Transactions was subject to certain closing conditions, including, among others the Company’s entering into binding terms with a third party to commercially manufacture Products to permit the Company to satisfy its obligation to commercially supply Grifols with Products. All conditions to the closing of the Transactions were met as of August 27, 2013 and the Company Stock Sale was completed on August 27, 2013. In August of 2013 Grifols paid approximately $26.0 million for the shares of the Company’s common stock at a purchase price of $4.96 per share, which reflected the contractual price for the Company’s common stock as stated in the Stock Purchase Agreement on May 20, 2013. Following the announcement of the collaboration, execution of a supply agreement and satisfaction of the other conditions of closing, the stock price rose to $8.00 per share at the time of closing. Consequently, the contractual price of $4.96 per share resulted in a $3.04 per share discount from the August 27, 2013 closing price of $8.00 per share, a discount of approximately $15.9 million from the fair market value of the common stock on the effective date of the Grifols License and Collaboration Agreement. The Company determined this transaction was not within the scope of ASC 605-25 and, accordingly, the Company recorded the sale of common stock to Grifols at fair value based on the closing price of the Company’s stock on August 27, 2013 at $8.00 per share. This discount, which is a non-cash charge, has been recorded as Collaboration Arrangement Acquisition Cost in the Company’s Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2013. License Agreement The License Agreement was signed simultaneously with the closing of the Company Stock Sale. Under the License Agreement, the Company granted to Grifols an exclusive license to the Program, the lead product candidate of which is named Linhaliq. The license permits Grifols to commercialize Products throughout the world and grants Grifols a back-up manufacturing right to produce Products. The Company is responsible for developing the Product for non-cystic fibrosis bronchiectasis or pulmonary infections associated with non-cystic fibrosis bronchiectasis, in accordance with an agreed upon development plan and pursuant to a Grifols-funded budget of $65 million (which includes allocations for the Company’s internal, fully-burdened expenses). Any excess expenses are the responsibility of the Company. The Company will develop the Product for additional indications at Grifols’ sole expense if Grifols elects to pursue such development. Pursuant to the License Agreement, the Company recognized reimbursements of development costs from Grifols as Contract revenue – related party totaling $23.4 million for the year ended December 31, 2015, for the reimbursement of fully burdened development expenses for collaboration services performed and costs incurred related to the development of Linhaliq for non-cystic fibrosis bronchiectasis. The Grifols-funded budget was fully utilized by the year ended December 31, 2015. The Company is responsible for obtaining regulatory approval of the first indication for the Product in the United States and the European Union. Grifols is responsible for additional regulatory expenses, including the cost of obtaining approval outside the United States and European Union, and the cost of maintaining approvals globally. Grifols is responsible to use diligent efforts to commercialize the Product in countries where regulatory approval has been obtained. The Company is responsible for supplying Grifols’ requirements of the Product, and must establish primary and back-up suppliers acceptable to Grifols. Grifols will purchase Products from the Company on a cost pass-through basis plus a margin. The collaboration between Grifols and the Company is governed by a joint committee comprised of equal representation by the Company and Grifols and operated on a consensus basis. In the event that the parties do not agree, Grifols has deciding authority, except with respect to specific matters specified in the License Agreement. The Company has no obligation to participate in the joint committee after the first commercial sale of the product, but may do so at its discretion. Accordingly, the Company determined that it can separate performance obligations that occur over the development period from performance obligations that will occur during the commercialization period. With respect to the US and EU development and approval of Linhaliq for non-cystic fibrosis bronchiectasis management, Grifols has paid to Aradigm reimbursements of development costs of $65 million and will pay development milestone payments of up to a total of $25 million. Additionally, royalty payments on a country-by-country basis on net sales at a rate of either 12.5% or 20% (depending on the amount of net sales) for so long as there is patent coverage or orphan drug designation (or, if longer, 10 years), except that payments will be reduced by half on a country-by-country basis in the event that another inhaled liposomal product containing ciprofloxacin is being sold for an indication for which the Aradigm product has regulatory approval. Royalty payments may also be reduced by 50% if Aradigm has no valid patent claim or orphan drug protection in that country. The Company’s deliverables included an exclusive license for inhaled ciprofloxacin compounds for the indication of non-cystic fibrosis bronchiectasis and other indications, payment of development costs over $65 million for the non-cystic fibrosis bronchiectasis indication and participation on a Joint Steering Committee, or JSC. Having determined that both the development and JSC do not have standalone value from the license, the Company combined these deliverables into a single unit of accounting. The Company is recognizing reimbursements of development expenses as collaboration services are performed and costs are incurred. During the years ended December 31, 2016 and December 31, 2015, the Company recognized zero and $23.4 million, respectively, in contract revenue – related party relating to services performed and costs incurred during the period under the License Agreement. In addition, the Company has a current deferred revenue balance at December 31, 2016 of $5.0 million representing a milestone payment which was received upon the dosing of the first patient in a Phase III clinical trial. The $5.0 million milestone payment will be recognized as revenue upon receiving the first regulatory approval. As of December 31, 2015, the Company had utilized the full amount of the $65 million of Grifols-funded budget provided under the License Agreement and will not be recognizing any future revenue related to the $65 million Grifols-funded budget. Costs incurred under the Grifols License Agreement in the quarters ended December 31, 2016 and 2015 are zero. Costs incurred under the Grifols License Agreement for the years ended December 31, 2016 and 2015 are zero and $23.4 million, respectively. Research and development expenses incurred under the Grifols License Agreement for the years ended December 31, 2016 and 2015 are zero and $22.2 million, respectively. General and administrative expenses incurred under the Grifols License Agreement for the years ended December 31, 2016 and 2015 are zero and $1.2 million, respectively. Research and development expenses under the Grifols License Agreement decreased approximately $22.2 million and general and administrative expenses decreased approximately $1.2 million as the $65 million expense reimbursement cap was reached in 2015. Development expenses are fully burdened and include direct costs reported as research and development expenses and collaboration-related general and administrative expenses. Governance Agreement The Grifols Governance Agreement sets forth certain rights and obligations of the Company and Grifols concerning, among other things, certain corporate governance matters, certain limitations on future acquisitions of shares of Common Stock by Grifols, and certain rights by Grifols to maintain a target level of ownership in the Company. On the date the Grifols Governance Agreement was executed, the Company’s board of directors was reconstituted to consist of its chief executive officer, three independent directors under the NASDAQ Marketplace Rules and two persons designated by Grifols. The number of persons Grifols is entitled to designate for consideration for election to the Company’s board of directors by the Company’s nominating committee will thereafter depend on the percentage of beneficial ownership of the Company held by Grifols. The Grifols Governance Agreement also provides that during the period beginning on the date of Closing and ending 12 months after the first commercial sale of a Product, or the Restricted Period, Grifols will not directly or indirectly acquire or offer to acquire any shares of Common Stock except (i) with the approval of the Company’s board of directors and a majority of its independent directors, (ii) effected solely to the extent necessary to maintain the beneficial ownership of Grifols and its affiliates at an amount equal to 35%, or the Target Percentage, of the shares of Common Stock on a Fully Diluted Basis (as defined in the Governance Agreement), or (iii) in order to maintain its ownership percentage in the event that the Company issues new securities, in accordance with the provisions of the Governance Agreement. In conjunction with the Note Financing, the Grifols Governance Agreement was amended to raise the Target Percentage to 43.3%. The Restricted Period terminates upon the occurrence of certain events, including a change in control of the Company and a third party publicly proposing to acquire the Company. The Governance Agreement further imposes certain “standstill” obligations on Grifols during the Restricted Period, pursuant to which Grifols and certain related persons are prohibited from soliciting proxies from the Company’s shareholders, granting proxies or entering into voting agreements and seeking additional representation on the Company’s Board of Directors. The Grifols Governance Agreement provides Grifols with certain preemptive rights to participate in future issuances of Common Stock or equivalents of Common Stock by the Company, or the right to acquire shares of Common Stock from third parties or on the open market to maintain its Fully Diluted Ownership at the Target Percentage. The Grifols Governance Agreement requires the approval of Grifols for certain actions by the Company which would adversely affect Grifols’ rights under the Governance Agreement, and for the Company to terminate the employment of its Chief Executive Officer or to appoint any successor Chief Executive Officer. Registration Rights Agreements In connection with and concurrently with the closing of the Company Stock Sale, the Company entered into a Registration Rights Agreement with Grifols, or the Grifols Registration Rights Agreement, pursuant to which the Company agreed to provide registration rights to Grifols with respect to the shares of Common Stock to be acquired in the Company Stock Sale. Under such agreement, Grifols will be entitled to require the Company to file with the SEC certain registration statements under the Securities Act of 1933, as amended, or the Securities Act, with respect to the resale of the shares of Common Stock acquired by Grifols in the Company Stock Sale up to three times on Form S-1 and up to six times on Form S-3, and to include its shares of Common Stock in any registration the Company proposes for its own account or for the account of one or more of its shareholders. In connection with and concurrently with the closing of the Company Stock Sale, the Company and the Investors also entered into a Registration Rights Agreement, or the Investors Registration Rights Agreement. Pursuant to the Investors Registration Rights Agreement, the Company is required to file a registration statement to cover the resale of the shares of the Common Stock acquired by the investors in the Company Stock Sale. The failure on the part of the Company to satisfy the deadlines set forth in the Investors Registration Rights Agreement may subject the Company to payment of certain monetary penalties. In addition, pursuant to the terms of the Stock Purchase Agreement, the Company has agreed, among other things, not to file any other registration statement (other than any registration statement on Form S-4 or Form S-8, and subject to certain other limitations and exclusions) until the Common Stock subject thereto is covered by an effective registration statement or freely salable under Rule 144 under the Securities Act. |
Leases, Commitments and Conting
Leases, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases, Commitments and Contingencies | 9. Leases, Commitments and Contingencies The Company has a lease for a building containing offices, laboratory and manufacturing facilities, which will expire in 2017. The Company’s monthly rent payments fluctuated under the master lease. In accordance with U.S. generally accepted accounting principles, the Company recognized rent expense on a straight-line basis. The Company recorded deferred rent for the difference between the amounts paid and recorded as expense. At December 31, 2016 and 2015, the Company had zero and $37,000 of deferred rent, respectively. For the years ended December 31, 2016 and 2015, building rent expense under operating leases totaled $587,000 and $591,000, respectively. Indemnification The Company from time to time enters into contracts that contingently require the Company to indemnify parties against third party claims. These contracts primarily relate to: (i) real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises, and (ii) agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons from certain liabilities arising out of such persons’ relationships with the Company. To date, the Company has made no payments related to such indemnifications and no liabilities have been recorded for these obligations on the balance sheets at December 31, 2016 or 2015. Legal Matters From time to time, the Company is involved in litigation arising out of the ordinary course of its business. Currently there are no known claims or pending litigation expected to have a material effect on the Company’s overall financial position, results of operations, or liquidity. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | 10. Shareholders’ Equity Shareholder Rights Plan In September 2008, the Company adopted an amended and restated shareholder rights plan, which replaced the rights plan originally adopted in August 1998. Pursuant to the rights plan, as amended and restated, the Company distributes rights to purchase shares of Series A Junior Participating Preferred Stock as a dividend at the rate of one right for each share of common stock outstanding. Until the rights are distributed, the rights trade with, and are not separable from, the Company’s common stock and are not exercisable. The rights are designed to guard against partial tender offers and other abusive and coercive tactics that might be used in an attempt to gain control of the Company or to deprive the Company’s shareholders of their interest in the Company’s long-term value. The shareholder rights plan seeks to achieve these goals by encouraging a potential acquirer to negotiate with the Company’s Board of Directors. The rights will expire at the close of business on September 8, 2018. Stock Option Plans: 2005 Equity Incentive Plan, and 2015 Equity Incentive Plan On March 13, 2015 the Board adopted and, on May 14, 2015 the Company’s shareholders approved, the 2015 Equity Incentive Plan, or the 2015 Plan. The 2015 Plan replaces the Company’s 2005 Equity Incentive Plan which expired in March 2015. The 2015 Plan is intended to promote our long-term success and increase shareholder value by attracting, motivating, and retaining non-employee directors, officers, employees, advisors, consultants and independent contractors, and allows the flexibility to grant a variety of awards to eligible individuals, thereby strengthening their commitment to the Company’s success and aligning their interests with those of the Company’s shareholders. The Company did not request that shareholders authorize any new shares of Common Stock in connection with the approval of the 2015 Plan; rather, the shares authorized for issuance under the 2005 Plan are now available for issuance under the 2015 Plan. In March 2016, the Company’s Board of Directors amended, and in June 2016 the Company’s shareholders approved, an amendment to the 2015 Plan increasing the shares of common stock authorized for issuance by 2,400,000 shares. Options granted under the 2005 Plan and the 2015 Plan expire no later than 10 years from the date of grant and may be either incentive or non-statutory stock options. For incentive and non-statutory stock option grants, the option price shall be at least 100% and 85%, respectively, of the fair value on the date of grant, as determined by the Company’s Board of Directors. If at any time the Company grants an option, and the optionee directly or by attribution owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, the option price shall be at least 110% of the fair value and shall not be exercisable more than five years after the date of grant. Options granted under the 2005 Plan and the 2015 Plan may be immediately exercisable if permitted in the specific grant approved by the Board of Directors and, if exercised early may be subject to repurchase provisions. The shares acquired generally vest over a period of four years from the date of grant. Both Plans also provides for a transition from employee to consultant status without termination of the vesting period as a result of such transition. Under both Plans, employees may exercise options in exchange for a note payable to the Company, if permitted under the applicable grant. As of December 31, 2016 and 2015, there were no outstanding notes receivable from shareholders. Any unvested stock issued is subject to repurchase agreements whereby the Company has the option to repurchase unvested shares upon termination of employment at the original issue price. The common stock subject to repurchase has voting rights, but cannot be resold prior to vesting. No grants with early exercise provisions have been made under the 2005 Plan or 2015 Plan and no shares have been repurchased. The following is a summary of activity under the 2005 Plan and the 2015 Plan for the year ended December 31, 2016: Shares Available for Balance at January 1, 2016 252,725 Increase in authorized shares 2,400,000 Options granted (1,005,323 ) Options cancelled 28,870 Restricted stock awards granted (166,000 ) Balance at December 31, 2016 1,510,272 Stock Options Number of Shares Weighted Average Exercise Price Weighted Aggregate Outstanding at January 1, 2016 947,142 $ 11.40 Options granted 1,005,323 $ 4.45 Options cancelled (28,870 ) $ 72.10 Outstanding at December 31, 2016 1,923,595 $ 6.86 8.31 $ — Ending vested and expected to vest 1,895,273 $ 6.87 8.30 $ — Ending exercisable 588,585 $ 9.63 7.01 $ — The weighted-average grant-date fair value of options granted during the years ended December 31, 2016 and 2015 is discussed below under “ Valuation Assumptions A summary of the activity of the Company’s unvested restricted stock and performance bonus stock award activities for the year ending December 31, 2016 is presented below. The ending balance represents the maximum number of shares that could be earned or vested under the 2005 Plan and 2015 Plan: Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value Outstanding at January 1, 2016 300 $ 57.60 Restricted stock awards granted 166,000 3.87 Restricted stock awards vested (14,062 ) 4.04 Outstanding at December 31, 2016 152,238 $ 3.96 Recipients of restricted stock do not pay cash consideration for the shares and have the right to vote all shares subject to the grant. The weighted average grant date fair value of restricted stock awards is based on the closing price of the Company’s common stock on the date of grant. The total fair value of restricted stock awards that vested during the years ended December 31, 2016 and 2015 was $53,000 and zero, respectively. Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Outstanding at January 1, 2016 10,306 $ 5.34 Restricted stock units granted — — Restricted stock units vested — — Outstanding at December 31, 2016 10,306 $ 5.34 As of December 31, 2016, there was no unrecognized compensation cost related to restricted stock unit arrangements granted under the Plans. The total fair value of shares vested during the years ended December 31, 2016 and 2015 was zero for both years. Performance-based Stock Options During the year ended December 31, 2016, the Company granted to certain executives 595,000 performance-based stock options with a weighted average exercise price of $4.09 (contingent upon shareholder approval which was received in June 2016). These performance-based stock options have a contractual term of ten years and vesting is dependent upon meeting certain specified company-wide performance goals. The weighted average grant date fair value of these performance-based stock options is discussed below under “ Valuation Assumptions Employee Stock Purchase Plan Employees generally are eligible to participate in the ESPP if they have been continuously employed by the Company for at least 10 days prior to the first day of the offering period and are customarily employed at least 20 hours per week and at least five months per calendar year and are not a 5% or greater shareholder. Shares may be purchased under the ESPP at 85% of the lesser of the fair market value of the common stock on the grant date or purchase date. Employee contributions, through payroll deductions, are limited to the lesser of 15% of earnings or $25,000. As of December 31, 2016, a total of 286,250 shares have been reserved for issuance under the ESPP, of which 195,695 shares have been issued to participants leaving a remaining balance of 90,555 available authorized shares. Compensation expense related to the ESPP was $73,000 and $104,000 for the years ended December 31, 2016 and 2015, respectively. The fair value of employee stock purchase rights under the ESPP is discussed below under “ Valuation Assumptions Stock-Based Compensation Expense The Company recognizes stock-based compensation expense based on the fair value of that portion of stock options and restricted stock awards that are ultimately expected to vest during the period. Stock-based compensation expense recognized in the Consolidated Statement of Operations and Comprehensive Loss includes compensation expense for stock-based awards based on the estimated grant date fair value over the requisite service period. The following table shows stock-based compensation expense included in the Consolidated Statement of Operations and Comprehensive loss for the years ended December 31, 2016 and 2015, (in thousands, except per share amounts): 2016 2015 Costs and Expenses Research and development $ 826 $ 522 General and administrative 850 507 Total stock-based compensation expense $ 1,676 $ 1,029 Impact on basic and diluted net loss per common share $ (0.11 ) $ (0.07 ) There was no capitalized stock-based compensation expense as of December 31, 2016. Since the Company has cumulative net losses through December 31, 2016, there was no tax benefit associated with stock-based compensation expense. The total amount of unrecognized compensation expense related to unvested stock options and stock purchases, net of forfeitures, was $2,051,000 as of December 31, 2016.This amount will be recognized over a weighted average period of 1.0 year. As of December 31, 2016, there was $397,000 of unrecognized compensation expense, net of forfeitures, related to unvested restricted stock awards that is expected to be recognized over a weighted average period of 1.9 years. There also was $25,000 of unrecognized compensation expense related to the current ESPP offering period as of December 31, 2016, which is expected to be through March 31, 2017. Valuation Assumptions The fair value of stock options and employee stock purchase rights are estimated at the date of grant using the Black-Scholes option pricing model based on the following assumptions: Expected term Expected volatility Risk-free interest rate Expected dividend yield The weighted average assumptions for employee service-based options (which for purposes of this table includes members of the board of directors) were as follows: Years Ended December 31 2016 2015 Dividend yield 0.0 % 0.0 % Volatility factor 74.0 % 83.9 % Risk-free interest rate 1.4 % 1.7 % Expected term (in years) 5.5 5.7 Weighted-average fair value of options granted during the periods $ 3.13 $ 4.95 The weighted average assumptions for performance-based options were as follows: Year Ended December 31, 2016 Dividend yield 0.0 % Volatility factor 77.1 % Risk-free interest rate 1.5 % Expected term (in years) 5.7 Weighted-average fair value of options granted during the period $ 2.68 The weighted average assumptions for employee stock purchase rights under the ESPP were as follows: Years Ended December 31, 2016 2015 Dividend yield N/A 0.0 % Volatility factor N/A 65.6 % Risk-free interest rate N/A 0.06 % Expected life (years) N/A 2.00 Weighted-average fair value of purchase rights granted during the period N/A $ 3.38 There were no employee stock purchase rights valued during the year ended December 31, 2016 as the current offering period was valued on April 1, 2015 and is over a two year period. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 11. Net Loss Per Common Share The Company computes basic net loss per common share using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of shares of common stock subject to repurchase. The effects of including the incremental shares associated with options, warrants and unvested restrictive are anti-dilutive, and are not included in the diluted weighted average number of shares of common stock outstanding for the years ending December 31, 2016 and 2015. The Company excluded the following securities from the calculation of diluted net loss per common share for the years ended December 31, 2016 and 2015, as their effect would be anti-dilutive (in thousands): Year ended December 31, 2016 2015 Common shares underlying convertible notes .. 4,269 — Outstanding stock options .. 1,924 947 Common shares underlying warrants 263 71 Unvested restricted stock .. 152 — Unvested restricted stock units .. 10 10 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 12. Employee Benefit Plans The Company provides a 401(k) Plan for all full-time employees. Employees can contribute on a pretax basis up to the 2016 statutory limit of $18,000 (plus an additional $6,000 for employees that are 50 years and older). The Company matches employees’ contributions up to a maximum of three percent of an employee’s annual salary based upon the employee’s contribution and certain other limitations. The Company’s employer matching contribution expense was $88,000 and $47,000 in 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes In 2016 and 2015, the Company recorded an income tax benefit of zero. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for tax purposes as well as net operating loss and tax credit carryforwards. Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2016 2015 Net operating loss carryforwards $ 25,536 $ 18,406 Research and development credits 6,509 6,509 Federal orphan drug credits 18,599 11,011 Other 3,572 2,130 Total deferred tax assets 54,216 38,056 Valuation allowance (54,216 ) (38,056 ) Net deferred tax assets $ — $ — The Company considers all available evidence, both positive and negative, including historical levels of taxable income, expectations and risks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. At December 31, 2016 and 2015, based on the Company’s analysis of all available evidence, both positive and negative, it was considered more likely than not that the Company’s deferred tax assets would not be realized, and as a result, the Company recorded a valuation allowance for its deferred tax assets. The valuation allowance increased by $16.2 million during the year ended December 31, 2016 and increased by $8.2 million during the year ended December 31, 2015. In accordance with ASC 718 Compensation-Stock Compensation The difference between the income tax benefit and the amount computed by applying the federal statutory income tax rate to loss before income taxes is as follows (in thousands): Year Ended December 31, 2016 2015 Income tax benefit at federal statutory rate $ (11,531 ) $ (6,016 ) State taxes (net of federal) (391 ) (17 ) Credits (4,932 ) (2,466 ) Other 694 276 Change in valuation allowance 16,160 8,223 Total $ — $ — As of December 31, 2016, the Company had federal net operating loss carryforwards of approximately $63.8 million and federal orphan drug credit carryforwards of approximately $18.6 million, which expire in the years 2028 through 2036. The Company also had California net operating loss carryforwards of approximately $44.1 million, which expire in the years 2017 through 2036, and California research and development tax credit carryforwards of approximately $9.9 million, which do not expire. None of the federal and state net operating loss carryforwards represent stock option deductions arising from activity under the Company’s stock option plan. Utilization of the Company’s NOL and credit carryforwards may be subject to additional annual limitations based on future stock issuances or ownership changes. Such future limitations could result in the expiration of the net operating loss and credit carryforwards before utilization. Based on the analyses performed on ownership changes that have occurred from inception through December 31, 2016, the Company expects to be able to use the NOL and tax credit carryforwards as noted above. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is subject to U.S. federal and state income tax examinations by tax authorities for tax years from 1998 due to net operating losses and tax credits that are being carried forward for tax purposes. The Company does not have any unrecognized tax benefits, or interest and penalties accrued on unrecognized tax benefits, at December 31, 2016, or during the two years then ended. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. |
Quarterly Results of Operations
Quarterly Results of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations | 14. Quarterly Results of Operations (unaudited) Following is a summary of the quarterly results of operations for the years ended December 31, 2016 and 2015 (in thousands, except per share data): March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Total revenue $ 6 $ 14 $ 50 $ 125 Operating expenses: Research and development 6,451 6,235 5,836 5,865 General and administrative 1,644 1,385 1,460 1,339 Restructuring and asset impairment 1 1 — — Total expenses 8,096 7,621 7,296 7,204 Loss from operations (8,090 ) (7,607 ) (7,246 ) (7,079 ) Interest income (expense), net 4 (551 ) (864 ) (913 ) Other income (expense) — (571 ) (76 ) 55 Loss before income taxes (8,086 ) (8,729 ) (8,186 ) (7,937 ) Income tax provision — — — — Net loss and comprehensive loss $ (8,086 ) $ (8,729 ) $ (8,186 ) $ (7,937 ) Basic and diluted net loss per common share $ (0.55 ) $ (0.59 ) $ (0.55 ) $ (0.54 ) Shares used in computing basic and diluted net loss per common share 14,761 14,778 14,782 14,795 March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Total revenues $ 8,768 $ 9,952 $ 4,674 $ 35 Operating expenses: Research and development 8,361 9,754 8,880 8,281 General and administrative 1,542 1,339 1,320 1,093 Restructuring and asset impairment 4 3 2 2 Total expenses 9,907 11,096 10,202 9,376 Loss from operations (1,139 ) (1,144 ) (5,528 ) (9,341 ) Interest income 8 7 7 7 Other expense (32 ) (8 ) (28 ) (18 ) Loss before income taxes (1,163 ) (1,145 ) (5,549 ) (9,352 ) Income tax provision — — — — Net loss and comprehensive loss $ (1,163 ) $ (1,145 ) $ (5,549 ) $ (9,352 ) Basic and diluted net loss per common share $ (0.08 ) $ (0.08 ) $ (0.38 ) $ (0.63 ) Shares used in computing basic and diluted net loss per common share 14,727 14,749 14,751 14,761 |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 15. Going Concern As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $438.4 million as of December 31, 2016 that includes a net loss of $32.9 million for the year ended December 31, 2016 which raises doubt about the Company’s ability to continue as a going concern. The Company’s current assets of $24.8 million exceed current liabilities of $5.8 million by $19.0 million. The Company believes that its cash and cash equivalents of approximately $19.5 million as of February 28, 2017 are sufficient to fund its operations through 2017 provided the Company is able to earn the $5 million milestone payment from Grifols upon the first regulatory filing. However, the Company will need to raise additional capital in 2017 to maintain the Company’s current level of product development activity. Accordingly the Company anticipates raising additional capital in 2017 through the issuance of debt or equity securities, royalty financing transactions, strategic transactions or otherwise, to fund the Company’s operations and continue the development of the Company’s leading product candidate Linhaliq. Since cash and cash equivalents are insufficient to fund the Company’s operations for the ensuing twelve months from the filing of this report, there is substantial doubt about the Company’s ability to continue to operate as a going concern. While recoverability of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events The Company has evaluated subsequent events that have occurred after December 31, 2016 and determined that there were no events that occurred during this reporting period which require recognition or disclosure in the consolidated financial statements except as follows: in February 2017, the Company received a cash rebate under the Australian R&D Tax Incentive Program of approximately $675,000 for qualified research and development expenses incurred in Australia during the period of July 1, 2015 through June 30, 2016. At December 31, 2016, the Company had not completed and filed the application for the R&D rebate and as the Company had no previous experience with filing for and receiving such a rebate did not consider the receipt of the rebate to be probable. |
Organization and Summary of S23
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Aradigm Corporation, or the Company, is a California corporation, incorporated in 1991, focused on the development and commercialization of drugs delivered by inhalation for the prevention and treatment of severe respiratory diseases. The Company’s principal activities to date have included conducting research and development and developing collaborations. Management does not anticipate receiving revenues from the sale of any of its products in the upcoming year. The Company operates as a single operating segment. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Liquidity and Financial Condition | Liquidity and Financial Condition The Company has incurred significant operating losses and negative cash flows from operations. At December 31, 2016, the Company had an accumulated deficit of approximately $438.4 million, working capital of approximately $19.0 million and shareholders’ equity of approximately $1.0 million. The Company believes that its cash and cash equivalents totaling approximately $22.6 million as of December 31, 2016 will be sufficient to fund its operations at least through 2017, provided the Company is able to earn the $5 million milestone payment from Grifols upon the first regulatory filing. However, the Company will need to raise additional capital in 2017 to maintain the Company’s current level of product development activity. Accordingly, the Company anticipates raising additional capital in 2017, through issuance of debt or equity securities, royalty financing transactions, strategic transactions or otherwise, to fund the Company’s operations and continue development of the Company’s leading product candidate Linhaliq. No assurance can be given that the Company will be successful in raising such additional capital on favorable terms or at all. If the Company is unable to obtain additional funds when required it will, delay or reduce the scope of all or a portion of its development programs or dispose of assets or technology. |
Use of Estimates | Use of Estimates The preparation of financial statements, in conformity with United States generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include useful lives for property and equipment and related depreciation calculations, assumptions for valuing options and warrants, and income taxes. Actual results could differ from these estimates. |
Cash Equivalents | Cash Equivalents All highly liquid investments with maturities of three months or less at the time of purchase are classified as cash equivalents. |
Restricted Cash | Restricted Cash The Company classifies transfers to the restricted cash balance in the statement of cash flows based on the nature of the restriction. At December 31, 2016, the Company has $1.0 million in restricted cash held in an interest bearing escrow account for the purpose of making future interest payments on the Convertible Notes, as outlined in Note 7 below. The Company is required to maintain such deposits sufficient to pay all required payments of interest through May 1, 2017. |
Property and Equipment | Property and Equipment The Company records property and equipment at cost and calculates depreciation using the straight-line method over the estimated useful lives of the respective assets. Machinery and equipment includes external costs incurred for validation of the equipment. The Company does not capitalize internal validation expense. Computer equipment and software includes capitalized computer software. All of the Company’s capitalized software is purchased; the Company has no internally developed computer software. Leasehold improvements are amortized over the shorter of the term of the lease or useful life of the improvement. The standard estimated useful lives of property and equipment are as follows: Computer equipment and software 3 years Furniture and fixtures 7 years Lab equipment 5 years Machinery and equipment 5 years Leasehold improvements 5 to 17 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of property and equipment may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values and the loss is recognized in the Consolidated Statements of Operations and Comprehensive Loss. |
Convertible Instruments | Convertible Instruments The Company accounts for hybrid contracts that feature conversion options in accordance with generally accepted accounting principles in the United States. ASC 815, Derivatives and Hedging Activities The Company accounts for convertible instruments (when it has determined that the embedded conversion options should be bifurcated from their host instruments) in accordance with ASC 815. Under ASC 815, a portion of the proceeds received upon the issuance of the hybrid contract is allocated to the fair value of the derivative. The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in results of operations. |
Warrants Issued in Connection with Financings | Warrants Issued in Connection with Financings The Company generally accounts for warrants issued in connection with financings as a component of equity, unless there is a possibility that the Company may have to settle the warrants in cash. For warrants issued with the deemed possibility of a cash settlement, the Company records the fair value of the issued warrants as a liability at each reporting date and records changes in the estimated fair value as a non-cash gain or loss in the condensed consolidated statements of operations. The fair values of warrants have been determined using the Black Scholes Merton Option Pricing valuation model, or the Black-Scholes Model. The Black-Scholes Model provides for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity. These values are subject to a significant degree of judgment on the part of the Company. |
Accounting for Costs Associated with Exit or Disposal Activities | Accounting for Costs Associated with Exit or Disposal Activities The Company recognizes a liability for the cost associated with an exit or disposal activity that is measured initially at its fair value in the period in which the liability is incurred. Costs to terminate an operating lease or other contracts are (a) costs to terminate the contract before the end of its term or (b) costs that will continue to be incurred under the contract for its remaining term without economic benefit to the entity. In periods subsequent to initial measurement, changes to the liability are measured using the credit adjusted risk-free rate that was used to measure the liability initially. |
Revenue Recognition | Revenue Recognition Contract revenues consist of revenues from grants, collaboration agreements and feasibility studies. License and collaboration revenue is primarily generated through agreements with strategic partners for the development and commercialization of our product candidates. The terms of the agreement typically include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of milestones and royalties on net product sales. The Company recognizes revenue under the provisions of the Securities and Exchange Commission issued Staff Accounting Bulletin 104, Topic 13, Revenue Recognition Revised and Updated . Revenue is recognized when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed and determinable and collection is reasonably assured. Multiple-deliverable arrangements, such as license and development agreements, are analyzed to determine whether the deliverables can be separated or whether they must be accounted for as a single unit of accounting. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price method and the appropriate revenue recognition principles are applied to each unit. When the Company determines that an arrangement should be accounted for as a single unit of accounting, it must determine the period over which the performance obligations will be performed and revenue will be recognized. The Company estimates its performance period used for revenue recognition based on the specific terms of each agreement, and adjusts the performance periods, if appropriate, based on the applicable facts and circumstances. Significant management judgment may be required to determine the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. The Company prospectively adopted the provisions of Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605); Multiple-Deliverable Revenue Arrangements The Company allocates non-contingent consideration to each stand-alone deliverable based upon the relative selling price of each element. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence, or VSOE, of selling price, if it exists, or third-party evidence, or TPE, of selling price, if it exists. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses best estimated selling price, or BESP, for that deliverable. Assuming the elements meet the revenue recognition guidelines, the revenue recognition methodology prescribed for each unit of accounting is summarized below: Upfront Fees Funded Research and Development and Grant Revenue Milestones Royalties— |
Research and Development | Research and Development Research and development expenses consist of costs incurred for company-sponsored, collaborative and contracted research and development activities. These costs include direct and research-related overhead expenses. The Company expenses research and development costs as such costs are incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for share-based payment arrangements in accordance with ASC 718, Compensation-Stock Compensation ASC 505-50, Equity-Equity Based Payments to Non-Employees |
Income Taxes | Income Taxes The Company makes certain estimates and judgments in determining income tax expense for consolidated financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of revenue and expense for tax and financial statement purposes. As part of the process of preparing the financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves the estimation of the current tax exposure under the most recent tax laws and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities which are included in the Company’s consolidated balance sheets. The Company assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including its historical levels of income and losses, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. If the Company does not consider it more likely than not that it will recover its deferred tax assets, it will record a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable. At December 31, 2016 and 2015, the Company believed that the amount of its deferred income taxes would not be ultimately recovered. Accordingly, the Company recorded a full valuation allowance for deferred tax assets. However, should there be a change in the Company’s ability to recover its deferred tax assets, it would recognize a benefit to its tax provision in the period in which it determines that it is more likely than not that it will recover its deferred tax assets. |
Net Income/(Loss) Per Common Share | Net Income/(Loss) Per Common Share Basic net income/(loss) per common share is computed using the weighted-average number of shares of common stock outstanding during the period less the weighted-average number of shares subject to repurchase. Diluted net income/(loss) per common share is based on the weighted average number of common and common equivalent shares, such as stock options and unvested restricted stock shares outstanding during the period. |
Significant Concentrations | Significant Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. Risks associated with these instruments are mitigated by banking with, and only purchasing commercial paper and corporate notes from, creditworthy institutions. The maximum amount of loss due to credit risk associated with these financial instruments is their respective fair values as stated in the accompanying Consolidated Balance Sheets. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) ASC 220, Comprehensive Income |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09, and has subsequently issued various amendments in 2015 and 2016 (ASU No.’s 2015-14, 2016-08, ASU 2014-09, In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASU 2014-15. This ASU provides guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and provides principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. ASU 2014-15 In April 2015, the FASB issued AUS No. 2015-03, Simplifying the Presentation of Debt Issuance Costs In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), requiring lessee’s to recognize assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months on the entity’s balance sheet Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new Leases standard will require new disclosures that depict the amount, timing, and uncertainty of cash flows pertaining to an entity’s leases. The new guidance is effective for fiscal years and for interim periods within those fiscal years, beginning after December 15, 2018, and the Company expects to adopt as of January 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the adoption on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash. The standard addresses diversity in the classification and presentation of restricted cash transfers in the statement of cash flows by requiring that amounts generally described as restricted cash be included in cash and cash equivalents. The new guidance is effective for fiscal years beginning after December 15, 2017 and early adoption is permitted. A retrospective transition method should be applied in the period of transition. Upon adoption, the Company’s presentation of restricted cash in the consolidated statement of cash flows will be updated accordingly. |
Organization and Summary of S24
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Standard Estimated Useful Lives of Property and Equipment | The standard estimated useful lives of property and equipment are as follows: Computer equipment and software 3 years Furniture and fixtures 7 years Lab equipment 5 years Machinery and equipment 5 years Leasehold improvements 5 to 17 years |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following (in thousands): December 31, 2016 2015 Machinery and equipment $ 4,363 $ 4,783 Furniture and fixtures 578 1,144 Lab equipment 1,446 2,138 Computer equipment and software 1,821 2,679 Leasehold improvements 1,734 1,844 Property and equipment 9,942 12,588 Less accumulated depreciation and amortization (9,689 ) (12,289 ) Property and equipment, net $ 253 $ 299 |
Sublease Agreement and Lease 26
Sublease Agreement and Lease Exit Liability (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Lease Exit Liability Activity | The lease exit liability activity for the years ended December 31, 2016 and 2015 are as follows (in thousands): Year Ended December 31, 2016 2015 Balance at beginning of year $ 104 $ 297 Accretion expense 2 11 Lease payments (106 ) (204 ) Balance at end of the year $ — $ 104 |
Convertible Notes and Warrants
Convertible Notes and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of activity in Derivative Liability and Warrant Liability | The following table summarizes the activity in the derivative liability and the warrant liability for the year ended December 31, 2016: Year Ended December 31, 2016 Fair Value Fair Value of Change Reclassifications to Equity Fair Value 2016 Derivative liability $ — $ 8,748 $ (386 ) $ (8,362 ) $ — Warrant liability — 11 — (11 ) — Total $ — $ 8,759 $ (386 ) $ (8,373 ) $ — |
Summary of Convertible Notes | As of December 31, 2016, the Convertible Notes consisted of the following: December 31, 2016 (in thousands, except Principal value $ 23,000 Unamortized debt discount (8,501 ) Unamortized debt issuance costs (1,280 ) Carrying value of the convertible notes $ 13,219 Conversion rate (shares of common stock per $1,000 principal amount of notes) 191.9386 Conversion price (per share of common stock) $ 5.21 |
Summary of Interest Expense Associated with Convertible Notes | For the year ended December 31, 2016, the Company recognized interest expense associated with its Convertible Notes as follows: Year ended December 31, 2016 (in thousands) Cash Interest Expense Coupon interest expense $ 1,349 Noncash Interest Expense Amortization of debt discount 920 Amortization of transaction costs 137 $ 2,406 |
Initial Closing [Member] | |
Schedule of Fair Value Assumption Used to Measure Derivative and Warrant Liability | The following assumptions were used in the Black-Scholes Model to measure the fair value of the derivative and warrant liability as of June 9, 2016 (the date of the shareholder vote) and April 21, 2016 (the date of the first closing): June 9, 2016 April 21, 2016 Fair value of underlying stock—per share $ 4.48 $ 4.55 Risk-free interest rate 1.20 % 1.35 % Expected life (years) 4.9 5 Expected volatility 73.16 % 73.95 % Dividend yield 0.0 % 0.0 % |
Second and Final Closing [Member] | |
Schedule of Fair Value Assumption Used to Measure Derivative and Warrant Liability | The following assumptions were used in the Black-Scholes Model to measure the fair value of the Warrants as of July 14, 2016: July 14, 2016 Fair value of underlying stock – per share $ 4.58 Risk-free interest rate 1.07 % Expected life (years) 4.78 Expected volatility 72.87 % Dividend yield 0.0 % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Activity Under Stock Option Plan | The following is a summary of activity under the 2005 Plan and the 2015 Plan for the year ended December 31, 2016: Shares Available for Balance at January 1, 2016 252,725 Increase in authorized shares 2,400,000 Options granted (1,005,323 ) Options cancelled 28,870 Restricted stock awards granted (166,000 ) Balance at December 31, 2016 1,510,272 Stock Options Number of Shares Weighted Average Exercise Price Weighted Aggregate Outstanding at January 1, 2016 947,142 $ 11.40 Options granted 1,005,323 $ 4.45 Options cancelled (28,870 ) $ 72.10 Outstanding at December 31, 2016 1,923,595 $ 6.86 8.31 $ — Ending vested and expected to vest 1,895,273 $ 6.87 8.30 $ — Ending exercisable 588,585 $ 9.63 7.01 $ — |
Schedule of Stock-Based Compensation Expense | The following table shows stock-based compensation expense included in the Consolidated Statement of Operations and Comprehensive loss for the years ended December 31, 2016 and 2015, (in thousands, except per share amounts): 2016 2015 Costs and Expenses Research and development $ 826 $ 522 General and administrative 850 507 Total stock-based compensation expense $ 1,676 $ 1,029 Impact on basic and diluted net loss per common share $ (0.11 ) $ (0.07 ) |
Employee Options [Member] | |
Schedule of Stock Based Compensation Valuation Assumption | The weighted average assumptions for employee stock purchase rights under the ESPP were as follows: Years Ended December 31, 2016 2015 Dividend yield N/A 0.0 % Volatility factor N/A 65.6 % Risk-free interest rate N/A 0.06 % Expected life (years) N/A 2.00 Weighted-average fair value of purchase rights granted during the period N/A $ 3.38 |
Restricted Stock Units [Member] | |
Schedule of Unvested Restricted Stock and Performance Bonus Stock Awards | Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Outstanding at January 1, 2016 10,306 $ 5.34 Restricted stock units granted — — Restricted stock units vested — — Outstanding at December 31, 2016 10,306 $ 5.34 |
Restricted Stock Awards [Member] | |
Schedule of Unvested Restricted Stock and Performance Bonus Stock Awards | A summary of the activity of the Company’s unvested restricted stock and performance bonus stock award activities for the year ending December 31, 2016 is presented below. The ending balance represents the maximum number of shares that could be earned or vested under the 2005 Plan and 2015 Plan: Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value Outstanding at January 1, 2016 300 $ 57.60 Restricted stock awards granted 166,000 3.87 Restricted stock awards vested (14,062 ) 4.04 Outstanding at December 31, 2016 152,238 $ 3.96 |
Service Based Option [Member] | |
Schedule of Stock Based Compensation Valuation Assumption | The weighted average assumptions for employee service-based options (which for purposes of this table includes members of the board of directors) were as follows: Years Ended December 31 2016 2015 Dividend yield 0.0 % 0.0 % Volatility factor 74.0 % 83.9 % Risk-free interest rate 1.4 % 1.7 % Expected term (in years) 5.5 5.7 Weighted-average fair value of options granted during the periods $ 3.13 $ 4.95 |
Performance-Based Options [Member] | |
Schedule of Stock Based Compensation Valuation Assumption | The weighted average assumptions for performance-based options were as follows: Year Ended December 31, 2016 Dividend yield 0.0 % Volatility factor 77.1 % Risk-free interest rate 1.5 % Expected term (in years) 5.7 Weighted-average fair value of options granted during the period $ 2.68 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Securities Excluded from Calculation of Diluted Net Loss per Common Share | The Company excluded the following securities from the calculation of diluted net loss per common share for the years ended December 31, 2016 and 2015, as their effect would be anti-dilutive (in thousands): Year ended December 31, 2016 2015 Common shares underlying convertible notes .. 4,269 — Outstanding stock options .. 1,924 947 Common shares underlying warrants 263 71 Unvested restricted stock .. 152 — Unvested restricted stock units .. 10 10 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Significant Components of Company's Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2016 2015 Net operating loss carryforwards $ 25,536 $ 18,406 Research and development credits 6,509 6,509 Federal orphan drug credits 18,599 11,011 Other 3,572 2,130 Total deferred tax assets 54,216 38,056 Valuation allowance (54,216 ) (38,056 ) Net deferred tax assets $ — $ — |
Schedule of Difference Between Income Tax Benefit and Computation Amount of Federal Statutory Income Tax Rate | The difference between the income tax benefit and the amount computed by applying the federal statutory income tax rate to loss before income taxes is as follows (in thousands): Year Ended December 31, 2016 2015 Income tax benefit at federal statutory rate $ (11,531 ) $ (6,016 ) State taxes (net of federal) (391 ) (17 ) Credits (4,932 ) (2,466 ) Other 694 276 Change in valuation allowance 16,160 8,223 Total $ — $ — |
Quarterly Results of Operatio31
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Results of Operations | Following is a summary of the quarterly results of operations for the years ended December 31, 2016 and 2015 (in thousands, except per share data): March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Total revenue $ 6 $ 14 $ 50 $ 125 Operating expenses: Research and development 6,451 6,235 5,836 5,865 General and administrative 1,644 1,385 1,460 1,339 Restructuring and asset impairment 1 1 — — Total expenses 8,096 7,621 7,296 7,204 Loss from operations (8,090 ) (7,607 ) (7,246 ) (7,079 ) Interest income (expense), net 4 (551 ) (864 ) (913 ) Other income (expense) — (571 ) (76 ) 55 Loss before income taxes (8,086 ) (8,729 ) (8,186 ) (7,937 ) Income tax provision — — — — Net loss and comprehensive loss $ (8,086 ) $ (8,729 ) $ (8,186 ) $ (7,937 ) Basic and diluted net loss per common share $ (0.55 ) $ (0.59 ) $ (0.55 ) $ (0.54 ) Shares used in computing basic and diluted net loss per common share 14,761 14,778 14,782 14,795 March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Total revenues $ 8,768 $ 9,952 $ 4,674 $ 35 Operating expenses: Research and development 8,361 9,754 8,880 8,281 General and administrative 1,542 1,339 1,320 1,093 Restructuring and asset impairment 4 3 2 2 Total expenses 9,907 11,096 10,202 9,376 Loss from operations (1,139 ) (1,144 ) (5,528 ) (9,341 ) Interest income 8 7 7 7 Other expense (32 ) (8 ) (28 ) (18 ) Loss before income taxes (1,163 ) (1,145 ) (5,549 ) (9,352 ) Income tax provision — — — — Net loss and comprehensive loss $ (1,163 ) $ (1,145 ) $ (5,549 ) $ (9,352 ) Basic and diluted net loss per common share $ (0.08 ) $ (0.08 ) $ (0.38 ) $ (0.63 ) Shares used in computing basic and diluted net loss per common share 14,727 14,749 14,751 14,761 |
Organization and Summary of S32
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Summary Of Organization And Operations [Line Items] | |||
Number of operating segment | Segment | 1 | ||
Accumulated deficit | $ (438,419) | $ (405,481) | |
Working capital | 19,000 | ||
Shareholders' equity | 987 | 23,110 | $ 39,115 |
Cash and cash equivalents | 22,591 | $ 31,462 | $ 47,990 |
Milestone payment to be earned | 5,000 | ||
Restricted cash held in interest bearing escrow account | 1,000 | ||
Grifols [Member] | |||
Summary Of Organization And Operations [Line Items] | |||
Milestone payment to be earned | $ 5,000 |
Organization and Summary of S33
Organization and Summary of Significant Accounting Policies - Summary of Standard Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2016 | |
Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 3 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 7 years |
Lab Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 5 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 5 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 5 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 17 years |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 9,942 | $ 12,588 |
Less accumulated depreciation and amortization | (9,689) | (12,289) |
Property and equipment, net | 253 | 299 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 4,363 | 4,783 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 578 | 1,144 |
Lab Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,446 | 2,138 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,821 | 2,679 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,734 | $ 1,844 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 121 | $ 203 |
Asset retired | $ 2,700 |
Sublease Agreement and Lease 36
Sublease Agreement and Lease Exit Liability - Additional Information (Detail) | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2007USD ($) | Dec. 31, 2015USD ($) | Jul. 18, 2007ft² | |
Lease Rental Expenses [Line Items] | ||||
Lease agreement initiation date | Jul. 18, 2007 | |||
Sublease agreement, number of square feet | ft² | 72,000 | |||
Impairment expense related to the sublease | $ 2,100,000 | |||
Lease liability | $ 0 | |||
Lease exit current liability | $ 104,000 | |||
Mendel [Member] | ||||
Lease Rental Expenses [Line Items] | ||||
Sublease agreement, number of square feet | ft² | 48,000 |
Sublease Agreement and Lease 37
Sublease Agreement and Lease Exit Liability - Schedule of Lease Exit Liability Activity (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Leases [Abstract] | ||
Balance at beginning of year | $ 104 | $ 297 |
Accretion expense | 2 | 11 |
Lease payments | $ (106) | (204) |
Balance at end of the year | $ 104 |
Other Accrued Liabilities - Add
Other Accrued Liabilities - Additional Information (Detail) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for interest | $ 340,000 | |
Accrued payroll withholding liabilities | 1,335,000 | $ 1,159,000 |
Other Accrued Liabilities [Member] | ||
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for services | 105,000 | 73,000 |
Accrued payroll withholding liabilities | 51,000 | $ 39,000 |
Convertible Debt [Member] | Other Accrued Liabilities [Member] | ||
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for interest | $ 340,000 |
Convertible Notes and Warrant39
Convertible Notes and Warrants - Additional Information (Detail) | Dec. 01, 2017$ / shares | Jul. 14, 2016USD ($)Investorshares | Jun. 09, 2016USD ($) | Apr. 25, 2016USD ($)Investorshares | Apr. 21, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares |
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 23,000,000 | |||||
Debt conversion, initial conversion ratio, numerator | shares | 191.9386 | |||||
Debt conversion, initial conversion ratio, denominator | $ 1,000 | |||||
Debt conversion, initial conversion price per share | $ / shares | $ 5.21 | |||||
Purchasable portion of notes equal to percentage of principal amount of notes | 100.00% | |||||
Proceeds from issuance of convertible debt | $ 3,050,000 | |||||
Proceeds from related party convertible debt | 19,950,000 | |||||
Fair value of the warrants issued | 662,000 | |||||
Amortization of financing cost | 137,000 | |||||
Financing costs, derivative liability and warrant | 997,000 | |||||
Gain recognized on derivative and warrant liabilities | (386,000) | |||||
Reclassifications to equity | 8,373,000 | |||||
Accrued interest payable | $ 340,000 | |||||
Second and Final Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Escrow deposit | $ 215,000 | |||||
Class of warrants or rights, issued | shares | 259,117 | |||||
Effective interest rate on liability component | 16.24% | |||||
Fair value of the warrants issued | $ 662,000 | |||||
Class of Warrant Issued April 22, 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Warrants exercisable, description | The Warrants are exercisable commencing on the later of October 25, 2016 and the date of the public release of top line data related to the conclusion of ORBIT-3 and ORBIT-4 Phase 3 pivotal clinical trials for the Company’s investigational product Pulmaquin® inhaled ciprofloxacin. If, at any time from and after October 25, 2016, the daily volume-weighted average price of the shares of the Company’s common stock for each of ten consecutive trading days exceeds 150% of the Exercise Price, the Company will have the right to call all or a portion of the Warrants for redemption upon twenty business days prior notice to the holders, at a redemption price of $0.01 per Warrant; provided that the holders of the Warrants may elect to exercise their Warrants upon receipt of any redemption notice from the Company. | |||||
Class of Warrant Issued April 22, 2016 [Member] | Initial Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount funded by number of investors | Investor | 2 | |||||
Class of warrants or rights, issued | shares | 4,319 | |||||
Class of Warrant Issued April 22, 2016 [Member] | Second and Final Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amount funded by number of investors | Investor | 2 | |||||
Convertible Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Financing cost | $ 2,400,000 | |||||
Amortization of financing cost | 1,400,000 | |||||
Financing costs, derivative liability and warrant | $ 997,000 | |||||
Senior Convertible Notes Due 2021 [Member] | Convertible Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized debt discount remaining amortization period | 4 years 4 months 2 days | |||||
Senior Convertible Notes Due 2021 [Member] | Convertible Debt [Member] | Initial Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of convertible debt | $ 20,000,000 | |||||
Escrow deposit | $ 1,800,000 | |||||
Number of common shares convertible to derivative liability due to Conversion Share Cap | shares | 3,319,820 | |||||
Effective interest rate on liability component | 22.90% | |||||
Senior Convertible Notes Due 2021 [Member] | Convertible Debt [Member] | Second and Final Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of convertible debt | $ 3,000,000 | |||||
Senior Convertible Notes Due 2021 [Member] | Convertible Debt [Member] | Grifols [Member] | Initial Closing [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from related party convertible debt | $ 19,900,000 | |||||
Derivative Liability [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Gain recognized on derivative and warrant liabilities | $ (386,000) | |||||
Reclassifications to equity | $ 8,400,000 | 8,362,000 | ||||
Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Gain recognized on derivative and warrant liabilities | 386,000 | |||||
Warrants Liability [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Reclassifications to equity | 11,000 | |||||
Warrants Liability [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Gain recognized on derivative and warrant liabilities | $ 500 | |||||
Private Placement [Member] | Class of Warrant Issued April 22, 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of shares into which the class of warrant may be converted | shares | 263,436 | |||||
Private Placement [Member] | Senior Convertible Notes Due 2021 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt conversion, initial conversion ratio, numerator | shares | 191.9386 | |||||
Debt conversion, initial conversion ratio, denominator | $ 1,000 | |||||
Debt conversion, initial conversion price per share | $ / shares | $ 5.21 | |||||
Debt conversion, initial conversion ratio | 0.191939 | |||||
Debt conversion, description | The Convertible Notes are initially convertible into the Company's common stock at a conversion rate of 191.9386 shares of common stock per $1,000 principal amount of Convertible Notes, representing an initial effective conversion price of $5.21 per share of common stock. | |||||
Private Placement [Member] | Senior Convertible Notes Due 2021 [Member] | Convertible Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 23,000,000 | |||||
Maturity date | May 1, 2021 | |||||
Notes bear interest rate | 9.00% | |||||
Frequency of periodic payment of interest | Payable semiannually in arrears on November 1 and May 1 of each year commencing on November 1, 2016. | |||||
Scenario, Forecast [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of trading days for effectiveness preceding issuance of redemption notice | 20 days | |||||
Redeemable portion of notes equal to percentage of principal amount of notes | 100.00% | |||||
Scenario, Forecast [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Redeemable portion of notes equal to or greater than percentage of sale price of common stock | 200.00% | |||||
Scenario, Forecast [Member] | Class of Warrant Issued April 22, 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Warrants term | 5 years | |||||
Warrants, exercise price | $ / shares | $ 5.21 | |||||
Warrants, exercisable commencing date | Oct. 25, 2016 | |||||
Warrants redemption Price | $ / shares | $ 0.01 | |||||
Scenario, Forecast [Member] | Senior Convertible Notes Due 2021 [Member] | Convertible Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of principal amount of outstanding debt held by trustee or holders, in which they may declare debt to be due and payable immediately in event of default | 25.00% |
Convertible Notes and Warrant40
Convertible Notes and Warrants - Schedule of Fair Value Assumption Used to Measure Derivative and Warrant Liability (Detail) - $ / shares | Jul. 14, 2016 | Jun. 09, 2016 | Apr. 21, 2016 |
Initial Closing [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Fair value of underlying stock - per share | $ 4.48 | $ 4.55 | |
Risk-free interest rate | 1.20% | 1.35% | |
Expected life (years) | 4 years 10 months 24 days | 5 years | |
Expected volatility | 73.16% | 73.95% | |
Dividend yield | 0.00% | 0.00% | |
Second and Final Closing [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Fair value of underlying stock - per share | $ 4.58 | ||
Risk-free interest rate | 1.07% | ||
Expected life (years) | 4 years 9 months 11 days | ||
Expected volatility | 72.87% | ||
Dividend yield | 0.00% |
Convertible Notes and Warrant41
Convertible Notes and Warrants - Summary of Activity in Derivative Liability and Warrant Liability (Detail) - USD ($) $ in Thousands | Jun. 09, 2016 | Dec. 31, 2016 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 0 | |
Fair Value of Instruments Issued | 8,759 | |
Change in Fair value | (386) | |
Reclassifications to Equity | (8,373) | |
Ending balance | 0 | |
Derivative Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 0 | |
Fair Value of Instruments Issued | 8,748 | |
Change in Fair value | (386) | |
Reclassifications to Equity | $ (8,400) | (8,362) |
Ending balance | 0 | |
Warrants Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 0 | |
Fair Value of Instruments Issued | 11 | |
Reclassifications to Equity | (11) | |
Ending balance | $ 0 |
Convertible Notes and Warrant42
Convertible Notes and Warrants - Summary of Convertible Notes (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Convertible Debt [Abstract] | |
Principal value | $ 23,000 |
Unamortized debt discount | (8,501) |
Unamortized debt issuance costs | (1,280) |
Carrying value of the convertible notes | $ 13,219 |
Conversion rate (shares of common stock per $1,000 principal amount of notes) | shares | 191.9386 |
Conversion price (per share of common stock) | $ / shares | $ 5.21 |
Convertible Notes and Warrant43
Convertible Notes and Warrants - Summary of Convertible Notes (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Convertible Debt [Abstract] | |
Debt conversion, initial conversion ratio, denominator | $ 1,000 |
Convertible Notes and Warrant44
Convertible Notes and Warrants - Summary of Interest Expense Associated with Convertible Notes (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Noncash Interest Expense | |
Amortization of debt discount | $ 920 |
Amortization of transaction costs | 137 |
Interest expense | 2,406 |
Coupon interest expense | $ 1,349 |
Collaboration Agreement - Grifo
Collaboration Agreement - Grifols License and Collaboration Agreement - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 15, 2013 | May 20, 2013 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Common stock, shares issued and sell | 14,951,089 | 14,761,351 | |||
Sale of common stock | $ 41,400 | $ 439,406 | $ 428,591 | ||
Common stock, shares authorized | 35,045,765 | 25,045,765 | 17,670,765 | ||
Shareholders holding percentage | 50.00% | ||||
Payment received from investors and related party | $ 104 | $ 175 | |||
Before Stock Split [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Common stock, shares issued and sell | 8,349,201 | ||||
Common stock, purchase price per share | $ 4.96 | ||||
License Agreement with Grifols [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Reimbursable research and development expenses by partner | $ 65,000 | ||||
Grifols [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Stock Purchase Agreement | May 20, 2013 | ||||
Payment received from investors and related party | $ 26,000 | ||||
Closing price of common stock | $ 8 | ||||
Common stock discount per share | $ 3.04 | ||||
Common stock discount on share | $ 15,900 | ||||
Grifols [Member] | Before Stock Split [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Common stock, shares issued and sell | 5,244,363 | ||||
Investors [Member] | Before Stock Split [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Common stock, shares issued and sell | 3,104,838 |
Collaboration Agreement - Licen
Collaboration Agreement - License Agreement - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Contract revenue-related party | $ 40 | $ 23,372 | ||||||||
Deferred revenue | $ 5,000 | 5,000 | ||||||||
Milestone payment will be recognized as revenue upon receiving the first regulatory approval | 5,000 | 5,000 | ||||||||
Research and development | 5,865 | $ 5,836 | $ 6,235 | $ 6,451 | $ 8,281 | $ 8,880 | $ 9,754 | $ 8,361 | 24,387 | 35,276 |
General and administrative | 1,339 | $ 1,460 | $ 1,385 | $ 1,644 | 1,093 | $ 1,320 | $ 1,339 | $ 1,542 | 5,828 | 5,294 |
License Agreement with Grifols [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Reimbursable research and development expenses by partner | 65,000 | |||||||||
Payments for development milestones by partner | $ 25,000 | |||||||||
Patent coverage or orphan drug designation period | 10 years | |||||||||
Percentage of reduction on royalty payment | 50.00% | |||||||||
Fully utilized reimbursable research and development expenses | 65,000 | 65,000 | ||||||||
Reimbursable costs incurred under the Grifols License Agreement | $ 0 | $ 0 | $ 0 | 23,400 | ||||||
Research and development | 0 | 22,200 | ||||||||
General and administrative | $ 0 | 1,200 | ||||||||
Decrease in research and development expenses | 22,200 | |||||||||
Decrease in general and administrative expenses | $ 1,200 | |||||||||
License Agreement with Grifols [Member] | Minimum [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty payments on net sales rate | 12.50% | |||||||||
License Agreement with Grifols [Member] | Maximum [Member] | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||
Royalty payments on net sales rate | 20.00% |
Collaboration Agreement - Gover
Collaboration Agreement - Governance Agreement - Additional Information (Detail) - Grifols Governance Agreement [Member] - Person | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Number of independent directors | 3 | |
Number of directors designated by partner | 2 | |
Number of chief executive officer | 1 | |
Period to be consider after the first commercial sale for restriction to acquire and sale of stock | 12 months | |
Minimum target percentage of beneficial ownership to be maintain under governance agreement | 43.30% | 35.00% |
Leases, Commitments and Conti48
Leases, Commitments and Contingencies - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2016USD ($)LegalMatter | Dec. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease expiration year | 2,017 | |
Deferred rent | $ 0 | $ 37,000 |
Building rent expense | 587,000 | 591,000 |
Payments related to indemnifications | 0 | 0 |
Liabilities related to indemnifications obligation | $ 0 | $ 0 |
Claims or pending litigation | LegalMatter | 0 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Stock [Line Items] | |||
Number of right for each share of common stock outstanding | 1 | ||
Rights expiration date | Sep. 8, 2018 | ||
Incentive and non-statutory stock option grants option price | 110.00% | ||
intrinsic value of stock options exercised | $ 0 | $ 2,100 | |
Compensation expense | 1,676,000 | 1,029,000 | |
Limitation of Employee contributions, through payroll deductions to lessor | 18,000 | ||
Capitalized stock-based employee compensation expense | 0 | ||
Tax benefit associated with stock-based compensation expense | $ 0 | ||
Expected term of options granted | 2 years | ||
Expected dividend yield | 0.00% | ||
Employee stock purchase rights value | $ 104,000 | 154,000 | |
Unvested Restricted Stock [Member] | |||
Class of Stock [Line Items] | |||
Total fair value of restricted stock awards vested | $ 53,000 | 0 | |
Stock Options [Member] | |||
Class of Stock [Line Items] | |||
Incentive and non-statutory stock option grants option price | 85.00% | ||
Shares acquired vest period | 4 years | ||
Compensation expense | $ 73,000 | 104,000 | |
Number of days employees have to continuously employed to participate in the Employee Stock Purchase Plan | 10 days | ||
Customary employment weekly period required to participate in the ESPP | 20 hours | ||
Minimum period employee required to work per calendar year to participate in ESPP | 5 months | ||
Condition given to employees to participate in ESPP | 5.00% | ||
Percentage of limitation of Employee contributions, through payroll deductions to lessor | 15.00% | ||
Number of shares of common stock authorized | 286,250 | ||
Number of Shares issued under the ESPP | 195,695 | ||
Number of shares of common stock authorized remaining | 90,555 | ||
Unrecognized compensation expense | $ 25,000 | ||
Employee stock purchase rights value | $ 0 | ||
Expected term offering period | 2 years | ||
Restricted Stock Units [Member] | |||
Class of Stock [Line Items] | |||
Total fair value of restricted stock awards vested | $ 0 | 0 | |
Unvested Stock Options and Stock Purchases [Member] | |||
Class of Stock [Line Items] | |||
Options granted expiration | 1 year | ||
Unrecognized compensation cost related to stock options and stock purchases | $ 2,051,000 | ||
Performance-Based Options [Member] | |||
Class of Stock [Line Items] | |||
Compensation expense | $ 0 | ||
Expected dividend yield | 0.00% | ||
Non Vested Restricted Stock [Member] | |||
Class of Stock [Line Items] | |||
Options granted expiration | 1 year 10 months 24 days | ||
Unrecognized compensation expense | $ 397,000 | ||
Executive Officer [Member] | Performance-Based Options [Member] | |||
Class of Stock [Line Items] | |||
Performance-based stock options, granted | 595,000 | ||
Performance-based stock options, weighted average exercise price | $ 4.09 | ||
2005 and 2015 Plan [Member] | |||
Class of Stock [Line Items] | |||
Options granted expiration | 10 years | ||
Incentive and non-statutory stock option grants option price | 100.00% | ||
Non-statutory stock option grants option price | 85.00% | ||
Combined voting power | 10.00% | ||
Shares acquired vest period | 5 years | ||
Outstanding notes receivables | $ 0 | $ 0 | |
Number of shares repurchased | 0 | ||
2005 and 2015 Plan [Member] | Restricted Stock Units [Member] | |||
Class of Stock [Line Items] | |||
Unrecognized compensation cost related to stock options and stock purchases | $ 0 | ||
2005 [Member] | |||
Class of Stock [Line Items] | |||
Plan expiration date | 2015-03 | ||
Increasing in shares of common stock authorized for issuance | 2,400,000 | ||
Maximum [Member] | Stock Options [Member] | |||
Class of Stock [Line Items] | |||
Limitation of Employee contributions, through payroll deductions to lessor | $ 25,000 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Activity Under Stock Option Plan - Shares Available for Future Grant (Detail) | 12 Months Ended |
Dec. 31, 2016shares | |
Stock Options [Member] | |
Shares Available for Future Grant | |
Balance at January 1, 2016 | 252,725 |
Increase in authorized shares | 2,400,000 |
Options granted | (1,005,323) |
Options cancelled | 28,870 |
Balance at December 31, 2016 | 1,510,272 |
Restricted Stock Awards [Member] | |
Shares Available for Future Grant | |
Restricted stock awards granted | (166,000) |
Shareholders' Equity - Schedu51
Shareholders' Equity - Schedule of Activity Under Stock Option Plan - Options Outstanding (Detail) | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Weighted Average Remaining Contractual Term | |
Outstanding at December 31, 2016 | 2 years |
Stock Options [Member] | |
Number of Shares | |
Outstanding at January 1, 2016 | shares | 947,142 |
Options granted | shares | 1,005,323 |
Options cancelled | shares | (28,870) |
Outstanding at December 31, 2016 | shares | 1,923,595 |
Ending vested and expected to vest | shares | 1,895,273 |
Ending exercisable | shares | 588,585 |
Weighted Average Exercise Price | |
Outstanding at January 1, 2016 | $ / shares | $ 11.40 |
Options granted | $ / shares | 4.45 |
Options cancelled | $ / shares | 72.10 |
Outstanding at December 31, 2016 | $ / shares | 6.86 |
Ending vested and expected to vest | $ / shares | 6.87 |
Ending exercisable | $ / shares | $ 9.63 |
Weighted Average Remaining Contractual Term | |
Outstanding at December 31, 2016 | 8 years 3 months 22 days |
Ending vested and expected to vest | 8 years 3 months 18 days |
Ending exercisable | 7 years 4 days |
Aggregate Intrinsic Value | |
Outstanding at December 31, 2016 | $ | $ 0 |
Ending vested and expected to vest | $ | 0 |
Ending exercisable | $ | $ 0 |
Shareholders' Equity - Schedu52
Shareholders' Equity - Schedule of Unvested Restricted Stock and Performance Bonus Stock Awards (Detail) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Restricted Stock Awards [Member] | |
Number of Shares | |
Outstanding at January 1, 2016 | shares | 300 |
Number of Shares, granted | shares | 166,000 |
Number of Shares, vested | shares | (14,062) |
Outstanding at December 31, 2016 | shares | 152,238 |
Weighted Average Grant Date Fair Value | |
Outstanding at January 1, 2016 | $ / shares | $ 57.60 |
Weighted Average Grant Date Fair Value, granted | $ / shares | 3.87 |
Weighted Average Grant Date Fair Value, vested | $ / shares | 4.04 |
Outstanding at December 31, 2016 | $ / shares | $ 3.96 |
Restricted Stock Units [Member] | |
Number of Shares | |
Outstanding at January 1, 2016 | shares | 10,306 |
Outstanding at December 31, 2016 | shares | 10,306 |
Weighted Average Grant Date Fair Value | |
Outstanding at January 1, 2016 | $ / shares | $ 5.34 |
Outstanding at December 31, 2016 | $ / shares | $ 5.34 |
Shareholders' Equity - Schedu53
Shareholders' Equity - Schedule of Stock-Based Compensation Expense (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Costs and Expenses | ||
Total stock-based compensation expense | $ 1,676 | $ 1,029 |
Impact on basic and diluted net loss per common share | $ (0.11) | $ (0.07) |
Research and Development [Member] | ||
Costs and Expenses | ||
Total stock-based compensation expense | $ 826 | $ 522 |
General and Administrative [Member] | ||
Costs and Expenses | ||
Total stock-based compensation expense | $ 850 | $ 507 |
Shareholder's Equity - Schedule
Shareholder's Equity - Schedule of Stock Based Compensation Valuation Assumption (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation assumption | ||
Dividend yield | 0.00% | |
Performance-Based Options [Member] | ||
Valuation assumption | ||
Dividend yield | 0.00% | |
Volatility factor | 77.10% | |
Risk-free interest rate | 1.50% | |
Expected life (years) | 5 years 8 months 12 days | |
Weighted-average fair value of options granted during the period | $ 2.68 | |
Employee Options [Member] | Members of Board of Directors [Member] | Service Based Option [Member] | ||
Valuation assumption | ||
Dividend yield | 0.00% | 0.00% |
Volatility factor | 74.00% | 83.90% |
Risk-free interest rate | 1.40% | 1.70% |
Expected life (years) | 5 years 6 months | 5 years 8 months 12 days |
Weighted-average fair value of options granted during the period | $ 3.13 | $ 4.95 |
Stock Option [Member] | Employee Options [Member] | ||
Valuation assumption | ||
Dividend yield | 0.00% | |
Volatility factor | 65.60% | |
Risk-free interest rate | 0.06% | |
Expected life (years) | 2 years | |
Weighted-average fair value of options granted during the period | $ 3.38 |
Net Loss Per Common Share - Sch
Net Loss Per Common Share - Schedule of Securities Excluded from Calculation of Diluted Net Loss per Common Share (Detail) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Convertible Shares Underlying Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 4,269 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 1,924 | 947 |
Unvested Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 152 | |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 10 | 10 |
Common Shares Underlying Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 263 | 71 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Employee's contribution on pretax basis | $ 18,000 | |
Additional contribution of employees above 50 years | 6,000 | |
Employer matching contribution expense | $ 88,000 | $ 47,000 |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of employees' matching contributions | 3.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||||||||
Income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Increase (decrease) in valuation allowance on deferred tax assets | 16,160,000 | 8,223,000 | ||||||||
California research and development tax credit carryforwards | 6,509,000 | $ 6,509,000 | 6,509,000 | $ 6,509,000 | ||||||
Unrecognized tax benefits | 0 | 0 | ||||||||
Interest and penalties accrued on unrecognized tax benefits | 0 | 0 | ||||||||
General Business Tax Credit Carryforward [Member] | ||||||||||
Income Tax [Line Items] | ||||||||||
Tax credit carryforward, amount | 18,600,000 | 18,600,000 | ||||||||
Domestic Tax Authority [Member] | ||||||||||
Income Tax [Line Items] | ||||||||||
Federal net operating loss carryforwards | 63,800,000 | $ 63,800,000 | ||||||||
Net operating loss carryforwards expiration period | 2028 through 2036 | |||||||||
California [Member] | ||||||||||
Income Tax [Line Items] | ||||||||||
Net operating loss carryforwards expiration period | 2017 through 2036 | |||||||||
Net operating loss carryforwards | 44,100,000 | $ 44,100,000 | ||||||||
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||||||||||
Income Tax [Line Items] | ||||||||||
California research and development tax credit carryforwards | $ 9,900,000 | $ 9,900,000 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 25,536 | $ 18,406 |
Research and development credits | 6,509 | 6,509 |
Federal orphan drug credits | 18,599 | 11,011 |
Other | 3,572 | 2,130 |
Total deferred tax assets | 54,216 | 38,056 |
Valuation allowance | (54,216) | (38,056) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between Income Tax Benefit and Computation Amount of Federal Statutory Income Tax Rate (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||||||||
Income tax benefit at federal statutory rate | $ (11,531) | $ (6,016) | ||||||||
State taxes (net of federal) | (391) | (17) | ||||||||
Credits | (4,932) | (2,466) | ||||||||
Other | 694 | 276 | ||||||||
Change in valuation allowance | 16,160 | 8,223 | ||||||||
Total | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Quarterly Results of Operatio60
Quarterly Results of Operations - Summary of Quarterly Results of Operations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||||||||
Total revenue | $ 125 | $ 50 | $ 14 | $ 6 | $ 35 | $ 4,674 | $ 9,952 | $ 8,768 | $ 195 | $ 23,429 |
Operating expenses: | ||||||||||
Research and development | 5,865 | 5,836 | 6,235 | 6,451 | 8,281 | 8,880 | 9,754 | 8,361 | 24,387 | 35,276 |
General and administrative | 1,339 | 1,460 | 1,385 | 1,644 | 1,093 | 1,320 | 1,339 | 1,542 | 5,828 | 5,294 |
Restructuring and asset impairment | 1 | 1 | 2 | 2 | 3 | 4 | 2 | 11 | ||
Total expenses | 7,204 | 7,296 | 7,621 | 8,096 | 9,376 | 10,202 | 11,096 | 9,907 | 30,217 | 40,581 |
Loss from operations | (7,079) | (7,246) | (7,607) | (8,090) | (9,341) | (5,528) | (1,144) | (1,139) | (30,022) | (17,152) |
Interest income (expense), net | (913) | (864) | (551) | 4 | 7 | 7 | 7 | 8 | ||
Other income (expense) | 55 | (76) | (571) | (18) | (28) | (8) | (32) | (598) | (86) | |
Loss before income taxes | (7,937) | (8,186) | (8,729) | (8,086) | (9,352) | (5,549) | (1,145) | (1,163) | ||
Income tax provision | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Net loss and comprehensive loss | $ (7,937) | $ (8,186) | $ (8,729) | $ (8,086) | $ (9,352) | $ (5,549) | $ (1,145) | $ (1,163) | $ (32,938) | $ (17,209) |
Basic and diluted net loss per common share | $ (0.54) | $ (0.55) | $ (0.59) | $ (0.55) | $ (2.23) | $ (1.17) | ||||
Basic and diluted net loss per common share | $ (0.63) | $ (0.38) | $ (0.08) | $ (0.08) | ||||||
Shares used in computing basic and diluted net loss per common share | 14,795 | 14,782 | 14,778 | 14,761 | 14,779 | 14,747 | ||||
Shares used in computing basic and diluted net loss per common share | 14,761 | 14,751 | 14,749 | 14,727 |
Going Concern - Additional Info
Going Concern - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Feb. 28, 2017 | Dec. 31, 2014 | |
Going Concern [Line Items] | ||||
Accumulated deficit | $ (438,419) | $ (405,481) | ||
Net loss | (32,938) | (17,209) | ||
Current assets | 24,801 | 35,246 | ||
Current liabilities | 5,848 | 7,516 | ||
Increase in current assets | 19,000 | |||
Cash and cash equivalents | $ 22,591 | $ 31,462 | $ 47,990 | |
Existence of substantial doubt about going concern, within one year | false | |||
Milestone payment to be earned | $ 5,000 | |||
Grifols [Member] | ||||
Going Concern [Line Items] | ||||
Milestone payment to be earned | $ 5,000 | |||
Subsequent Event [Member] | ||||
Going Concern [Line Items] | ||||
Cash and cash equivalents | $ 19,500 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | 12 Months Ended |
Jun. 30, 2016USD ($) | |
Subsequent Events [Abstract] | |
Cash rebate under Australian R&D tax incentive program | $ 675,000 |