Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ARDM | |
Entity Registrant Name | ARADIGM CORP | |
Entity Central Index Key | 1,013,238 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 15,211,472 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,395 | $ 7,095 |
Receivables | 183 | 200 |
Prepaid and other current assets | 709 | 389 |
Total current assets | 2,287 | 7,684 |
Property and equipment, net | 256 | 289 |
Other assets | 92 | 92 |
Total assets | 2,635 | 8,065 |
Current liabilities: | ||
Accounts payable | 834 | 903 |
Accrued clinical and cost of other studies | 523 | 274 |
Accrued compensation | 613 | 1,643 |
Deferred revenue - related party, current | 633 | 1,900 |
Deferred revenue - other | 154 | 183 |
Other accrued liabilities | 1,015 | 563 |
Total current liabilities | 3,772 | 5,466 |
Deferred rent | 43 | 32 |
Deferred revenue - related party, non-current | 42 | 90 |
Convertible debt - non-current, net of discount | 2,427 | 2,382 |
Convertible debt - related party, non-current, net of discount | 13,064 | 12,626 |
Total liabilities | 19,348 | 20,596 |
Commitments and contingencies | ||
Shareholders' deficit: | ||
Preferred stock, 5,000,000 shares authorized, none outstanding | ||
Common stock, no par value; authorized shares: 35,045,765 at March 31, 2018 and December 31, 2017; issued and outstanding shares: 15,211,472 at March 31, 2018; 15,170,200 at December 31, 2017 | 443,259 | 442,639 |
Accumulated deficit | (459,972) | (455,170) |
Total shareholders' deficit | (16,713) | (12,531) |
Total liabilities and shareholders' deficit | $ 2,635 | $ 8,065 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 | 35,045,765 |
Common stock, shares issued | 15,211,472 | 15,170,200 |
Common stock, shares outstanding | 15,211,472 | 15,170,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Contract revenue, related party | $ 1,315 | $ 1,623 |
Contract revenue | 29 | 39 |
Grant revenue | 129 | 31 |
Total revenue | 1,473 | 1,693 |
Operating expenses: | ||
Research and development | 3,568 | 2,774 |
General and administrative | 1,714 | 1,678 |
Total operating expenses | 5,282 | 4,452 |
Loss from operations | (3,809) | (2,759) |
Interest income | 15 | 28 |
Interest expense | (1,004) | (953) |
Other income (expense), net | (4) | 6 |
Income (net loss and comprehensive loss) | $ (4,802) | $ (3,678) |
Basic and diluted net income (loss) per common share | $ (0.32) | $ (0.25) |
Shares used in computing basic and diluted net loss per common share | 15,049 | 14,800 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (4,802) | $ (3,678) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 34 | 28 |
Stock-based compensation expense | 547 | 543 |
Amortization of convertible debt discount | 483 | 424 |
Changes in operating assets and liabilities: | ||
Receivables | 17 | (152) |
Prepaid and other current assets | (320) | (104) |
Other assets | 0 | 0 |
Accounts payable | (69) | (179) |
Accrued compensation | (1,030) | (79) |
Current deferred revenue - related party | (1,344) | |
Other accrued liabilities | 701 | (656) |
Deferred rent | 11 | |
Deferred revenue - related party | (1,524) | |
Net cash used in operating activities | (5,772) | (5,377) |
Cash flows from investing activities: | ||
Capital expenditures | (1) | |
Net cash used in investing activities | (1) | |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 73 | |
Net cash provided by financing activities | 73 | |
Net decrease in cash and cash equivalents | (5,700) | (5,377) |
Cash and cash equivalents at beginning of period | 7,095 | 22,591 |
Cash and cash equivalents at end of period | $ 1,395 | 17,214 |
Supplemental disclosure of non-cash activities: | ||
Cumulative effect of adoption of new accounting standards | 6,046 | |
Stock issued in payment of officer bonus | $ 444 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Liquidity | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Liquidity | 1. Organization, Basis of Presentation and Liquidity Organization Aradigm Corporation (the “Company,” “we,” “our,” or “us”) is a California corporation, incorporated in 1991, focused on the development and commercialization of drugs delivered by inhalation for the treatment and prevention 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 during the upcoming year. The Company operates as a single operating segment. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q S-X. 10-K 10-K”). The consolidated balance sheet at December 31, 2017 included above has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K. The accompanying unaudited condensed 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 As reflected in the accompanying condensed consolidated financial statements, the Company has incurred significant recurring operating losses and negative cash flows from operations and as of March 31, 2018, had an accumulated deficit of $460 million, a shareholder’s deficit of $16.7 million and a working capital deficit of $1.5 million. These factors among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management expects operating losses to continue for the foreseeable future. Subsequent to the end of the fiscal quarter, on April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders beneficially owning collectively approximately 67% of the Company’s common stock as of March 12, 2018 and owning most of the Convertible Notes and Warrants described in Note 6 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements, in conformity with GAAP, 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, accruals for operating expenses, assumptions for valuing options and warrants, and income taxes. Actual results could differ from these estimates. Net Loss Per Common Share Basic net 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 restricted shares of common stock subject to repurchase. Potentially dilutive securities were not included in the net loss per common share calculation for the three months ended March 31, 2018 and 2017 because the inclusion of such shares would have had an anti-dilutive effect. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) For additional information about our significant accounting policies, see Note 1 to the consolidated financial statements included in the 2017 Annual Report on Form 10-K |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents At March 31, 2018, and December 31, 2017, 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 | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The Company follows ASC 820, Fair Value Measurement The Company’s cash and cash equivalents at March 31, 2018, and December 31, 2017, consist of cash and money market funds. Money market funds are valued using quoted market prices. |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | 5. Other Accrued Liabilities At March 31, 2018, other accrued liabilities consisted of accrued expenses for interest of $863,000, expenses for services of $146,000 and payroll withholding liabilities of $6,000. The liability for accrued interest of $863,000 is related to the Convertible Notes as outlined in Note 6 and represents the interest on the Convertible Notes that is accrued but unpaid as of March 31, 2018. At December 31, 2017, other accrued liabilities consisted of accrued expenses for interest of $345,000, expenses for services of $132,000 and payroll withholding liabilities of $86,000. |
Convertible Notes and Warrants
Convertible Notes and Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Text Block [Abstract] | |
Convertible Notes and Warrants | 6. 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 due 2021 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. 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 the aggregate principal amount of the then outstanding Convertible Notes may declare all 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. 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. The fair value of the warrants issued in the first closing was $11,000 and was recorded as a component of equity and discount to the debt host. 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 effective interest rate of the liability component was equal to 22.9% for the three months ended March 31, 2018. 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 effective interest rate of the liability component was equal to 16.24% for the three months ended March 31, 2018. 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 As of March 31, 2018, the Convertible Notes consisted of the following: March 31, 2018 (in thousands, except conversion rate and conversion price) Principal value $ 23,000 Unamortized debt discount (6,529 ) Unamortized debt issuance costs (980 ) Carrying value of the convertible notes $ 15,491 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 three months ended March 31, 2018 and 2017, the Company recognized interest expense associated with its Convertible Notes as follows: Three Months ended March 31, 2018 Three Months ended March 31, 2017 (in thousands) (in thousands) Cash Interest Expense Coupon interest expense $ 518 $ 529 Other Interest expense 3 — Noncash Interest Expense Amortization of debt discount 420 368 Amortization of transaction costs 63 56 $ 1,004 $ 953 As of March 31, 2018, the unamortized debt discount will be amortized over a remaining period of approximately 3.09 years. The if-converted 10-K. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 7. Revenue Recognition For additional detail on the Company’s accounting policy regarding revenue recognition, see “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates.” The following table presents changes in the Company’s contract assets and liabilities for the three months ended March 31, 2018. Balance at Beginning of Period Additions Deductions Balance at End of Period (in thousands) Contract Assets $ 67 $ 129 $ (76 ) $ 120 Contract Liabilities: Deferred Revenue $ 2,173 $ — $ (1,344 ) $ 829 During the three months ended March 31, 2018 and 2017, the Company recognized the following revenues (in thousands). Three Months ended March 31, 2018 Three Months ended March 31, 2017 (in thousands) (in thousands) Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied $ 1,315 $ 1,662 New activities in the period: Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – contract revenue 7 — Performance obligations satisfied from new activities in the current period – contract revenue 22 — Performance obligations satisfied from new activities in the current period – grant revenue 129 31 Total revenue $ 1,473 $ 1,693 |
Collaboration Agreement
Collaboration Agreement | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration Agreement | 8. Collaboration Agreement Grifols License and Collaboration Agreement See Note 9 to the audited consolidated financial statements included in Part II, Item 8 of the 2017 Annual Report on Form 10-K The Company’s performance obligations under the Grifols Collaboration include those related to the worldwide license to commercialize products developed from the collaboration which was satisfied in 2013, development services for Phase 3 clinical trials that were completed as of December 31, 2016, regulatory submission services for the first indication that were complete as of September 30, 2017, regulatory approval services in the US for the first indication that were complete as of March 31, 2018, and regulatory approval services in the EU for the first indication which are in progress and forecast to be complete by Q1 2019. In addition, the Company identified that Grifols has an option that will create manufacturing obligations for the Company upon exercise by the customer. Further, these customer options for manufacturing services were evaluated and did not include a material right. The Company recognizes revenue from license rights when the customer can use and benefit from the license rights. The Company recognizes revenue from its services performance obligations over time using a cost-to-cost input Under the License Agreement, the Company is eligible to receive up to $25.0 million in payments upon the achievement of regulatory filing and approval milestones. As of March 31, 2018, the Company has achieved two of the six milestones and has received $10.0 million in payments. Milestone payments related to regulatory submission and approval services are considered variable consideration and excluded from the transaction price for the period ended March 31, 2018 due to the constraint on variable consideration. The Company has deferred $675 thousand of the transaction price in the Grifols’ arrangement that is allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2018. These amounts are expected to be recognized over time as services are performed through Q2 2019. |
Stock-Based Compensation and St
Stock-Based Compensation and Stock Options and Awards | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Stock Options and Awards | 9. Stock-Based Compensation and Stock Options and Awards The following table shows the stock-based compensation expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Costs and expenses: Research and development $ 322 $ 306 General and administrative 225 237 Total stock-based compensation expense $ 547 $ 543 There was no capitalized stock-based employee compensation cost for the three months ended March 31, 2018 and 2017. Since the Company did not record a tax provision during the quarters ended March 31, 2018 and 2017, there was no recognized tax benefit associated with stock-based compensation expense. During the three months ended March 31, 2018, the Company granted 730,000 performance-based options to the employees of the Company. These options were granted at-the-money, In March 2016 and June and December of 2017, the Company granted to the Officers certain stock option bonus awards, that vested based upon meeting certain specified company-wide performance goals. These options and stock awards were granted at-the-money, Stock Option Plans: 2005 Equity Incentive Plan (the “2005 Plan”), and 2015 Equity Incentive Plan (the “2015 Plan”) On March 13, 2015, the Board adopted and, on May 14, 2015, the Company’s shareholders approved, the 2015 Plan. The 2015 Plan replaces the Company’s 2005 Plan, which expired in March 2015. The 2015 Plan is intended to promote the Company’s long-term success and increase shareholder value by attracting, motivating, and retaining non-employee Stock Option Activity The following is a summary of activity under the 2005 Plan and the 2015 Plan for the three months ended March 31, 2018: Shares Available for Balance at January 1, 2018 1,645,124 Increase in authorized shares — Options granted (980,500 ) Options canceled 1,266,965 Restricted stock awards canceled 399,750 Balance at March 31, 2018 2,331,339 Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2018 3,727,581 $ 4.72 Options granted 980,500 $ 1.12 Options canceled (1,266,965 ) $ 4.99 Outstanding at March 31, 2018 3,441,116 $ 3.60 7.82 $ 116,880 Exercisable at March 31, 2018 1,974,241 $ 4.32 6.44 $ 26,000 No stock options were exercised during the three months ended March 31, 2018. The total amount of unrecognized compensation cost related to non-vested A summary of the activity of the Company’s unvested restricted stock and performance-based restricted stock award activities for the three months ended March 31, 2018 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, 2018 613,538 $ 1.95 Restricted stock awards canceled (399,750 ) $ 1.46 Restricted share awards vested (115,213 ) $ 3.32 Outstanding at March 31, 2018 98,575 $ 2.30 For restricted stock awards the Company recognizes compensation expense over the vesting period for the fair value of the stock award on the measurement date. As of March 31, 2018, there was approximately $129,000 of total unrecognized compensation costs, net of forfeitures, related to non-vested |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 10. 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 restricted shares are anti-dilutive and are not included in the diluted weighted average number of shares of common stock outstanding for the three months ending March 31, 2018 and 2017. The Company excluded the following securities from the calculation of diluted net loss per common share for the three months ended March 31 2018 and 2017, as their effect would be anti-dilutive (in thousands): Three months ended March 31, 2018 2017 Common shares underlying convertible notes 4,415 4,415 Outstanding stock options 3,441 2,536 Common shares underlying warrants 263 263 Unvested restricted stock 99 148 Unvested restricted stock units 10 10 |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 11. Going Concern As reflected in the accompanying condensed consolidated financial statements, the Company has incurred significant recurring operating losses and negative cash flows from its operations and, as of March 31, 2018, had an accumulated deficit of $460 million, a net shareholder’s deficit of $16.7 million and a working capital deficit of $1.5 million. These factors among others, raise substantial doubt about the Company’s ability to continue as a going concern. As of March 31, 2018, the Company’s current assets of $2.3 million are less than current liabilities of $3.8 million by $1.5 million. In February 2018, the Board of Directors (the “Board”) implemented temporary measures intended to preserve the Company’s cash resources until additional sources of capital can be secured, including the reduction of cash compensation and severance benefits for officers and the reduction of cash compensation for members of the Board. Subsequent to the end of the fiscal quarter, April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders beneficially owning collectively approximately 67% of the Company’s common stock as of March 12, 2018 and owning most of the Convertible Notes and Warrants described in Note 6 to the consolidated financial statements included in this Quarterly Report on Form 10-Q 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 condensed 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Lease On April 1, 2017, the Company entered into an amendment of the current lease for a building containing offices, laboratory, and manufacturing facilities, through March 31, 2023. The lease calls for annual minimum rental payments that increase at the rate of 3.5% per annum throughout the lease term. In accordance with GAAP, the Company recognizes rent expense on a straight-line basis. The Company recorded deferred rent for the difference between the amounts paid and recorded as an expense. At March 31, 2018 and December 31, 2017, the Company had $43,000 and $32,000 in deferred rent. The landlord has a one-time one-time one-time If the lease is not terminated early in accordance with its terms the Company’s future minimum rental payments required under the operating lease as of March 31, 2018, are as follows: For the year ended March 31, (in thousands) 2019 $ 499 2020 516 2021 535 2022 553 2023 140 Total $ 2,243 For the three months ended March 31, 2018, base rental expense was approximately $128,000. Legal Matters On May 1, 2017, the Company filed a post grant review, or a PGR, petition in the United States Patent and Trademark Office Patent Trial and Appeal Board, or PTAB, challenging the validity of all 26 claims of U.S. Patent No.9,402,845 or the ‘845 Patent, assigned to Insmed Incorporated, or Insmed. The ‘845 Patent issued on August 2, 2016, and is entitled “Lipid-based compositions of antiinfectives for treating pulmonary infections and methods of use thereof.” PGR is a proceeding that became available in September 2012 in accordance with the America Invents Act. In a PGR, a petitioner may request that PTAB reconsider the validity of issued patent claims. Any patent claim PTAB determines to be unpatentable is stricken from the challenged patent. In August 2017, Insmed filed a Preliminary Response. In November 2017, PTAB denied institution of our post-grant review of the ‘845 Patent. We are currently assessing the PTO’s decision. On January 11, 2018 a putative class action lawsuit, Kevin Kheder v. Aradigm Corporation, et al., 3:18-cv-00261, |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders beneficially owning collectively approximately 67% of the Company’s common stock as of March 12, 2018 and owning most of the Convertible Notes and Warrants described in Note 6 to the consolidated financial statements included in this Quarterly Report on Form 10-Q The Company intends to use the proceeds to, among other things, fund the European Medicines Agency regulatory application process for approval of Linhaliq, to determine a path forward for regulatory review of Linhaliq by the Food and Drug Administration and for general corporate purposes. On April 18, 2018, following receipt of the requisite consent of holders of the Company’s Convertible Notes, the Company entered into a Supplemental Indenture (the “Supplemental Indenture”), dated as of April 18, 2018, between the Company and U.S. Bank National Association, as trustee, amending the terms of the Indenture, dated as of April 25, 2016 (the “Original Indenture”) governing the Convertible Notes to give effect to specified amendments. Such amendments include (i) the addition of provisions permitting the Company to make future payments of interest, including the interest payment due on May 1, 2018, on the Convertible Notes by increasing the outstanding principal amount of the Notes in the amount of the accrued interest being so paid and (ii) the removal of the Convertible Note holders’ option to require the Company to repurchase the Convertible Notes upon the occurrence of certain events, any of which constituted a “Fundamental Change” as defined in the Original Indenture. |
Organization, Basis of Presen19
Organization, Basis of Presentation and Liquidity (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Aradigm Corporation (the “Company,” “we,” “our,” or “us”) is a California corporation, incorporated in 1991, focused on the development and commercialization of drugs delivered by inhalation for the treatment and prevention 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 during the upcoming year. The Company operates as a single operating segment. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q S-X. 10-K 10-K”). The consolidated balance sheet at December 31, 2017 included above has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and notes thereto included in the 2017 Annual Report on Form 10-K. The accompanying unaudited condensed 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 As reflected in the accompanying condensed consolidated financial statements, the Company has incurred significant recurring operating losses and negative cash flows from operations and as of March 31, 2018, had an accumulated deficit of $460 million, a shareholder’s deficit of $16.7 million and a working capital deficit of $1.5 million. These factors among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management expects operating losses to continue for the foreseeable future. Subsequent to the end of the fiscal quarter, on April 13, 2018, the Company entered into a note purchase agreement whereby entities affiliated with Grifols and First Eagle, the Company’s two largest shareholders beneficially owning collectively approximately 67% of the Company’s common stock as of March 12, 2018 and owning most of the Convertible Notes and Warrants described in Note 6 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, |
Use of Estimates | Use of Estimates The preparation of financial statements, in conformity with GAAP, 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, accruals for operating expenses, assumptions for valuing options and warrants, and income taxes. Actual results could differ from these estimates. |
Net Loss Per Common Share | Net Loss Per Common Share Basic net 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 restricted shares of common stock subject to repurchase. Potentially dilutive securities were not included in the net loss per common share calculation for the three months ended March 31, 2018 and 2017 because the inclusion of such shares would have had an anti-dilutive effect. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) For additional information about our significant accounting policies, see Note 1 to the consolidated financial statements included in the 2017 Annual Report on Form 10-K |
Convertible Notes and Warrants
Convertible Notes and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Text Block [Abstract] | |
Summary of Convertible Notes | As of March 31, 2018, the Convertible Notes consisted of the following: March 31, 2018 (in thousands, except conversion rate and conversion price) Principal value $ 23,000 Unamortized debt discount (6,529 ) Unamortized debt issuance costs (980 ) Carrying value of the convertible notes $ 15,491 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 three months ended March 31, 2018 and 2017, the Company recognized interest expense associated with its Convertible Notes as follows: Three Months ended March 31, 2018 Three Months ended March 31, 2017 (in thousands) (in thousands) Cash Interest Expense Coupon interest expense $ 518 $ 529 Other Interest expense 3 — Noncash Interest Expense Amortization of debt discount 420 368 Amortization of transaction costs 63 56 $ 1,004 $ 953 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Contract Assets and Liabilities | The following table presents changes in the Company’s contract assets and liabilities for the three months ended March 31, 2018. Balance at Beginning of Period Additions Deductions Balance at End of Period (in thousands) Contract Assets $ 67 $ 129 $ (76 ) $ 120 Contract Liabilities: Deferred Revenue $ 2,173 $ — $ (1,344 ) $ 829 |
Summary of Revenue Recognized | During the three months ended March 31, 2018 and 2017, the Company recognized the following revenues (in thousands). Three Months ended March 31, 2018 Three Months ended March 31, 2017 (in thousands) (in thousands) Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied $ 1,315 $ 1,662 New activities in the period: Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods – contract revenue 7 — Performance obligations satisfied from new activities in the current period – contract revenue 22 — Performance obligations satisfied from new activities in the current period – grant revenue 129 31 Total revenue $ 1,473 $ 1,693 |
Stock-Based Compensation and 22
Stock-Based Compensation and Stock Options and Awards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table shows the stock-based compensation expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Costs and expenses: Research and development $ 322 $ 306 General and administrative 225 237 Total stock-based compensation expense $ 547 $ 543 |
Schedule of Activity Under Stock Option Plan | The following is a summary of activity under the 2005 Plan and the 2015 Plan for the three months ended March 31, 2018: Shares Available for Balance at January 1, 2018 1,645,124 Increase in authorized shares — Options granted (980,500 ) Options canceled 1,266,965 Restricted stock awards canceled 399,750 Balance at March 31, 2018 2,331,339 Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2018 3,727,581 $ 4.72 Options granted 980,500 $ 1.12 Options canceled (1,266,965 ) $ 4.99 Outstanding at March 31, 2018 3,441,116 $ 3.60 7.82 $ 116,880 Exercisable at March 31, 2018 1,974,241 $ 4.32 6.44 $ 26,000 |
Schedule of Unvested Restricted Stock Award Activities | A summary of the activity of the Company’s unvested restricted stock and performance-based restricted stock award activities for the three months ended March 31, 2018 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, 2018 613,538 $ 1.95 Restricted stock awards canceled (399,750 ) $ 1.46 Restricted share awards vested (115,213 ) $ 3.32 Outstanding at March 31, 2018 98,575 $ 2.30 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 three months ended March 31 2018 and 2017, as their effect would be anti-dilutive (in thousands): Three months ended March 31, 2018 2017 Common shares underlying convertible notes 4,415 4,415 Outstanding stock options 3,441 2,536 Common shares underlying warrants 263 263 Unvested restricted stock 99 148 Unvested restricted stock units 10 10 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Rental Payments Required under the Operating Lease | If the lease is not terminated early in accordance with its terms the Company’s future minimum rental payments required under the operating lease as of March 31, 2018, are as follows: For the year ended March 31, (in thousands) 2019 $ 499 2020 516 2021 535 2022 553 2023 140 Total $ 2,243 |
Organization, Basis of Presen25
Organization, Basis of Presentation and Liquidity - Additional Information (Detail) | Apr. 13, 2018USD ($) | Mar. 31, 2018USD ($)Segment | Mar. 12, 2018 | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Tax Expense Benefit [Line Items] | ||||||
Number of operating segment | Segment | 1 | |||||
Accumulated deficit | $ (459,972,000) | $ (455,170,000) | ||||
Working capital deficit | 1,500,000 | |||||
Shareholders' deficit | (16,713,000) | (12,531,000) | ||||
Cash position | 1,395,000 | $ 7,095,000 | $ 17,214,000 | $ 22,591,000 | ||
Ownership percentage | 67.00% | |||||
Aggregate principal amount | $ 23,000,000 | |||||
Grifols and First Eagle [Member] | ||||||
Income Tax Expense Benefit [Line Items] | ||||||
Ownership percentage | 67.00% | |||||
Promissory Note [Member] | ||||||
Income Tax Expense Benefit [Line Items] | ||||||
Proceed from promissory notes issued | $ 2,000,000 | |||||
Remaining amount of notes | $ 5,000,000 | |||||
Subsequent Event [Member] | ||||||
Income Tax Expense Benefit [Line Items] | ||||||
Ownership percentage | 67.00% | |||||
Subsequent Event [Member] | Grifols and First Eagle [Member] | ||||||
Income Tax Expense Benefit [Line Items] | ||||||
Ownership percentage | 67.00% | |||||
Subsequent Event [Member] | Bridge Notes [Member] | Grifols and First Eagle [Member] | ||||||
Income Tax Expense Benefit [Line Items] | ||||||
Aggregate principal amount | $ 7,000,000 | |||||
Subsequent Event [Member] | Promissory Note [Member] | ||||||
Income Tax Expense Benefit [Line Items] | ||||||
Proceed from promissory notes issued | 2,000,000 | |||||
Remaining amount of notes | $ 5,000,000 |
Other Accrued Liabilities - Add
Other Accrued Liabilities - Additional Information (Detail) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Other Accrued Liabilities [Line Items] | ||
Accrued payroll withholding liabilities | $ 613,000 | $ 1,643,000 |
Other Accrued Liabilities [Member] | ||
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for services | 146,000 | 132,000 |
Accrued payroll withholding liabilities | 6,000 | 86,000 |
Convertible Debt [Member] | Other Accrued Liabilities [Member] | ||
Other Accrued Liabilities [Line Items] | ||
Accrued expenses for interest | $ 863,000 | $ 345,000 |
Convertible Notes and Warrant27
Convertible Notes and Warrants - Additional Information (Detail) | Dec. 01, 2017$ / shares | Jul. 14, 2016USD ($)Investorshares | Apr. 25, 2016USD ($)Investorshares | Apr. 21, 2016USD ($)shares | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 23,000,000 | ||||||
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% | ||||||
Amortization of financing cost | 63,000 | $ 56,000 | |||||
Other miscellaneous interest expense | 3,000 | ||||||
Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Redeemable portion of notes equal to or greater than percentage of sale price of common stock | 200.00% | ||||||
Class of Warrant Issued April 22, 2016 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Warrants term | 5 years | ||||||
Warrants, exercise price | $ / shares | $ 5.21 | ||||||
Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Financing cost | 2,400,000 | ||||||
Amortization of financing cost | $ 1,400,000 | ||||||
Unamortized debt discount remaining amortization period | 3 years 1 month 2 days | ||||||
Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | Minimum [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 Debt [Member] | Other Accrued Liabilities [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Accrued interest payable | $ 863,000 | $ 345,000 | |||||
Convertible Debt [Member] | Other Accrued Liabilities [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Accrued interest payable | $ 863,000 | ||||||
Second and Final Closing [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount funded by number of investors | Investor | 2 | ||||||
Second and Final Closing [Member] | Class of Warrant Issued April 22, 2016 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Class of warrants or rights, issued | shares | 259,117 | ||||||
Fair value of the warrants issued | $ 662,000 | ||||||
Second and Final Closing [Member] | Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of convertible debt | $ 3,000,000 | ||||||
Effective interest rate on liability component | 16.24% | ||||||
Initial Closing [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount funded by number of investors | Investor | 2 | ||||||
Fair value of warrants issued | $ 11,000,000 | ||||||
Initial Closing [Member] | Class of Warrant Issued April 22, 2016 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amount funded by number of investors | Investor | 1 | ||||||
Class of warrants or rights, issued | shares | 4,319 | ||||||
Initial Closing [Member] | Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of convertible debt | $ 20,000,000 | ||||||
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% | ||||||
Initial Closing [Member] | Convertible Debt [Member] | Senior Convertible Notes Due 2021 [Member] | Grifols [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from related party convertible debt | $ 19,900,000 | ||||||
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] | Convertible Debt [Member] | Senior Convertible Notes Due 2021 [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. |
Convertible Notes and Warrant28
Convertible Notes and Warrants - Summary of Convertible Notes (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Convertible Debt [Abstract] | |
Principal value | $ 23,000 |
Unamortized debt discount | (6,529) |
Unamortized debt issuance costs | (980) |
Carrying value of the convertible notes | $ 15,491 |
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 Warrant29
Convertible Notes and Warrants - Summary of Convertible Notes (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Convertible Debt [Abstract] | |
Debt conversion, initial conversion ratio, denominator | $ 1,000 |
Convertible Notes and Warrant30
Convertible Notes and Warrants - Summary of Interest Expense Associated with Convertible Notes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest Expense [Abstract] | ||
Coupon interest expense | $ 518 | $ 529 |
Other interest expense | 3 | |
Noncash Interest Expense | ||
Amortization of debt discount | 420 | 368 |
Amortization of transaction costs | 63 | 56 |
Interest expense | $ 1,004 | $ 953 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Changes in Contract Assets and Liabilities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Contract Assets, beginning balance | $ 67 |
Contract assets, additions | 129 |
Contract assets, deductions | (76) |
Contract Assets, ending balance | 120 |
Contract liabilities: deferred revenue, beginning balance | 2,173 |
Contract liabilities: deferred revenue, additions | 0 |
Contract liabilities: deferred revenue, deductions | (1,344) |
Contract liabilities: deferred revenue, ending balance | $ 829 |
Revenue Recognition - Summary32
Revenue Recognition - Summary of Revenue Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue recognized in the period from: | ||
Performance obligations satisfied | $ 1,315 | $ 1,662 |
New activities in the period: | ||
Total revenue | 1,473 | 1,693 |
Contract Revenue [Member] | ||
New activities in the period: | ||
Changes in the estimated transaction price allocated to performance obligations satisfied in prior periods - contract revenue | 7 | |
Performance obligations satisfied from new activities in the current period | 22 | |
Grant Revenue [Member] | ||
New activities in the period: | ||
Performance obligations satisfied from new activities in the current period | $ 129 | $ 31 |
Collaboration Agreement - Grifo
Collaboration Agreement - Grifols License and Collaboration Agreement - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Milestone payments received | $ 10,000,000 |
Maximum [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Payments receivable upon the achievement of regulatory filing and approval milestones | $ 25,000,000 |
Grifols [Member] | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Percentage of shares held | 35.00% |
Unsatisfied performance obligations | $ 675,000 |
Stock-Based Compensation and 34
Stock-Based Compensation and Stock Options and Awards - Schedule of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Costs and Expenses | ||
Total stock-based compensation expense | $ 547 | $ 543 |
Research and Development [Member] | ||
Costs and Expenses | ||
Total stock-based compensation expense | 322 | 306 |
General and Administrative [Member] | ||
Costs and Expenses | ||
Total stock-based compensation expense | $ 225 | $ 237 |
Stock-Based Compensation and 35
Stock-Based Compensation and Stock Options and Awards - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Capitalized stock-based employee compensation cost | $ 0 | $ 0 |
Tax benefit associated with stock-based compensation expense | 0 | 0 |
Compensation expense | $ 547,000 | $ 543,000 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance-based stock options, granted | 980,500 | |
Performance-based stock options, cancelled | 1,266,965 | |
Stock options exercised during the period | 0 | |
Unrecognized compensation expense related to unvested stock options and stock purchases | $ 2,338,000 | |
Weighted average period over which unrecognized compensation costs expected to be recognized | 1 year 9 months 29 days | |
Unrecognized compensation expense | $ 147,000 | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average period over which unrecognized compensation costs expected to be recognized | 1 year 2 months 19 days | |
Unrecognized compensation expense | $ 129,000 | |
Performance-Based Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance-based stock options, granted | 730,000 | |
Compensation expense | $ 120,000 | |
Performance-based stock options, vested | 162,500 | |
Vesting period | 10 years | |
Performance-based stock options, cancelled | 0 | |
Performance-Based Options [Member] | Officers and Vice President [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 53,000,000 | |
Vesting period | 10 years | |
Performance-based stock options, vested | 20,000 | |
Performance-based stock options, cancelled | 1,400,000 | |
2005 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Plan expiration date | 2015-03 | |
Two Thousand And Fifteen Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increasing in shares of common stock authorized for issuance | 2,500,000 |
Stock-Based Compensation and 36
Stock-Based Compensation and Stock Options and Awards - Schedule of Activity Under Stock Option Plan - Shares Available for Future Grant (Detail) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2018shares | |
Shares Available for Future Grant | |
Balance at January 1, 2018 | 1,645,124 |
Options granted | (980,500) |
Options canceled | (1,266,965) |
Restricted stock awards canceled | 399,750 |
Balance at March 31, 2018 | 2,331,339 |
Stock-Based Compensation and 37
Stock-Based Compensation and Stock Options and Awards - Schedule of Activity Under Stock Option Plan - Options Outstanding (Detail) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at January 1, 2018 | shares | 3,727,581 |
Options granted | shares | 980,500 |
Options canceled | shares | (1,266,965) |
Outstanding at March 31, 2018 | shares | 3,441,116 |
Ending exercisable | shares | 1,974,241 |
Weighted Average Exercise Price | |
Outstanding at January 1, 2018 | $ / shares | $ 4.72 |
Options granted | $ / shares | 1.12 |
Options canceled | $ / shares | 4.99 |
Outstanding at March 31, 2018 | $ / shares | 3.60 |
Ending exercisable | $ / shares | $ 4.32 |
Weighted Average Remaining Contractual Term | |
Outstanding at March 31, 2018 | 7 years 9 months 25 days |
Ending exercisable | 6 years 5 months 9 days |
Aggregate Intrinsic Value | |
Outstanding at March 31, 2018 | $ | $ 116,880 |
Ending exercisable | $ | $ 26,000 |
Stock-Based Compensation and 38
Stock-Based Compensation and Stock Options and Awards - Schedule of Unvested Restricted Stock Award Activities (Detail) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Outstanding at January 1, 2018 | shares | 613,538 |
Restricted stock awards canceled | shares | (399,750) |
Restricted share awards vested | shares | (115,213) |
Outstanding at March 31, 2018 | shares | 98,575 |
Weighted Average Grant Date Fair Value | |
Outstanding at January 1, 2018 | $ / shares | $ 1.95 |
Weighted Average Grant Date Fair Value, canceled | $ / shares | 1.46 |
Weighted Average Grant Date Fair Value, vested | $ / shares | 3.32 |
Outstanding at March 31, 2018 | $ / shares | $ 2.30 |
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 | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Common Shares Underlying Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 4,415 | 4,415 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 3,441 | 2,536 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities outstanding | 99 | 148 |
Unvested 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 | 263 |
Going Concern - Additional Info
Going Concern - Additional Information (Detail) - USD ($) | Apr. 13, 2018 | Mar. 31, 2018 | Mar. 12, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Going Concern [Line Items] | ||||||
Accumulated deficit | $ (459,972,000) | $ (455,170,000) | ||||
Cash position | 1,395,000 | 7,095,000 | $ 17,214,000 | $ 22,591,000 | ||
Shareholders' deficit | (16,713,000) | (12,531,000) | ||||
Working capital deficit | 1,500,000 | |||||
Current assets | 2,287,000 | 7,684,000 | ||||
Current liabilities | 3,772,000 | $ 5,466,000 | ||||
Current assets are less than current liabilities | 1,500,000 | |||||
Ownership percentage | 67.00% | |||||
Aggregate principal amount | $ 23,000,000 | |||||
Grifols and First Eagle [Member] | ||||||
Going Concern [Line Items] | ||||||
Ownership percentage | 67.00% | |||||
Promissory Note [Member] | ||||||
Going Concern [Line Items] | ||||||
Proceed from promissory notes issued | $ 2,000,000 | |||||
Remaining amount of notes | $ 5,000,000 | |||||
Subsequent Event [Member] | ||||||
Going Concern [Line Items] | ||||||
Ownership percentage | 67.00% | |||||
Subsequent Event [Member] | Grifols and First Eagle [Member] | ||||||
Going Concern [Line Items] | ||||||
Ownership percentage | 67.00% | |||||
Subsequent Event [Member] | Bridge Notes [Member] | Grifols and First Eagle [Member] | ||||||
Going Concern [Line Items] | ||||||
Aggregate principal amount | $ 7,000,000 | |||||
Subsequent Event [Member] | Promissory Note [Member] | ||||||
Going Concern [Line Items] | ||||||
Proceed from promissory notes issued | 2,000,000 | |||||
Remaining amount of notes | $ 5,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jan. 11, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | |||
Percentage increase in annual minimum rental payments | 3.50% | ||
Deferred rent | $ 43,000 | $ 32,000 | |
New funding to be raised before lease termination notice date | 20,000,000 | ||
One-time tenant improvement allowance | 364,000 | ||
Base rental expenses | $ 128,000 | ||
Lawsuit filing date | Jan. 11, 2018 | ||
Putative class action lawsuit | On January 11, 2018 a putative class action lawsuit, Kevin Kheder v. Aradigm Corporation, et al., No. 3:18-cv-00261, was filed in the United States District Court for the Northern District of California against the Company and two of its former officers. |
Commitments and Contingencies42
Commitments and Contingencies - Future Minimum Rental Payments Required under the Operating Lease (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Rolling Maturity [Abstract] | |
2,019 | $ 499 |
2,020 | 516 |
2,021 | 535 |
2,022 | 553 |
2,023 | 140 |
Total | $ 2,243 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Apr. 13, 2018USD ($) | Mar. 12, 2018 | Mar. 31, 2018USD ($)Installments |
Subsequent Event [Line Items] | |||
Aggregate principal amount | $ 23,000,000 | ||
Number of shareholders holding major voting interest | 2 | ||
Percentage of voting interests held by the two shareholders | 67.00% | ||
Promissory Note [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from sale of promissory notes expected | $ 5,000,000 | ||
Number of installments for monthly closing | Installments | 5 | ||
Anticipated maturity date | May 13, 2018 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Percentage of voting interests held by the two shareholders | 67.00% | ||
Private Placement [Member] | Senior Unsecured Promissory Notes Due 2021 [Member] | |||
Subsequent Event [Line Items] | |||
Frequency of periodic payment of interest | Semiannually | ||
Repayment terms | Payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2018 in the case of Promissory Notes issued on April 13, 2018 and on November 1, 2018 and in the case of Promissory Notes issued thereafter, unless earlier redeemed or cancelled in accordance with the terms of the Promissory Notes. | ||
Private Placement [Member] | Senior Unsecured Promissory Notes Due 2021 [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Aggregate principal amount | $ 7,000,000 | ||
Maturity date | Dec. 31, 2021 | ||
Senior notes outstanding | $ 2,000,000 | ||
Notes bear interest rate | 9.00% | ||
Redeemable portion of notes equal to percentage of principal amount of notes | 100.00% | ||
Remaining amount of notes | $ 5,000,000 |