Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 20, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ARQULE INC | |
Entity Central Index Key | 1,019,695 | |
Trading Symbol | arql | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 87,125,327 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 10,537 | $ 20,229 |
Marketable securities-short term | 32,347 | 27,807 |
Prepaid expenses and other current assets | 1,913 | 547 |
Total current assets | 44,797 | 48,583 |
Property and equipment, net | 102 | 115 |
Other assets | 204 | 204 |
Total assets | 45,103 | 48,902 |
Current liabilities: | ||
Accounts payable and accrued expenses | 8,269 | 8,259 |
Deferred revenue | 1,500 | |
Total current liabilities | 8,269 | 9,759 |
Long-term liabilities: | ||
Notes payable | 14,517 | 14,607 |
Warrant liability | 3,782 | 1,512 |
Total liabilities | 26,568 | 25,878 |
Commitments and contingencies (Note 13) | ||
Preferred stock, convertible, Series A $0.01 par value; 1,000,000, shares authorized; 8,370 shares issued and outstanding at March 31, 2018 and December 31, 2017, aggregate liquidation preference of $9,500 | 8,843 | 8,843 |
Stockholders' equity: | ||
Common stock, $0.01 par value; 100,000,000 shares authorized; 87,125,327 and 87,110,202 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 871 | 871 |
Additional paid-in capital | 547,932 | 547,364 |
Accumulated other comprehensive loss | (41) | (16) |
Accumulated deficit | (539,070) | (534,038) |
Total stockholders' equity | 9,692 | 14,181 |
Total liabilities, preferred stock and stockholders' equity | $ 45,103 | $ 48,902 |
BALANCE SHEETS (Parentheticals)
BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Series A Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series A Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Series A Preferred stock, shares issued | 8,370 | 8,370 |
Series A Preferred stock, shares outstanding | 8,370 | 8,370 |
Aggregate liquidation preference (in dollars) | $ 9,500 | $ 9,500 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 87,125,327 | 87,110,202 |
Common stock, shares outstanding | 87,125,327 | 87,110,202 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Research and development revenue | $ 4,138 | |
Costs and expenses: | ||
Research and development | 5,812 | $ 5,194 |
General and administrative | 2,351 | 2,074 |
Total costs and expenses | 8,163 | 7,268 |
Loss from operations | (4,025) | (7,268) |
Interest income | 159 | 22 |
Interest expense | (396) | (330) |
Other expense | (2,270) | |
Net loss | (6,532) | (7,576) |
Unrealized loss on marketable securities | (25) | (4) |
Comprehensive loss | $ (6,557) | $ (7,580) |
Basic and diluted net loss per share: | ||
Net loss per share (in dollars per share) | $ (0.07) | $ (0.11) |
Weighted average basic and diluted common shares outstanding (in shares) | 87,112 | 71,138 |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (6,532) | $ (7,576) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 13 | 24 |
Amortization of premium (discount) on marketable securities | 56 | (3) |
Amortization of debt discount | 78 | 60 |
Change in fair value of warrant liability | 2,270 | |
Non-cash stock compensation | 423 | 543 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (1,366) | 280 |
Accounts payable and accrued expenses | 10 | (1,653) |
Net cash used in operating activities | (5,048) | (8,325) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (13,832) | (1) |
Proceeds from sale or maturity of marketable securities | 9,211 | 6,556 |
Net cash provided by (used in) investing activities | (4,621) | 6,555 |
Cash flows from financing activities: | ||
Proceeds from notes payable and warrants, net | 14,740 | |
Payments for notes payable amendment costs | (48) | |
Proceeds from stock option exercises and employee stock plan purchases | 25 | |
Net cash (used in) provided by financing activities | (23) | 14,740 |
Net (decrease) increase in cash and cash equivalents | (9,692) | 12,970 |
Cash and cash equivalents, beginning of period | 20,229 | 15,267 |
Cash and cash equivalents, end of period | $ 10,537 | $ 28,237 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
Organization and Nature Of Operations [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION We are a biopharmaceutical company engaged in the research and development of innovative therapeutics to treat cancers and rare diseases. Our mission is to discover, develop and commercialize novel small molecule drugs in areas of high unmet need that will dramatically extend and improve the lives of our patients. These product candidates target biological pathways implicated in a wide range of cancers and certain non-oncology indications. Our discovery and development efforts are guided, when possible, by an understanding of the role of biomarkers, which are indicators of a particular biological condition or process and may predict the clinical benefit of our compounds in defined patient populations. Our clinical-stage pipeline consists of five product candidates, all of which are in targeted patient populations, making ArQule a leader among companies our size in precision medicine. ArQule has a long history of kinase drug discovery and development, having discovered and introduced ten kinase inhibitors into clinical trials. Our drug discovery efforts have been informed by our historical expertise in chemistry, our work in rational drug design and by our insight into kinase binding and regulation. We have applied this knowledge to produce significant chemical matter for a number of kinase targets and to build an extensive library of proprietary compounds with the potential to target multiple kinases in oncology and other therapeutic areas, such as rare diseases. We may bring further preclinical programs forward and interrogate our library against new targets beyond kinases either directly or with collaborators. Our pipeline of product candidates is directed toward molecular targets and biological processes with demonstrated roles in the development of both human cancers and rare, non-oncology diseases. All of these programs are being developed in targeted, biomarker-defined patient populations. By seeking out subgroups of patients that are most likely to respond to our drugs, we intend to identify small, often orphan, indications that allow for focused and efficient development. At the same time, in addition to pursuing these potentially fast-to-market strategies, we also pursue development in other indications that could allow us to expand the utility of the drugs if approved. The pipeline includes the following compounds all of which are wholly-owned, except derazantinib, which is partnered with Basilea Pharmaceutic Ltd. in all parts of the world except the People’s Republic of China, Hong Kong, Macau and Taiwan (“Greater China”), where it is partnered with Sinovant Sciences Ltd., a subsidiary of Roivant Sciences Ltd.: · ARQ 531, an orally bioavailable, potent and reversible inhibitor of both wild type and C481S-mutant BTK, in Phase 1 for B-cell malignancies refractory to other therapeutic options; · Miransertib (ARQ 092), a selective inhibitor of AKT, a serine/threonine kinase, in Phase 1/2 in rare Overgrowth Diseases and in Phase 1 for the rare disease, Proteus syndrome, in partnership with the National Institutes of Health (NIH); also in phase 1b in oncology in combination with the hormonal therapy, anastrozole, in endometrial cancer; · ARQ 751, a next-generation inhibitor of AKT, in Phase 1 for solid tumors harboring the AKT1 or PI3K mutation; · Derazantinib (ARQ 087), a multi-kinase inhibitor designed to preferentially inhibit the FGFR family of kinases, in a registrational trial in intrahepatic cholangiocarcinoma (iCCA) in patients with FGFR 2 fusions; and · ARQ 761, a ß-lapachone analog being evaluated as a promoter of NQO1-mediated programmed cancer cell death, in Phase 1/2 in multiple oncology indications in partnership with The University of Texas Southwest Medical Center. In February 2018, we entered into a License Agreement (the “Agreement”) with Sinovant Sciences Ltd. (“Sinovant”) and Roivant Sciences Ltd. (Roivant), the parent of Sinovant, pursuant to which ArQule granted Sinovant a license to develop, manufacture and exclusively commercialize its FGFR inhibitor, derazantinib (ARQ 087), in Greater China. The Agreement provides for an upfront payment to ArQule of $3 million and a guaranteed $2.5 million development milestone within the first year. ArQule is also eligible for an additional $82 million in regulatory and sales milestones. Upon commercialization, ArQule is entitled to receive double digit royalties in the low teens from Sinovant on net sales of derazantinib in the Greater China territory. Sinovant will be responsible for all costs and expenses of development, manufacture and commercialization in its territory. For the quarter ended March 31, 2018, we recognized revenue of $3.0 million for completing our performance obligation under this licensing agreement. In April 2018, we entered into a License Agreement (the “Basilea Agreement”) with Basilea Pharmaceutic Ltd. (“Basilea”) pursuant to which ArQule granted Basilea an exclusive license to develop, manufacture and commercialize its FGFR inhibitor, derazantinib (ARQ 087), in the United States, EU, Japan and the rest of the world, excluding Greater China. Under the terms of the Basilea agreement, ArQule will receive an upfront payment of $10 million and is eligible for up to $326 million in regulatory and commercial milestones. Upon commercialization, ArQule is entitled to receive staggered royalties on future net sales of derazantinib ranging from the high-single digits to the mid-teens on direct sales and mid-single digits to low-double digits on indirect sales. Basilea will be responsible for all costs and expenses of development, manufacture and commercialization in its territory. Under certain circumstances, ArQule may have the opportunity to promote derazantinib in the US directly. Tivantinib (ARQ 197), an orally administered, small molecule inhibitor of the c-Met receptor tyrosine kinase and its biological pathway is no longer being developed. We licensed commercial rights to tivantinib for human cancer indications to Daiichi Sankyo Co., Ltd. (“Daiichi Sankyo”) in the U.S., Europe, South America and the rest of the world, excluding Japan and certain other Asian countries, where we had licensed commercial rights to Kyowa Hakko Kirin Co., Ltd. (“Kyowa Hakko Kirin”). Our uses of cash for operating activities have primarily consisted of salaries and wages for our employees, facility and facility-related costs for our offices and laboratories, fees paid in connection with preclinical and clinical studies, laboratory supplies and materials, and professional fees. The sources of our cash flow from operating activities have consisted primarily of payments received from our collaborators for services performed or upfront payments for license agreements or future services. In the three months ended March 31, 2018 and 2017, our net use of cash was primarily driven by payments for operating expenses which resulted in net cash outflows of $5.0 million and $8.3 million, respectively. Our cash requirements may vary materially from those now planned depending upon the results of our drug discovery and development strategies, our ability to enter into additional corporate collaborations and the terms of such collaborations, results of research and development, unanticipated required capital expenditures, competitive and technological advances, acquisitions and other factors. We cannot guarantee that we will be able to develop any of our drug candidates into a commercial product. In January 2017, we entered into a loan and security agreement (the “Loan Agreement”) with a principal balance of $15 million (see Note 8). The terms of the Loan Agreement require payments of interest on a monthly basis through September 2018 and payments of interest from October 2018 to August 2021 and with principal payments commencing on September 1, 2019. The current maturity date of the loan is August 1, 2022 with principal payments commencing on September 1, 2019. In September 2017, we sold 2.0 million shares of common stock through an at-the-market (ATM) offering and raised net proceeds of $2.3 million. In October 2017, we entered into definitive stock purchase agreements with certain institutional investors. In conjunction with this stock offering we issued 13,938,651 shares of our common stock and warrants to purchase 3,123,674 shares of our common stock for aggregate net proceeds of $15.6 million. Each warrant is exercisable for $1.75 per share and expires in four years from the date of issuance. In November 2017, we entered into definitive securities purchase agreements with certain institutional investors. In conjunction with this stock offering the Company raised net proceeds of $9.5 million through the sale of 8,370 shares of series A convertible preferred stock (Series A Preferred) and warrants to purchase 2,259 shares of Series A Preferred (Warrants). Each share of Series A Preferred together with the associated Warrant is priced at $1,135 and will automatically convert into 1,000 shares of common stock upon the adoption of an amendment to the Company’s restated certificate of incorporation to increase the number of authorized shares of common stock thereunder. The Warrants have a pre-conversion exercise price of $1,750 per share of Series A Preferred (post-conversion price of $1.75 per share of common stock), are exercisable immediately and expire approximately four years from the date of the adoption of the amendment to the Company’s restated certificate of incorporation. We anticipate that our cash, cash equivalents and marketable securities on hand at March 31, 2018, and financial support from our licensing agreements will be sufficient to finance our operations for at least 12 months from the issuance date of these financial statements. We expect that we will need to raise additional capital or incur indebtedness to continue to fund our operations in the future. Our ability to raise additional funds will depend on financial, economic and market conditions, and due to global capital and credit market conditions or for other reasons, we may be unable to raise capital when needed, or on terms favorable to us. If necessary funds are not available, we may have to delay, reduce the scope of, or eliminate some of our development programs, potentially delaying the time to market for any of our product candidates. Adoption and Impact of the New Revenue Standard The Company adopted Accounting Standards Codification Topic 606—Revenue from Contracts with Customers, or Topic 606, on January 1, 2018, resulting in a change to its accounting policy for revenue recognition. Results for reporting periods beginning after January 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. We recorded a net increase to opening equity of $1.5 million as of January 1, 2018 due to the cumulative impact of adopting this new standard. Without applying the new revenue standard, the disclosed research and development revenue would have been $1.5 million higher than currently disclosed for the first three months of 2018. Contract receivables of $1.2 million are included within prepaid expenses and other current assets. The adoption of the new revenue standard did not have a material impact on any other balances within the condensed consolidated financial statements as of and for the three-months ended March 31, 2018. Under the new revenue standards, we recognize revenues when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract, and determines those that are performance obligations. Revenue is recognized when each distinct performance obligation is satisfied. The Company has collaboration and license agreements with drug development and pharmaceutical companies. The Company’s proprietary technology and intellectual property is the basis for many of these collaboration and license agreements and generally include contractual milestone events that coincide with the progression of development, regulatory and commercialization milestones. At the inception of each collaboration that includes developmental, regulatory or commercial milestone payments, the Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. Milestone payments that are not within the control of the Company, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third-party, are not considered probable of being achieved until those approvals are received or the specified event occurs. Revenue is recognized from the satisfaction of performance obligations in the amount billable to the customer. |
COLLABORATIONS AND ALLIANCES
COLLABORATIONS AND ALLIANCES | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |
COLLABORATIONS AND ALLIANCES | 2. COLLABORATIONS AND ALLIANCES Roivant Sciences Licensing Agreement In February 2018, we entered into a License Agreement (the “Agreement”) with Sinovant Sciences Ltd. (“Sinovant”) and Roivant Sciences Ltd. (Roivant), the parent of Sinovant, pursuant to which ArQule granted Sinovant a license to develop, manufacture and exclusively commercialize its FGFR inhibitor, derazantinib (ARQ 087), in Greater China. The Agreement provides for an upfront payment to ArQule of $3 million and a guaranteed $2.5 million development milestone within the first year. ArQule is also eligible for an additional $82 million in regulatory and sales milestones. Upon commercialization, ArQule is entitled to receive double digit royalties in the low teens from Sinovant on net sales of derazantinib in the Greater China territory. Sinovant will be responsible for all costs and expenses of development, manufacture and commercialization in its territory. For the quarter ended March 31, 2018, we recognized revenue of $3.0 million for completing our performance obligation under this licensing agreement. Basilea Licensing Agreement In April 2018, we entered into a License Agreement (the “Basilea Agreement”) with Basilea Pharmaceutic Ltd. (“Basilea”) pursuant to which ArQule granted Basilea an exclusive license to develop, manufacture and commercialize its FGFR inhibitor, derazantinib (ARQ 087), in the United States, EU, Japan and the rest of the world, excluding Greater China. Under the terms of the Basilea agreement, ArQule will receive an upfront payment of $10 million and is eligible for up to $326 million in regulatory and commercial milestones. Upon commercialization, ArQule is entitled to receive staggered royalties on future net sales of derazantinib ranging from the high-single digits to the mid-teens on direct sales and mid-single digits to low-double digits on indirect sales. Basilea will be responsible for all costs and expenses of development, manufacture and commercialization in its territory. Under certain circumstances, ArQule may have the opportunity to promote derazantinib in the US directly. Other Licensing Agreements In October 2017, we entered into a non-exclusive license agreement for certain library compounds. The licensed compounds were delivered and are subject to quality and acceptance testing. In 2017, we recorded deferred revenue of $1.5 million related to this licensing agreement which was recorded as an opening retained earnings adjustment upon the adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers on January 1, 2018. In the three months ended March 31, 2018, we recorded revenue of $1.1 million based upon the achievement of the quality and acceptance testing for the period. |
MARKETABLE SECURITIES AND FAIR
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Securities and Fair Value Measurements [Abstract] | |
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS | 3. MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS We generally classify our marketable securities as available-for-sale at the time of purchase and re-evaluate such designation as of each balance sheet date. Since we generally intend to convert them into cash as necessary to meet our liquidity requirements our marketable securities are classified as cash equivalents if the original maturity, from the date of purchase, is ninety days or less and as short-term investments if the original maturity, from the date of purchase, is in excess of ninety days but less than one year. Our marketable securities are classified as long-term investments if the maturity date is in excess of one year of the balance sheet date. We report available-for-sale investments at fair value as of each balance sheet date and include any unrealized gains and, to the extent deemed temporary, unrealized losses in stockholders’ equity. Realized gains and losses are determined using the specific identification method and are included in other income (expense) in the statement of operations and comprehensive loss. We conduct quarterly reviews to determine the fair value of our investment portfolio and to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to certain investments. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. In the event that the cost basis of a security exceeds its fair value, we evaluate, among other factors, the duration of the period that, and extent to which, the fair value is less than cost basis, the financial health of and business outlook for the issuer, including industry and sector performance, and operational and financing cash flow factors, overall market conditions and trends, our intent to sell the investment and if it is more likely than not that we would be required to sell the investment before its anticipated recovery. Unrealized losses on available-for-sale securities that are determined to be temporary, and not related to credit loss, are recorded in accumulated other comprehensive income (loss). For available-for-sale debt securities with unrealized losses, we perform an analysis to assess whether we intend to sell or whether we would more likely than not be required to sell the security before the expected recovery of the amortized cost basis. Where we intend to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected in the statement of operations and comprehensive loss as an impairment loss. Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security. We invest our available cash primarily in commercial paper, money market funds, and U.S. Treasury bill funds that have investment grade ratings. The following is a summary of the fair value of available-for-sale marketable securities we held at March 31, 2018 and December 31, 2017: March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Security type Corporate debt securities-short term $ 32,388 $ — $ (41 ) $ 32,347 Total available-for-sale marketable securities $ 32,388 $ — $ (41 ) $ 32,347 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Security type Corporate debt securities-short term $ 27,823 $ 1 $ (17 ) $ 27,807 Total available-for-sale marketable securities $ 27,823 $ 1 $ (17 ) $ 27,807 None of our available-for-sale marketable securities were in a continuous unrealized loss position for more than 12 months at March 31, 2018 or December 31, 2017. The following tables present information about our assets and liabilities that are measured at fair value on a recurring basis for the periods presented and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value. There were no transfers in or out of Level 1 or Level 2 measurements for the periods presented: March 31, 2018 Quoted Significant Significant Cash equivalents $ 8,484 $ 8,484 $ — $ — Corporate debt securities-short term 32,347 — 32,347 — Total $ 40,831 $ 8,484 32,347 $ — December 31, Quoted Significant Significant Cash equivalents $ 19,889 $ 19,889 $ — $ — Corporate debt securities-short term 27,807 — 27,807 — Total $ 47,696 $ 19,889 $ 27,807 $ — March 31, 2018 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Warrant liability $ 3,782 $ — $ — $ 3,782 December 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Warrant liability $ 1,512 $ — $ — $ 1,512 Due to the lack of market quotes relating to our preferred stock warrants, the fair value of the preferred stock warrants was determined at March 31, 2018 and December 31, 2017 using the Black-Scholes model, which is based on Level 3 inputs. The inputs used in the Black-Scholes model are presented below. The assumptions used may change as the underlying sources of these assumptions and market conditions change. Based on the Black-Scholes model, the Company recorded a preferred stock warrant liability of $3,782 at March 31, 2018 and $1,512 at December 31, 2017. The following are the Black-Scholes inputs to the warrant liability valuation for the periods presented: March 31, December 31, 2017 Exercise price $ 1.75 $ 1.75 Market price 2.88 1.65 Expected volatility 56.7 % 53.3 % Risk-free interest 2.44 % 2.07 % Expected term 3.61 years 3.85 years Dividends none none |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses include the following at March 31, 2018 and December 31, 2017: March 31, December 31, Accounts payable $ 396 $ 537 Accrued payroll 793 1,448 Accrued outsourced pre-clinical and clinical fees 6,039 5,409 Accrued professional fees 721 492 Other accrued expenses 320 373 $ 8,269 $ 8,259 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | 5. NET LOSS PER SHARE Net loss per share is computed using the weighted average number of common shares outstanding. Basic and diluted net loss per share amounts are equivalent for the periods presented as the inclusion of potential common shares in the number of shares used for the diluted computation would be anti-dilutive to loss per share. Potential common shares, for the quarter ended March 31, 2018, include 10,921,388 shares that would be issued upon the exercise of outstanding employee and Board of Director stock options, 354,330 shares that would be issued upon the exercise of the warrants from our January 2017 loan agreement, 93,168 shares that would be issued upon the exercise of the warrants from our February 2018 amendment to our loan agreement, 3,123,674 shares that would be issued upon the exercise of the warrants from our October 2017 common stock offering, 8,370,000 common shares that would be issued upon the conversion of the shares from our November 2017 preferred stock offering and 2,259,000 common shares that would be issued upon the exercise of the warrants from our November 2017 preferred stock offering. Potential common shares, for the three months ended March 31, 2017, include 9,504,090 shares that would be issued upon the exercise of outstanding employee stock options and 354,330 shares that would be issued upon the exercise of the warrants issued in conjunction with our January 2017 loan agreement. |
STOCK-BASED COMPENSATION AND ST
STOCK-BASED COMPENSATION AND STOCK PLANS | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
STOCK-BASED COMPENSATION AND STOCK PLANS | 6. STOCK-BASED COMPENSATION AND STOCK PLANS Our stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). We estimate the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of our stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. We believe that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options granted in the three months ended March 31, 2018 and 2017. The following table presents stock-based compensation expense included in our Condensed Statements of Operations and Comprehensive Loss: Three Months Ended 2018 2017 Research and development $ 106 $ 130 General and administrative 317 413 Total stock-based compensation expense $ 423 $ 543 In the three months ended March 31, 2018 and 2017, no stock-based compensation expense was capitalized and there were no recognized tax benefits associated with the stock-based compensation expense. Option activity under our stock plans for the three months ended March 31, 2018 was as follows: Stock Options Number of Weighted Outstanding as of December 31, 2017 10,622,455 $ 3.01 Granted 831,270 1.73 Exercised (15,125 ) 1.68 Cancelled (517,212 ) 3.10 Outstanding as of March 31, 2018 10,921,388 $ 2.91 Exercisable as of March 31, 2018 7,071,489 $ 3.74 The aggregate intrinsic value of options outstanding at March 31, 2018 was $9,055 and $3,281 related to exercisable options. The weighted average fair value of options granted in the three months ended March 31, 2018 and 2017 was $1.07 and $0.93 per share, respectively. The intrinsic value of options exercised in the three months ended March 31, 2018 was $15. Shares Weighted- Weighted- Aggregate Vested and unvested expected to vest at March 31, 2018 10,788,462 $ 2.91 5.8 $ 9,055 Exercisable at March 31, 2018 7,071,489 $ 3.74 4.2 $ 3,281 The total compensation cost not yet recognized as of March 31, 2018 related to non-vested option awards was $2.6 million, which will be recognized over a weighted-average period of 2.8 years. During the three months ended March 31, 2018, 275,587 shares expired and 241,625 shares were forfeited. The weighted average remaining contractual life for options exercisable at March 31, 2018 was 4.2 years. |
COMMON STOCK OFFERINGS
COMMON STOCK OFFERINGS | 3 Months Ended |
Mar. 31, 2018 | |
Common Stock [Abstract] | |
COMMON STOCK OFFERINGS | 7. COMMON STOCK OFFERINGS In October 2017, we entered into definitive securities purchase agreements with certain institutional investors. In conjunction with this stock offering, we issued 13,938,651 shares of our common stock and warrants for 3,123,674 shares of our common stock for aggregate net proceeds of $15.6 million. Each warrant is exercisable for $1.75 per share and expires in four years from the date of issuance. In September 2017, we sold 2.0 million shares of common stock through an at-the-market (“ATM”) offering and raised net proceeds of approximately $2.3 million. In February 2016, we entered into definitive stock purchase agreements with certain institutional and accredited investors. In conjunction with this stock offering we issued 8,027,900 shares of our common stock and non-transferable options for 3,567,956 shares of our common stock for aggregate net proceeds of $15.2 million. Each option was exercisable for $2.50 per share and they all expired in March 2017. |
LOAN AGREEMENT
LOAN AGREEMENT | 3 Months Ended |
Mar. 31, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
LOAN AGREEMENT | 8. LOAN AGREEMENT In January 2017, Oxford Finance LLC, as collateral agent and a lender (the “Lender”), and any additional lenders that may become parties thereto, entered into a loan and security agreement with us (the “Loan Agreement”). Pursuant to the terms of the Loan Agreement, the Lender issued us a loan in the principal amount of $15.0 million. The loan bears interest at the rate equal to (a) the greater of (i) the 30 day U.S. LIBOR rate reported in the Wall Street Journal on the date occurring on the last business day of the month that immediately precedes the month in which the interest will accrue or (ii) 0.65% (b) plus 6.85%. The applicable interest rate on the loan at December 31, 2017 was 8.22%. The Loan Agreement required interest-only payments for 18 months, followed by an amortization period of 36 months. The original maturity date of the loan was August 1, 2021 and in February 2018 we signed an amendment with the Lender which extended the maturity date by one year to August 1, 2022 with principal payments commencing on September 1, 2019. The expected remaining repayment of the $15 million loan principal at March 31, 2018 is as follows: 2019 $ 1,667 2020 5,000 2021 5,000 2022 3,333 $ 15,000 Upon the earlier of prepayment or the maturity date, we will pay to the Lender a final payment of 6% of the full principal amount of the loan. We may elect to prepay all amounts owed prior to the maturity date, provided that a prepayment fee also is paid equal to (i) 3% of the outstanding principal balance if prepayment occurs in months 1-12 following the closing, (ii) 2.0% of the outstanding principal balance in months 13-24 following the closing, and (iii) 1% thereafter. Pursuant to the terms of the Loan Agreement, we are bound by certain affirmative covenants setting forth actions that are required during the term of the Loan Agreement, including, without limitation, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. Additionally, we are bound by certain negative covenants setting forth actions that are not permitted to be taken during the term of the Loan Agreement without consent, including, without limitation, incurring certain additional indebtedness, entering into certain mergers, acquisitions or other business combination transactions, or incurring any non-permitted lien or other encumbrance on our assets. We were in compliance with the loan covenants at March 31, 2018. Upon the occurrence of an event of default under the Loan Agreement (subject to cure periods for certain events of default), all amounts owed by us thereunder will begin to bear interest at a rate that is 5% higher than the rate that is otherwise applicable and may be declared immediately due and payable by the Lender. Events of default under the Loan Agreement include, among other things, the following: the occurrence of certain bankruptcy events; the failure to make payments under the Loan Agreement when due; the occurrence of a material adverse change in our business, operations or financial condition; the rendering of certain types of fines or judgments against us; any breach by us of any covenant (subject to cure for certain covenants only) made in the Loan Agreement; and the failure of any representation or warranty made by us in connection with the Loan Agreement to be correct in all material respects when made. We have granted the Lender, a security interest in substantially all of our personal property, rights and assets, other than intellectual property, to secure the payment of all amounts owed to the Lender under the Loan Agreement. We have also agreed not to encumber any of our intellectual property without required lenders’ prior written consent. In connection with entering into the Loan Agreement, we issued to the Lender warrants to purchase an aggregate of 354,330 shares of our common stock (the “Lender Warrants”). The warrants are exercisable immediately, have a per-share exercise price of $1.27 and have a term of ten years. We have recorded the relative fair value of the warrants as a discount to the carrying value of the notes payable with a corresponding increase to additional paid in capital. In February 2018, the Loan Agreement was amended requiring payments of interest on a monthly basis through August 2019 and payments of interest and principal from September 2019 to August 2022. In connection with entering into the amendment we issued to the Lender warrants to purchase an aggregate of 93,168 shares of our common stock. The warrants are exercisable immediately, have a per-share exercise price of $1.61 and have a term of ten years. The amendment was determined to be a modification of debt in accordance with ASC 470 Debt. We have recorded the relative fair value of the additional warrants as a discount to the carrying value of the notes payable with a corresponding increase to additional paid in capital. |
PREFERRED STOCK AND WARRANT LIA
PREFERRED STOCK AND WARRANT LIABILITY | 3 Months Ended |
Mar. 31, 2018 | |
Preferred Stock And Warrant Liability [Abstract] | |
PREFERRED STOCK AND WARRANT LIABILITY | 9. PREFERRED STOCK AND WARRANT LIABILITY Our amended Certificate of Incorporation authorizes the issuance of up to 1 million shares of $0.01 par value preferred stock. In November 2017, we entered into definitive securities purchase agreements with certain institutional investors. In conjunction with this stock offering the Company raised net proceeds of $9.5 million through the sale of 8,370 shares of series A convertible preferred stock (Series A Preferred) and warrants covering 2,259 shares of Series A Preferred (Warrants). Each share of Series A Preferred together with the associated Warrant is priced at $1,135 and will automatically convert into 1,000 shares of common stock upon the adoption of an amendment to the Company’s restated certificate of incorporation to increase the number of authorized shares of common stock thereunder. The amount reported as preferred stock at March 31, 2018 and The terms of the Series A Preferred, specifically the terms of the liquidation preference, require the classification of the preferred stock as temporary equity, which is reflected in our balance sheet as of March 31, 2018 and December 31, 2017. In addition, the terms of the Series A Preferred for which the warrants are exercisable require that the fair value allocated to the warrants at the date of issuance be recorded as a liability. The warrant liability is marked to market value through the income statement as a non-cash gain or loss at each reporting period. The Warrants have a pre-conversion exercise price of $1,750 per share of Series A Preferred (post-conversion price of $1.75 per share of common stock), are exercisable immediately and expire approximately four years from the date of the adoption of the amendment to the Company’s restated certificate of incorporation. In the three months ended March 31, 2018 the fair value of the warrant liability increased to $3.8 million and consequently a $2.3 million non-cash expense was recorded. Upon conversion of the Series A Preferred common stock the warrant liability will be extinguished with an offsetting amount included as additional paid-in capital in stockholders’ equity. The Series A Preferred Stockholders vote on an as converted basis together as one class with the holders of common stock. If declared by the board, the Series A Preferred are eligible for a dividend on an as-converted basis. If the Company’s restated certificate of incorporation has not been adopted by July 1, 2018, the Series A Preferred will obtain a dividend in kind until such time as the restated certificate of incorporation is adopted. In the case of a liquidation event or deemed liquidation event defined by the definitive securities purchase agreements the holders of Series A Preferred Stock have a liquidation preference on the greater of the Series A Preferred Stock stated value or the consideration that would have been paid on such Series A Preferred Stock in the applicable liquidation event. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 10. RECENT ACCOUNTING PRONOUNCEMENTS From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. In May 2017 the FASB issued Accounting Standard Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This new standard provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. This new standard became effective for us on January 1, 2018. The adoption of this standard did not have a material impact on our financial position or results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This new standard clarifies certain aspects of the statement of cash flows, including the classification of debt prepayment or debt extinguishment costs or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. This new standard also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. This new standard became effective for us on January 1, 2018. The adoption of this standard did not have a material impact on our statements of cash flows upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The new standard will be effective for us on January 1, 2019. The company is currently assessing the impact that adoption of this standard will have on our financial statements. In May 2014 the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued amendments to ASU No. 2014-09 that have the same effective date and transition date. These new standards became effective for us on January 1, 2018, and we adopted them using the modified retrospective method through a $1.5 million cumulative-effect adjustment directly to retained earnings as of that date. The adoption of these new standards may result in a change in the timing of revenue recognition related to certain of our licensing activities. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES As of December 31, 2017, we had federal NOL, state NOL, and research and development credit carryforwards of approximately $409,409, $228,565 and $28,253 respectively, which expire at various dates through 2037. We recorded a deferred tax asset for previously unrecognized excess tax benefit, offset by valuation allowance upon the adoption in 2017 of ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” As of March 31, 2018 and December 31, 2017 we had no unrecognized tax benefits. We do not expect that the total amount of unrecognized tax benefits will significantly increase in the next twelve months. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2018 and December 31, 2017, we had no accrued interest or penalties related to uncertain tax positions. Our U.S. federal tax returns for the tax years 2013 through 2017 and our state tax returns for the tax years 2013 through 2017 remain open to examination. Prior tax years remain open to the extent of net operating loss and tax credit carryforwards. Utilization of NOL and research and development credit carryforwards may be subject to a substantial annual limitation in the event of an ownership change that has occurred previously or could occur in the future pursuant to Section 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. An ownership change may limit the amount of NOL and research and development credit carryforwards that can be utilized annually to offset future taxable income, and may, in turn, result in the expiration of a portion of those carryforwards before utilization. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. We undertook a detailed study of our NOL and research and development credit carryforwards through January 31, 2018, to determine whether such amounts are likely to be limited by Sections 382 or 383. As a result of this analysis, we currently do not believe any Sections 382 or 383 limitations will significantly impact our ability to offset income with available NOL and research and development credit carryforwards. However, future ownership changes under Section 382 may limit our ability to fully utilize these tax benefits. |
MARKETABLE SECURITIES AND FAI17
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Securities and Fair Value Measurements [Abstract] | |
Schedule of fair value of available-for-sale marketable securities | March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Security type Corporate debt securities-short term $ 32,388 $ — $ (41 ) $ 32,347 Total available-for-sale marketable securities $ 32,388 $ — $ (41 ) $ 32,347 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Security type Corporate debt securities-short term $ 27,823 $ 1 $ (17 ) $ 27,807 Total available-for-sale marketable securities $ 27,823 $ 1 $ (17 ) $ 27,807 |
Schedule of assets and liabilities that are measured at fair value on recurring basis | March 31, 2018 Quoted Significant Significant Cash equivalents $ 8,484 $ 8,484 $ — $ — Corporate debt securities-short term 32,347 — 32,347 — Total $ 40,831 $ 8,484 32,347 $ — December 31, Quoted Significant Significant Cash equivalents $ 19,889 $ 19,889 $ — $ — Corporate debt securities-short term 27,807 — 27,807 — Total $ 47,696 $ 19,889 $ 27,807 $ — March 31, 2018 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Warrant liability $ 3,782 $ — $ — $ 3,782 December 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Warrant liability $ 1,512 $ — $ — $ 1,512 |
Schedule of warrant liability | March 31, December 31, 2017 Exercise price $ 1.75 $ 1.75 Market price 2.88 1.65 Expected volatility 56.7 % 53.3 % Risk-free interest 2.44 % 2.07 % Expected term 3.61 years 3.85 years Dividends none none |
ACCOUNTS PAYABLE AND ACCRUED 18
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | March 31, December 31, Accounts payable $ 396 $ 537 Accrued payroll 793 1,448 Accrued outsourced pre-clinical and clinical fees 6,039 5,409 Accrued professional fees 721 492 Other accrued expenses 320 373 $ 8,269 $ 8,259 |
STOCK-BASED COMPENSATION AND 19
STOCK-BASED COMPENSATION AND STOCK PLANS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
Schedule of stock-based compensation expense | Three Months Ended 2018 2017 Research and development $ 106 $ 130 General and administrative 317 413 Total stock-based compensation expense $ 423 $ 543 |
Schedule of options outstanding | Stock Options Number of Weighted Outstanding as of December 31, 2017 10,622,455 $ 3.01 Granted 831,270 1.73 Exercised (15,125 ) 1.68 Cancelled (517,212 ) 3.10 Outstanding as of March 31, 2018 10,921,388 $ 2.91 Exercisable as of March 31, 2018 7,071,489 $ 3.74 |
Schedule of options vested, expected to vest and exercisable | Shares Weighted- Weighted- Aggregate Vested and unvested expected to vest at March 31, 2018 10,788,462 $ 2.91 5.8 $ 9,055 Exercisable at March 31, 2018 7,071,489 $ 3.74 4.2 $ 3,281 |
LOAN AGREEMENT (Tables)
LOAN AGREEMENT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of expected remaining repayment | 2019 $ 1,667 2020 5,000 2021 5,000 2022 3,333 $ 15,000 |
NATURE OF OPERATIONS AND BASI21
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 31, 2017 | |
Organization And Nature Of Operations [Line Items] | |||||||||
Net use of cash | $ (5,048) | $ (8,325) | |||||||
Loan principal amount | $ 15,000 | ||||||||
Proceeds from stock offering | $ 2,300 | ||||||||
Number of stock issued under agreement | 2,000,000 | ||||||||
Cumulative impact for accounting changes | 1,500 | ||||||||
Contract receivables included in prepaid expenses and other current assets | 1,200 | ||||||||
Definitive stock purchase agreements | |||||||||
Organization And Nature Of Operations [Line Items] | |||||||||
Number of stock issued under agreement | 13,938,651 | ||||||||
Proceeds from sale of common stock | $ 15,600 | ||||||||
Number of warrants issued to purchase common stock | 3,123,674 | ||||||||
Exercise price of warrants or rights | $ 1.75 | ||||||||
Term of warrant | 4 years | ||||||||
Definitive stock purchase agreements | Series A Convertible Preferred Stock and Warrants | |||||||||
Organization And Nature Of Operations [Line Items] | |||||||||
Proceeds from stock offering | $ 9,500 | ||||||||
Value of each share of Series A Preferred and Warrant | $ 1,135 | ||||||||
Number of common stock issued upon conversion | 1,000 | ||||||||
Net proceeds from offering | 8,800 | $ 8,800 | |||||||
Definitive stock purchase agreements | Series A convertible preferred stock | |||||||||
Organization And Nature Of Operations [Line Items] | |||||||||
Number of stock issued under agreement | 8,370 | ||||||||
Definitive stock purchase agreements | Series A Preferred Warrants | |||||||||
Organization And Nature Of Operations [Line Items] | |||||||||
Number of stock issued under agreement | 2,259 | ||||||||
Warrants, pre-conversion exercise price | $ 1,750 | ||||||||
Post-conversion price of common stock | $ 1.75 | ||||||||
Term of warrant | 4 years | ||||||||
Roivant Sciences Licensing Agreement | Roivant Sciences | |||||||||
Organization And Nature Of Operations [Line Items] | |||||||||
Upfront payment | $ 3,000 | ||||||||
Additional development milestone | 2,500 | ||||||||
Regulatory and sales milestones | $ 82,000 | ||||||||
Revenue for completing performance obligation | $ 3,000 | ||||||||
Subsequent event | Basilea Licensing Agreement | Basilea Pharmaceutica International Limited | |||||||||
Organization And Nature Of Operations [Line Items] | |||||||||
Upfront payment | $ 10,000 | ||||||||
Regulatory and sales milestones | $ 326,000 |
COLLABORATIONS AND ALLIANCES (D
COLLABORATIONS AND ALLIANCES (Detail Textuals) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2018 | Feb. 28, 2018 | Mar. 31, 2018 | Oct. 31, 2017 | |
Other Licensing Agreements | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Deferred revenue | $ 1.5 | |||
Revenue for completing performance obligation | $ 1.1 | |||
Roivant Sciences Licensing Agreement | Roivant Sciences | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Upfront payment | $ 3 | |||
Additional development milestone | 2.5 | |||
Regulatory and sales milestones | $ 82 | |||
Revenue for completing performance obligation | $ 3 | |||
Basilea Licensing Agreement | Basilea Pharmaceutica International Limited | Subsequent event | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Upfront payment | $ 10 | |||
Regulatory and sales milestones | $ 326 |
MARKETABLE SECURITIES AND FAI23
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Summary of fair value of available-for-sale securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 32,388 | $ 27,823 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (41) | (17) |
Fair Value | 32,347 | 27,807 |
Corporate debt securities | Short term | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 32,388 | 27,823 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (41) | (17) |
Fair Value | $ 32,347 | $ 27,807 |
MARKETABLE SECURITIES AND FAI24
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Assets measured at fair value on a recurring basis (Details 1) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities-short term | $ 32,347 | $ 27,807 |
Warrant liability | 3,782 | 1,512 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 8,484 | 19,889 |
Corporate debt securities-short term | 32,347 | 27,807 |
Total | 40,831 | 47,696 |
Warrant liability | 3,782 | 1,512 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 8,484 | 19,889 |
Corporate debt securities-short term | 0 | 0 |
Total | 8,484 | 19,889 |
Warrant liability | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Corporate debt securities-short term | 32,347 | 27,807 |
Total | 32,347 | 27,807 |
Warrant liability | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Corporate debt securities-short term | 0 | 0 |
Total | 0 | 0 |
Warrant liability | $ 3,782 | $ 1,512 |
MARKETABLE SECURITIES AND FAI25
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS - Warrant liability valuation (Details 2) - Warrant liability - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Exercise price | $ 1.75 | $ 1.75 |
Market price | $ 2.88 | $ 1.65 |
Expected volatility | 56.70% | 53.30% |
Risk-free interest | 2.44% | 2.07% |
Expected term | 3 years 7 months 10 days | 3 years 10 months 6 days |
Dividends | 0.00% | 0.00% |
MARKETABLE SECURITIES AND FAI26
MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Marketable Securities and Fair Value Measurements [Abstract] | ||
Valuation method | Black-Scholes model | |
Warrant liability | $ 3,782 | $ 1,512 |
ACCOUNTS PAYABLE AND ACCRUED 27
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Summary of accounts payable and accrued expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 396 | $ 537 |
Accrued payroll | 793 | 1,448 |
Accrued outsourced pre-clinical and clinical fees | 6,039 | 5,409 |
Accrued professional fees | 721 | 492 |
Other accrued expenses | 320 | 373 |
Accounts payable and accrued expenses, Total | $ 8,269 | $ 8,259 |
NET LOSS PER SHARE (Detail Text
NET LOSS PER SHARE (Detail Textuals) - Stock Options - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Exercise of outstanding employee and Board of Director stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares of common stock not included in computations of diluted net loss per share | 10,921,388 | 9,504,090 |
Exercise of warrants from January 2017 loan agreement | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares of common stock not included in computations of diluted net loss per share | 354,330 | 354,330 |
Exercise of options from February 2018 loan agreement | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares of common stock not included in computations of diluted net loss per share | 93,168 | |
Exercise of warrants from October 2017 common stock offering | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares of common stock not included in computations of diluted net loss per share | 3,123,674 | |
Conversion of shares from November 2017 preferred stock offering | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares of common stock not included in computations of diluted net loss per share | 8,370,000 | |
Exercise of warrants from November 2017 preferred stock offering | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares of common stock not included in computations of diluted net loss per share | 2,259,000 |
STOCK-BASED COMPENSATION AND 29
STOCK-BASED COMPENSATION AND STOCK PLANS - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 423 | $ 543 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 106 | 130 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 317 | $ 413 |
STOCK-BASED COMPENSATION AND 30
STOCK-BASED COMPENSATION AND STOCK PLANS - Option activity (Details 1) - Stock Options | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Outstanding as of December 31, 2017 | shares | 10,622,455 |
Granted | shares | 831,270 |
Exercised | shares | (15,125) |
Cancelled | shares | (517,212) |
Outstanding as of March 31, 2018 | shares | 10,921,388 |
Exercisable as of March 31, 2018 | shares | 7,071,489 |
Weighted Average Exercise Price | |
Outstanding as of December 31, 2017 | $ / shares | $ 3.01 |
Granted | $ / shares | 1.73 |
Exercised | $ / shares | 1.68 |
Cancelled | $ / shares | 3.10 |
Outstanding as of March 31, 2018 | $ / shares | 2.91 |
Exercisable as of March 31, 2018 | $ / shares | $ 3.74 |
STOCK-BASED COMPENSATION AND 31
STOCK-BASED COMPENSATION AND STOCK PLANS - Shares vested, expected to vest and exercisable (Details 2) - Stock Options $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vested and unvested expected to vest, Options | shares | 10,788,462 |
Vested and unvested expected to vest, weighted-average exercise price | $ / shares | $ 2.91 |
Vested and unvested expected to vest, weighted-average remaining contractual term (in years) | 5 years 9 months 18 days |
Vested and unvested expected to vest, aggregate intrinsic value | $ | $ 9,055 |
Exercisable, Options | shares | 7,071,489 |
Exercisable, weighted-average exercise price | $ / shares | $ 3.74 |
Exercisable, weighted-average remaining contractual term (in years) | 4 years 2 months 12 days |
Exercisable, aggregate intrinsic value | $ | $ 3,281 |
STOCK-BASED COMPENSATION AND 32
STOCK-BASED COMPENSATION AND STOCK PLANS (Detail Textuals) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate intrinsic value of options outstanding | $ 9,055 | |
Intrinsic value of options exercisable | $ 3,281 | |
Weighted average grant date fair value of options granted (in dollars per share) | $ 1.07 | $ 0.93 |
Intrinsic value of options exercised | $ 15 | |
Compensation cost not yet recognized related to non-vested option awards | $ 2,600 | |
Weighted-average recognition period related to non-vested option awards | 2 years 9 months 18 days | |
Number of shares expired during the period | 275,587 | |
Number of shares forfeited during the period | 241,625 | |
Weighted average remaining contractual life for options exercisable | 4 years 2 months 12 days |
COMMON STOCK (Detail Textuals)
COMMON STOCK (Detail Textuals) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | ||||
Oct. 31, 2017 | Sep. 30, 2017 | Feb. 29, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | |
Common Stock [Line Items] | |||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Number of common stock issued under agreement | 2,000,000 | ||||
Proceeds from stock offering | $ 2.3 | ||||
Definitive stock purchase agreements | |||||
Common Stock [Line Items] | |||||
Number of shares available for grant | 8,027,900 | ||||
Number of common stock issued under agreement | 13,938,651 | ||||
Number of warrants issued to purchase common stock | 3,123,674 | ||||
Proceeds from Issuance of Common Stock | $ 15.6 | ||||
Exercise price of warrants or rights | $ 1.75 | ||||
Term of warrant | 4 years | ||||
Number of non transferable options issued | 3,567,956 | ||||
Aggregate net proceeds | $ 15.2 | ||||
Stock option exercise price | $ 2.50 |
LOAN AGREEMENT (Details)
LOAN AGREEMENT (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Long-term Debt, Unclassified [Abstract] | |
2,019 | $ 1,667 |
2,020 | 5,000 |
2,021 | 5,000 |
2,022 | 3,333 |
Loan principal amount | $ 15,000 |
LOAN AGREEMENT (Detail Textuals
LOAN AGREEMENT (Detail Textuals) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2018 | Jan. 31, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Loan principal amount | $ 15 | ||
Oxford Finance Llc | Loan Agreement | |||
Debt Instrument [Line Items] | |||
Loan principal amount | $ 15 | ||
Interest rate description | (a) the greater of (i) the 30 day U.S. LIBOR rate reported in the Wall Street Journal on the date occurring on the last business day of the month that immediately precedes the month in which the interest will accrue or (ii) 0.65% (b) plus 6.85% | ||
Interest rate | 0.65% | ||
Basis spread interest rate | 6.85% | ||
Applicable interest rate | 8.22% | ||
Period of interest rate payments | 18 months | ||
Amortization period | 36 months | ||
Maturity date | Aug. 1, 2022 | Aug. 1, 2021 | |
Percentage of final principal payment | 6.00% | ||
Percentage of prepayment fee if payment made in 1 to 12 months | 3.00% | ||
Percentage of prepayment fee if payment made in 13 to 24 months | 2.00% | ||
Percentage of prepayment fee if payment made thereafter 24 months | 1.00% | ||
Additional interest rate after default | 5.00% | ||
Term of payment of interest after amendment | Monthly basis through August 2019 | ||
Term of payment of interest and principal after amendment | From September 2019 to August 2022 | ||
Oxford Finance Llc | Loan Agreement | Lender Warrants | |||
Debt Instrument [Line Items] | |||
Number of warrants issued to purchase common stock | 93,168 | 354,330 | |
Pre-share exercise price of warrants or rights | $ 1.61 | $ 1.27 | |
Exercise term of warrants or rights | 10 years | 10 years |
PREFERRED STOCK AND WARRANT L36
PREFERRED STOCK AND WARRANT LIABILITY (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Preferred Stock And Warrant Liability [Line Items] | |||||
Series A Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||
Series A Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Proceeds from stock offering | $ 2,300 | ||||
Number of stock issued under agreement | 2,000,000 | ||||
Definitive stock purchase agreements | |||||
Preferred Stock And Warrant Liability [Line Items] | |||||
Number of stock issued under agreement | 13,938,651 | ||||
Exercise price of warrants or rights | $ 1.75 | ||||
Term of warrant | 4 years | ||||
Definitive stock purchase agreements | Series A convertible preferred stock and warrants | |||||
Preferred Stock And Warrant Liability [Line Items] | |||||
Proceeds from stock offering | $ 9,500 | ||||
Value of each share of Series A Preferred and Warrant | $ 1,135 | ||||
Number of common stock issued upon conversion | 1,000 | ||||
Net proceeds from offering | $ 8,800 | $ 8,800 | |||
Definitive stock purchase agreements | Series A convertible preferred stock | |||||
Preferred Stock And Warrant Liability [Line Items] | |||||
Number of stock issued under agreement | 8,370 | ||||
Definitive stock purchase agreements | Series A Preferred Warrants | |||||
Preferred Stock And Warrant Liability [Line Items] | |||||
Number of stock issued under agreement | 2,259 | ||||
Warrants, pre-conversion exercise price | $ 1,750 | ||||
Post-conversion price of common stock | $ 1.75 | ||||
Term of warrant | 4 years | ||||
Fair value of warrants liability increased | 3,800 | ||||
Non-cash expense | $ 2,300 |
RECENT ACCOUNTING PRONOUNCEME37
RECENT ACCOUNTING PRONOUNCEMENTS (Detail Textuals) $ in Millions | Mar. 31, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative impact for accounting changes | $ 1.5 |
Accounting Standards Update 2014-09 | Other Licensing Agreements | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative impact for accounting changes | $ 1.5 |
INCOME TAXES (Detail Textuals)
INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Increase in ownership percentage of certain stockholders or public groups | more than 50 percentage points | |
Ownership change, increase in ownership percentage, term | 3 years | |
Federal income tax | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 409,409 | |
State income tax | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 228,565 | |
Research and development credit carryforwards | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 28,253 |