Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document and Entity Information | ' |
Entity Registrant Name | 'PTC THERAPEUTICS, INC. |
Entity Central Index Key | '0001070081 |
Document Type | 'S-1/A |
Document Period End Date | 30-Sep-13 |
Amendment Flag | 'true |
Amendment Description | 'Amendment number 1 |
Pre-Effective Amendment Number | '1 |
Entity Filer Category | 'Non-accelerated Filer |
Balance_sheets
Balance sheets (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Current assets: | ' | ' |
Cash and cash equivalents | $2,725,702 | $28,431,410 |
Prepaid expenses and other current assets | 855,750 | 3,379,199 |
Grant and collaboration receivables, net | 1,013,813 | 1,244,128 |
Total current assets | 4,595,265 | 33,054,737 |
Fixed assets, net | 8,280,037 | 10,795,507 |
Deposits and other assets | 197,050 | 297,916 |
Total assets | 13,072,352 | 44,148,160 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 7,023,971 | 13,049,454 |
Current portion of long-term debt | 4,444,171 | 7,139,975 |
Deferred revenue | 16,690,747 | 22,955,901 |
Total current liabilities | 28,158,889 | 43,145,330 |
Deferred revenue, less current portion | 741,667 | 16,448,656 |
Long-term debt, less current portion | 438,810 | 4,549,332 |
Other long-term liabilities | 2,549,719 | 4,229,617 |
Total liabilities | 31,889,085 | 68,372,935 |
Commitments and contingencies (Note 12) | ' | ' |
Stockholders' deficit: | ' | ' |
Common stock, $0.001 par value. Authorized 216,666 shares; issued and outstanding 1,083 shares at December 31, 2011 and 4,526 shares at December 31, 2012 | 545 | 133 |
Additional paid-in capital | 177,583,672 | 12,007,007 |
Accumulated deficit | -277,224,718 | -250,611,829 |
Total stockholders' (deficit) equity | -99,640,501 | -238,604,689 |
Total liabilities, convertible preferred stocks and stockholders' (deficit) equity | 13,072,352 | 44,148,160 |
Series One convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 62,263,852 | ' |
Series Two convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 18,182,129 | ' |
Series Three convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 377,787 | ' |
Series A-G convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | ' | 214,379,914 |
Series A convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 750,000 |
Series B convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 364,524 |
Series C convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 14,117,089 |
Series D convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 39,282,460 |
Series E convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 49,048,047 |
Series E-2 convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 26,509,451 |
Series F convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 10,000,000 |
Series F-2 convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | 0 | 24,114,456 |
Series G convertible preferred stock | ' | ' |
Current liabilities: | ' | ' |
Preferred stock | $0 | $50,193,887 |
Balance_sheets_Parenthetical
Balance sheets (Parenthetical) (USD $) | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 |
Series A convertible preferred stock | Series B convertible preferred stock | Series C convertible preferred stock | Series D convertible preferred stock | Series E convertible preferred stock | Series E-2 convertible preferred stock | Series F convertible preferred stock | Series F-2 convertible preferred stock | Series G convertible preferred stock | |
Preferred stock, designated shares | 750,000 | 187,500 | 6,295,000 | 13,769,935 | 126,735,022 | 3,670,138 | 675,000 | 1,612,500 | 3,300,000 |
Preferred stock, issued shares | 750,000 | 187,500 | 6,000,000 | 13,095,769 | 125,740,607 | 3,670,138 | 625,000 | 1,515,503 | 3,143,750 |
Preferred stock, outstanding shares | 750,000 | 187,500 | 6,000,000 | 13,095,769 | 125,740,607 | 3,670,138 | 625,000 | 1,515,503 | 3,143,750 |
Preferred stock, liquidation preference | $750,000 | $375,000 | $15,000,000 | $42,561,249 | $49,999,998 | $26,645,187 | $10,000,000 | $24,248,048 | $50,300,000 |
Statements_of_operations
Statements of operations (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Revenues: | ' | ' |
Collaboration revenue | $28,779,078 | $98,960,851 |
Grant revenue | 5,166,985 | 6,451,296 |
Total revenues and non-cash cancellation revenue | 33,946,063 | 105,412,147 |
Operating expenses: | ' | ' |
Research and development | 46,138,868 | 58,677,081 |
General and administrative | 14,615,376 | 16,153,069 |
Total operating expenses | 60,754,244 | 74,830,150 |
Loss from operations | -26,808,181 | 30,581,997 |
Interest expense, net | -1,209,577 | -2,444,417 |
Other income, net | 1,782,656 | 461,358 |
Income (loss) from operations before tax benefit | -26,235,102 | 28,598,938 |
Tax benefit | ' | 2,305,576 |
Net loss | -26,235,102 | 30,904,514 |
Gain on exchange of convertible preferred stock in connection with recapitalization | 159,954,069 | ' |
Less beneficial conversion charge | -377,787 | ' |
Net (loss) income attributable to common stockholders | $133,341,180 | $30,904,514 |
Net income attributable to common stockholders per share: | ' | ' |
Basic (in dollars per share) | $219.76 | $23.95 |
Diluted (in dollars per share) | $42.50 | $4.55 |
Weighted-average shares outstanding: | ' | ' |
Basic (in shares) | 3,328 | 1,089 |
Diluted (in shares) | 17,205 | 5,729 |
Pro forma net income per share applicable to common stockholders-(unaudited) (in dollars per share) | $9.40 | ' |
Pro forma weighted-average number of shares outstanding (unaudited) | 14,188,161 | ' |
Statements_of_comprehensive_in
Statements of comprehensive income (loss) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Statements of comprehensive loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ($4,416,499) | ($14,586,578) | ($14,684,535) | ($6,272,044) | ($7,297,125) | ($6,068,072) | ($6,597,861) | ($5,764,646) | $67,608,165 | ($15,388,398) | ($15,550,607) | ($33,687,612) | ($19,963,058) | ($26,235,102) | $30,904,514 |
Other comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized loss on investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -40,467 | ' | ' | -3,606 |
Comprehensive loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($33,728,079) | ($19,963,058) | ($26,235,102) | $30,900,908 |
Statements_of_convertible_pref
Statements of convertible preferred stock and changes in stockholders' deficit (USD $) | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Series A-G convertible preferred stock | Series one-three convertible preferred stock |
Balance at Dec. 31, 2010 | ($272,328,123) | $131 | $9,184,483 | $3,606 | ($281,516,343) | ' | ' |
Balance, beginning of period at Dec. 31, 2010 | ' | ' | ' | ' | ' | 214,379,914 | ' |
Balance (in shares) at Dec. 31, 2010 | ' | 130,586 | ' | ' | ' | ' | ' |
Balance, beginning of period (in shares) at Dec. 31, 2010 | ' | ' | ' | ' | ' | 154,728,267 | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Exercise of stock options | 5,889 | 2 | 5,887 | ' | ' | ' | ' |
Exercise of stock options (in shares) | ' | 1,536 | ' | ' | ' | ' | ' |
Share-based compensation expense | 2,816,637 | ' | 2,816,637 | ' | ' | ' | ' |
Net loss | 30,904,514 | ' | ' | ' | 30,904,514 | ' | ' |
Unrealized loss on investments | -3,606 | ' | ' | -3,606 | ' | ' | ' |
Balance at Dec. 31, 2011 | -238,604,689 | 133 | 12,007,007 | ' | -250,611,829 | ' | ' |
Balance (in shares) at Dec. 31, 2011 | ' | 132,122 | ' | ' | ' | ' | ' |
Balance, beginning of period at Dec. 31, 2011 | ' | ' | ' | ' | ' | 214,379,914 | ' |
Balance, beginning of period (in shares) at Dec. 31, 2011 | ' | ' | ' | ' | ' | 154,728,267 | ' |
Increase (decrease) in temporary equity | ' | ' | ' | ' | ' | ' | ' |
Conversion of Series E and E-2 convertible preferred stock to common stock | ' | ' | ' | ' | ' | -2,956,829 | ' |
Conversion of Series E and E-2 convertible preferred stock to common stock (in shares) | ' | ' | ' | ' | ' | -5,167,365 | ' |
Issuance of Series One convertible preferred stock, exchange of Series A-G convertible preferred stock for Series Two and Series Three convertible preferred stock | ' | ' | ' | ' | ' | -211,423,085 | 80,823,768 |
Issuance of Series One convertible preferred stock, exchange of Series A-G convertible preferred stock for Series Two and Series Three convertible preferred stock (in shares) | ' | ' | ' | ' | ' | -149,560,902 | 15,038,259 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Conversion of Series E and E-2 convertible preferred stock to common stock | 2,956,829 | 412 | 2,956,417 | ' | ' | ' | ' |
Conversion of Series E and E-2 convertible preferred stock to common stock (in shares) | ' | 413,223 | ' | ' | ' | ' | ' |
Issuance of Series One convertible preferred stock, exchange of Series A-G convertible preferred stock for Series Two and Series Three convertible preferred stock | 159,954,069 | ' | 159,954,069 | ' | ' | ' | ' |
Beneficial conversion charge | ' | ' | 377,787 | ' | -377,787 | ' | ' |
Share-based compensation expense | 2,288,392 | ' | 2,288,392 | ' | ' | ' | ' |
Net loss | -26,235,102 | ' | ' | ' | -26,235,102 | ' | ' |
Balance at Dec. 31, 2012 | -99,640,501 | 545 | 177,583,672 | ' | -277,224,718 | ' | ' |
Balance, end of period at Dec. 31, 2012 | ' | ' | ' | ' | ' | ' | $80,823,768 |
Balance (in shares) at Dec. 31, 2012 | ' | 545,345 | ' | ' | ' | ' | ' |
Balance, end of period (in shares) at Dec. 31, 2012 | ' | ' | ' | ' | ' | ' | 15,038,259 |
Statements_of_cash_flows
Statements of cash flows (USD $) | 12 Months Ended |
Dec. 31, 2011 | |
Cash flows from operating activities | ' |
Net income (loss) | $30,904,514 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ' |
Depreciation | 2,871,200 |
Change in valuation of warrant liability | -461,947 |
Noncash interest expense | 416,612 |
Share-based compensation expense | 2,816,637 |
Changes in operating assets and liabilities: | ' |
Prepaid expenses and other current assets | -1,355,123 |
Grant and collaboration receivables | 2,052,550 |
Deposits and other assets | 214,345 |
Accounts payable and accrued expenses | -3,159,711 |
Other long-term liabilities | -67,151 |
Deferred revenue | -54,998,713 |
Net cash used in operating activities | -20,766,787 |
Cash flows from investing activities | ' |
Purchases of fixed assets | -165,116 |
Purchases of investments | -2,019,163 |
Maturities of investments | 29,887,327 |
Net cash used in investing activities | 27,703,048 |
Cash flows from financing activities | ' |
Payments on long-term debt | -7,185,610 |
Proceeds from issuance of common stock | 5,889 |
Net cash provided by financing activities | -7,179,721 |
Net (decrease) increase in cash and cash equivalents | -243,460 |
Cash and cash equivalents, beginning of period | 28,674,870 |
Cash and cash equivalents, end of period | 28,431,410 |
Supplemental disclosure of cash information | ' |
Cash paid for interest | 2,486,682 |
Supplemental disclosures of noncash information related to investing and financing activities | ' |
Change in unrealized loss on investments | ($3,606) |
The_Company
The Company | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
The Company | ' | ' |
The Company | ' | ' |
1. The Company | 1. The Company | |
PTC Therapeutics, Inc. (the Company or PTC) was incorporated as a Delaware corporation on March 31, 1998. The Company is a biopharmaceutical company focused on the discovery and development of orally administered, proprietary small-molecule drugs that target post-transcriptional control processes. | PTC Therapeutics, Inc. (the Company or PTC) was incorporated as a Delaware corporation on March 31, 1998. The Company is a biopharmaceutical company focused on the discovery and development of orally administered, proprietary small-molecule drugs that target post-transcriptional control processes. | |
The Company has devoted substantially all of its efforts to research and development, including clinical trials. The Company has not completed development of any drugs. The Company has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from other companies. As of September 30, 2013, the Company had an accumulated deficit of approximately $310.9 million. The Company has financed its operations to date primarily through the issuance and sale of its common stock in its initial public offering (see note 7 below), private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by the Company's product candidates. The Company believes that its existing cash, cash equivalents, including the Company's net proceeds from its initial public offering of common stock, and marketable securities provide for sufficient resources to fund its currently planned operations through the fourth quarter of 2015. | The Company has devoted substantially all of its efforts to research and development, including clinical trials. The Company has not completed development of any drugs. The Company has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from other companies. As of December 31, 2012, the Company had an accumulated deficit of approximately $277.2 million. The Company has financed its operations to date primarily through private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support. The Company will need to obtain additional funding in connection with its ongoing operations. Additional financing may not be available to the Company. If the Company is unable to raise capital when needed or on attractive terms, the Company could be forced to delay, reduce or eliminate its research and development programs or any future commercialization efforts. As more fully described in Note 7, the Company completed a recapitalization of its outstanding convertible preferred stock in 2012 to enable the Company to raise additional capital. | |
Use of estimates | ||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Summary_of_significant_account
Summary of significant accounting policies | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Summary of significant accounting policies | ' | ' | ||
Summary of significant accounting policies | ' | ' | ||
2. Summary of significant accounting policies | 2. Summary of significant accounting policies | |||
The Company's complete listing of significant accounting policies are described in note 2 of the notes to the Company's audited financial statements as of December 31, 2012 included in the final prospectus dated June 19, 2013 related to the Company's initial public offering. | Unaudited pro forma presentation | |||
Unaudited pro forma presentation | Unaudited pro forma net income per share is computed using the weighted-average number of common shares outstanding after giving effect to the pro forma effect of the conversion of all convertible preferred stock during the year ended December 31, 2012 into shares of the Company's common stock as if such conversion had occurred at the beginning of the period presented. | |||
Unaudited pro forma net loss per share is computed using the weighted-average number of common shares outstanding after giving effect to the pro forma effect of the conversion of all convertible preferred stock during the period ended September 30, 2013 into shares of the Company's common stock as if such conversion had occurred at the beginning of the period presented. | Segment and geographic information | |||
Basis of presentation | Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment. | |||
The accompanying financial information as of September 30, 2013 and for the nine months ended September 30, 2012 and 2013 has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company's audited financial statements as of December 31, 2012 and notes thereto included in the final prospectus related to the Company's initial public offering. | Accounting changes | |||
In the opinion of management, the unaudited financial information as of September 30, 2013 and the nine months ended September 30, 2012 and 2013 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the nine month period ended September 30, 2013 is not necessarily indicative of the results to be expected for the year ended December 31, 2013 or for any other interim period or for any other future year. | Effective January 1, 2012, an update to an accounting standard was issued that requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update was applied retrospectively. The Company adopted this pronouncement and elected to present a separate statement of comprehensive income. The updated standard does not change the items that must be reported in comprehensive income, how such items are measure, or when they must be reclassified to net income. | |||
Use of estimates | Cash equivalents | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost which approximates fair value due to their short-term nature. | |||
Reverse stock split | Fixed assets | |||
On March 7, 2013, the Company effected a one-for-120 reverse stock split of its common stock, pursuant to which each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All common stock share and per share references in the financial statements and notes thereto have been restated to reflect the reverse stock split on a retroactive basis. | Fixed assets are stated at cost. Depreciation is computed starting when the asset is placed into service on a straight-line basis over the estimated useful life of the related asset as follows: | |||
Marketable securities | ||||
Management determines the classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Marketable securities are classified as available-for-sale and carried at fair value, with any unrealized gain or loss recorded as a separate component of stockholders' (deficit) equity. | Leasehold improvements | Lesser of useful life or lease term | ||
Computer equipment and software | 3 years | |||
Revenue recognition | Furniture, fixtures, and lab equipment | 3 to 7 years | ||
The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | ||||
Grant and collaboration receivables | ||||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | ||||
The Company records receivables in conjunction with grant and collaboration agreements when the services have been performed. The Company will record an allowance for bad debt if receivables are anticipated to be uncollectible. There is no indication that any receivables are uncollectible as of December 31, 2011 and 2012. Write-offs of receivables have historically been insignificant. | ||||
The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | ||||
Concentration of risks | ||||
For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | ||||
The Company has no significant off-balance-sheet risk or credit risk concentrations. The Company maintains its cash and cash equivalents with various financial institutions. The Company maintains cash accounts that may at times exceed the federally insured limit; however, it has not experienced and does not anticipate experiencing any credit losses from maintaining cash accounts in excess of such limits. | ||||
For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | ||||
The Company's revenues from its two largest collaboration partners and its largest grant as a percentage of total revenues were 85%, 8%, and 3%, respectively, for 2011 and were 67%, 11%, and 9%, respectively, for 2012. | ||||
The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from its activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. | ||||
Reverse stock split | ||||
The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | ||||
As a result of the one-for-120 reverse stock split that was effected on March 7, 2013, each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All references to common stock have been restated to reflect the reverse stock split on a retroactive basis. | ||||
Fair value of financial instruments | ||||
Deferred rent | ||||
The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | ||||
The Company has an operating lease for office space. Rent expense is recorded on a straight-line basis over the initial lease term. The difference between the actual cash paid and the straight-line rent expense is recorded as deferred rent. Leasehold improvements made related to this lease, subsequent to its inception, are amortized over the remaining lease term. | ||||
• | ||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | Revenue recognition | |||
• | The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | |||
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability | ||||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | ||||
(i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | ||||
The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | ||||
• | ||||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | |||
Cash equivalents are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables, accounts payable and accrued expenses, and debt approximates fair value due to the short-term nature of those instruments. | For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this new guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | |||
Warrant liability | The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. | |||
Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain (loss) on warrant valuation each reporting period in Other income (expense), net on the Company's statement of operations. | The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | |||
Share-based compensation | Research and development costs | |||
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. For service type awards, share-based compensation expense is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. For awards that vest or begin vesting upon achievement of a performance condition, the Company estimates the likelihood of satisfaction of the performance condition and recognizes compensation expense when achievement of the performance condition is deemed probable using an accelerated attribution model. | Research and development expenses include the clinical development costs associated with the Company's product development programs and research and development costs associated with the Company's discovery programs. These expenses include internal research and development costs and the costs of research and development conducted on behalf of the Company by third parties, including sponsored university-based research agreements and clinical study vendors. All research and development costs are expensed as incurred. Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses. | |||
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions, such as expected volatility and expected term. As a new public company, the Company does not have sufficient history to estimate the volatility of its common stock price or the expected life of the options. The Company calculates expected volatility based on reported data for similar publicly traded companies for which historical information is available and will continue to do so until the historical volatility of its common stock is sufficient to measure expected volatility for future option grants. | Nonrefundable advance payments made for goods and services that will be used in future research and development activities are deferred if the contracted party has not yet performed the related activities. The amount deferred is then recognized as expense when the research and development activities are performed. The Company has deferred research and development advance payments of approximately $245,000 and $228,000 as of December 31, 2011 and 2012, respectively. | |||
Fair value of financial instruments | ||||
The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establishes a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | ||||
• | ||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | ||||
• | ||||
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | ||||
• | ||||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | ||||
Cash equivalents and investments are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables and accounts payable and accrued expenses approximates fair value due to the short-term nature of those instruments. | ||||
Beneficial conversion | ||||
When the Company issues a debt or an equity security that is convertible into common stock at a discount from the fair value of the common stock at the date the debt or equity security counterparty is legally committed to purchase such a security (Commitment Date), a beneficial conversion charge is measured and recorded on the Commitment Date for the difference between the fair value of the Company's common stock and the effective conversion price of the convertible debt or equity security. If the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible debt or equity security, the amount of the discount assigned to the beneficial conversion feature is limited to the amount of the proceeds allocated to the convertible debt or equity security. | ||||
The amount allocated to the beneficial conversion feature is presented as a discount or reduction to the related debt security or as an immediate charge to earnings available to common shareholders for convertible preferred stock instruments that are convertible by the shareholders at any time. In connection with the Company's recapitalization of its outstanding convertible preferred stock in 2012, the Company recorded a beneficial conversion charge representing the difference between the effective conversion price and the fair value of the Company's common stock as of the Commitment Date. Because the intrinsic value was in excess of the proceeds allocated to the Company's new Series Three convertible preferred stock; the beneficial conversion charge was limited to the allocated proceeds of approximately $377,000. | ||||
Warrant liability | ||||
Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain/(loss) on warrant valuation each reporting period in Other income on the Company's statement of operations. | ||||
Impairment of long-lived assets | ||||
The Company monitors its long-lived assets for indicators of impairment. If such indicators are present, the Company assesses the recoverability of affected assets by determining whether the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found not to be recoverable, the Company measures the amount of such impairment by comparing the carrying value of the assets to the fair value of the assets, with the fair value generally determined based on the present value of the expected future cash flows associated with the assets. Although current and historical negative cash flows are indicators of impairment, management believes the future cash flows to be received from the long-lived assets and the potential success of the Company's research programs will exceed the assets' carrying value, and accordingly, the Company believes that no impairment of long-lived assets exists as of December 31, 2012. | ||||
Share-based compensation | ||||
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. | ||||
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions such as stock price, expected volatility and expected term. The Company's estimates of these assumptions are primarily based on third-party valuations, historical data, peer company data and judgment regarding future trends and factors. | ||||
The Company utilized various valuation methodologies in accordance with the framework of the 2004 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its stock. The methodologies included an option pricing method to estimate the Company's underlying equity value, and a methodology that determined an estimated value under an initial public offering (IPO) scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology includes estimates and assumptions that require the Company's judgment. These estimates include assumptions regarding future performance, including the completion of clinical trials and the time to complete an IPO or sale of the Company. As with any valuation, significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date. | ||||
Income taxes | ||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more likely than not that all or a portion of the net deferred tax assets will be realized. | ||||
Net income per share | ||||
Basic net income per share is calculated by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income per share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of convertible preferred stock and options outstanding under the Company's stock option plans. | ||||
Fair_value_of_financial_instru
Fair value of financial instruments and investments | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Fair value of financial instruments and marketable securities | ' | ' | |||||||||||||||||||||||
Fair value of financial instruments and investments | ' | ' | |||||||||||||||||||||||
3. Fair value of financial instruments and marketable securities | 3. Fair value of financial instruments and investments | ||||||||||||||||||||||||
Fair value of certain marketable securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. | Fair value of certain investments is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the year. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. | ||||||||||||||||||||||||
The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. | The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. As of December 31, 2011, the Company deemed its unrealized losses not to be other-than-temporary. | ||||||||||||||||||||||||
The following represents the fair value using the hierarchy described in Note 2 for the Company's financial assets that are required to be measured at fair value on a recurring basis as of December 31, 2012 and September 30, 2013: | The following represents the fair value using the hierarchy described in Note 2 for the Company's financial assets that are required to be measured at fair value on a recurring basis as of December 31, 2011 and 2012: | ||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Warrant liability | $ | 95,661 | $ | — | $ | — | $ | 95,661 | Warrant liability | $ | 1,878,316 | $— | $— | $1,878,316 | |||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Marketable securities | $ | 133,182,565 | $ | — | $ | 133,182,565 | $ | — | Warrant liability | $ | 95,661 | $— | $— | $95,661 | |||||||||||
Warrant liability | 98,819 | — | — | 98,819 | |||||||||||||||||||||
Level 3 valuation | |||||||||||||||||||||||||
The following is a summary of marketable securities accounted for as available-for-sale securities at September 30, 2013: | |||||||||||||||||||||||||
The warrant liability is classified in Other long-term liabilities on the Company's balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other income on the Company's statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. | |||||||||||||||||||||||||
The table presented below is a summary of changes in the fair value of the Company's Level 3 valuation for warrant liability for the years ended December 31, 2011 and 2012: | |||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||
Gross Unrealized | |||||||||||||||||||||||||
Amortized | Fair | ||||||||||||||||||||||||
Cost | Gains | Losses | Value | Level 3 assets | |||||||||||||||||||||
Commercial paper | $ | 24,978,703 | $ | 20,527 | $ | — | $ | 24,999,230 | Beginning balance January 1, 2011 | $ | 2,340,263 | ||||||||||||||
U.S. corporate debt securities | 108,244,329 | 19,642 | (80,636 | ) | 108,183,335 | Change in fair value of warrant liability | (461,947 | ) | |||||||||||||||||
$ | 133,223,032 | $ | 40,169 | $ | (80,636 | ) | $ | 133,182,565 | Ending balance as of December 31, 2011 | 1,878,316 | |||||||||||||||
Change in fair value of warrant liability | (1,782,655 | ) | |||||||||||||||||||||||
At September 30, 2013, the Company held securities with an unrealized loss position that were not considered to be other-than-temporarily impaired as the Company has the ability to hold such investments until recovery of their fair value. | Ending balance as of December 31, 2012 | $ | 95,661 | ||||||||||||||||||||||
Marketable securities on the balance sheet at September 30, 2013 mature as follows: | |||||||||||||||||||||||||
Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the preferred stock value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of December 31, 2011 include (i) volatility (88%), (ii) risk free interest rate (0.25%-1.62%), (iii) strike price ($7.26-$16.00), (iv) fair value of preferred shares ($16) and (v) expected life (2-8 years). The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of December 31, 2012 include (i) volatility (87%), (ii) risk free interest rate (0.16%-1.18%), (iii) strike price ($16), (iv) fair value of preferred shares ($2.35) and (v) expected life (1-7 years). The fair value of the preferred shares declined significantly due to the recapitalization of the Company's outstanding convertible preferred stock in June 2012 as described in Note 7. | |||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||
Less than | More than | ||||||||||||||||||||||||
12 Months | 12 Months | ||||||||||||||||||||||||
Commercial paper | $ | 24,999,230 | $ | — | |||||||||||||||||||||
U.S. corporate debt securities | 57,824,657 | 50,358,678 | |||||||||||||||||||||||
Total Marketable securities | $ | 82,823,887 | $ | 50,358,678 | |||||||||||||||||||||
There were no marketable securities as of December 31, 2012. | |||||||||||||||||||||||||
Level 3 valuation | |||||||||||||||||||||||||
The warrant liability is classified in Other long-term liabilities on the Company's balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other income (expense), net on the Company's statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. | |||||||||||||||||||||||||
The table presented below is a summary of changes in the fair value of the Company's Level 3 valuation for warrant liability for the period ended September 30, 2013: | |||||||||||||||||||||||||
Level 3 assets | |||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | $ | 95,661 | |||||||||||||||||||||||
Warrants issued in connection with convertible promissory notes | 6,000,000 | ||||||||||||||||||||||||
Deemed dividend | 18,248,768 | ||||||||||||||||||||||||
Exercise of warrants issued in connection with convertible promissory notes | (24,248,765 | ) | |||||||||||||||||||||||
Change in fair value of warrant liability | 3,155 | ||||||||||||||||||||||||
Ending balance as of September 30, 2013 | $ | 98,819 | |||||||||||||||||||||||
Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the stock fair value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of December 31, 2012 include (i) volatility (87%), (ii) risk free interest rate (0.16%-1.18%), (iii) strike price ($16), (iv) fair value of preferred shares ($2.35), and (v) expected life (1-7 years). The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of September 30, 2013 include (i) volatility (69-87%), (ii) risk free interest rate (0.02%-1.705%), (iii) strike price ($128), (iv) fair value of common shares ($21.46), and (v) expected life (.22-5.98 years). See Note 7 for a description of the warrants issued in connection with the convertible notes. | |||||||||||||||||||||||||
Fixed_assets
Fixed assets | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Fixed assets | ' | |||||||
Fixed assets | ' | |||||||
4. Fixed assets | ||||||||
Fixed assets, net were as follows at December 31, 2011 and 2012: | ||||||||
December 31, | ||||||||
2011 | 2012 | |||||||
Leasehold improvements | $ | 12,473,836 | $ | 12,473,836 | ||||
Computer equipment and software | 2,082,638 | 2,118,713 | ||||||
Furniture, fixtures, and lab equipment | 13,781,118 | 13,969,758 | ||||||
Assets not yet placed in service | 40,186 | 4,152 | ||||||
28,377,778 | 28,566,459 | |||||||
Less accumulated depreciation and amortization | (17,582,271 | ) | (20,286,422 | ) | ||||
$ | 10,795,507 | $ | 8,280,037 | |||||
Depreciation expense was approximately $2,871,000 and $2,704,000 for the years ended December 31, 2011 and 2012, respectively. | ||||||||
Accounts_payable_and_accrued_e
Accounts payable and accrued expenses | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Accounts payable and accrued expenses | ' | ' | ||||||||||||||
Accounts payable and accrued expenses | ' | ' | ||||||||||||||
5. Accounts payable and accrued expenses | 5. Accounts payable and accrued expenses | |||||||||||||||
Accounts payable and accrued expenses at December 31, 2012 and September 30, 2013 consist of the following: | Accounts payable and accrued expenses at December 31, 2011 and 2012 consist of the following: | |||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||
2012 | 2013 | 2011 | 2012 | |||||||||||||
Employee compensation, benefits, and related accruals | $ | 3,096,475 | $ | 3,659,084 | Employee compensation, benefits, and related accruals | $ | 3,492,170 | $ | 3,096,475 | |||||||
Consulting and contracted research | 2,515,678 | 3,556,350 | Consulting and contracted research | 6,749,272 | 2,515,678 | |||||||||||
Professional fees | 559,228 | 1,532,458 | Professional fees | 492,811 | 559,228 | |||||||||||
Accounts payable | 621,591 | 1,017,122 | Accounts payable | 1,878,109 | 621,591 | |||||||||||
Other | 230,999 | 440,479 | Other | 437,092 | 230,999 | |||||||||||
$ | 7,023,971 | $ | 10,205,493 | $ | 13,049,454 | $ | 7,023,971 | |||||||||
Longterm_debt
Long-term debt | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Debt | ' | ||||
Long-term debt | ' | ||||
6. Long-term debt | |||||
In May 2009, the Company entered into a capital lease for a laboratory instrument. This lease carries an implied interest rate of 8.2% and is payable in fixed monthly installments. As of December 31, 2011 and 2012, the Company had approximately $314,000 and $187,000 of remaining principal, respectively, which approximates the fair value. | |||||
In September 2009, the Company entered into a $25,000,000 secured debt facility with a syndicate of two lenders. In conjunction with entering into the debt facility, the Company issued warrants to purchase 62,500 shares of Series F-2 convertible preferred stock at an exercise price of $16.00 per share to the lenders. The warrants became exercisable in proportion to the amount of the facility borrowed. The fair value of the warrants was reflected as a discount to debt, and this discount is accreted to interest expense over the term of the debt facility. | |||||
The Company borrowed $12,500,000 under the facility in September 2009 and an additional $10,000,000 under the facility in December 2010 and issued the lenders promissory notes. The notes are secured by substantially all of the Company's assets except for intellectual property. The notes carry a fixed interest rate of 13.65% and required interest-only payments for the first five months, with principal repayment beginning in month six and continuing for 30 months. As of December 31, 2011 warrants to acquire 56,250 shares of Series F-2 were exercisable. In connection with the recapitalization of the Company's outstanding convertible preferred stock in 2012, these warrants were amended to be warrants to purchase Series Two convertible preferred stock. As of December 31, 2011 and 2012, the outstanding balance on the notes was $11,569,000 and $4,752,000, respectively. The carrying amount of the notes approximates their fair values based on the short maturity of the notes. | |||||
The debt facility has certain representations, warranties and affirmative covenants, as well as certain negative covenants restricting our activities, including limitations on dispositions, mergers or acquisitions, incurring indebtedness or liens, paying dividends or making investments and certain other business transactions. There are no financial covenants associated with the debt facility. | |||||
The debt facility contains certain events of default. The obligations under the debt facility and the other loan documents may at the lenders' option be accelerated upon the occurrence of certain events of default, and are automatically accelerated upon certain bankruptcy and insolvency related events of default. As of December 31, 2012, there were no events of default under the debt facility. | |||||
As of December 31, 2012, aggregate debt maturities are as follows: | |||||
2013 | $ | 4,499,442 | |||
2014 | 439,487 | ||||
Total debt at maturity value | 4,938,929 | ||||
Less unamortized discount | (55,948 | ) | |||
Total carrying value of debt | $ | 4,882,981 | |||
Capital_structure
Capital structure | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Capital structure | ' | ' | ||||||||||||||||||||
Capital structure | ' | ' | ||||||||||||||||||||
7. Capital structure | 7. Capital structure | |||||||||||||||||||||
2013 Recapitalization | Convertible preferred stock prior to 2012 recapitalization | |||||||||||||||||||||
During January and February of 2013, the Company entered into a "bridge" financing arrangement with certain existing investors providing for the issuance by the Company of an aggregate of $6 million of convertible promissory notes and warrants to purchase 2,527,675 shares of Series One convertible preferred stock (Series One) and Series Two convertible preferred stock (Series Two). The warrants have a per share exercise price of $0.01, and as such, they are referred to as "penny warrants". This bridge financing was closed in anticipation of the March 2013 Series Four financing event, which the Company refers to as the "2013 recapitalization". | As of December 31, 2011, the Company had authorized for issuance up to 156,995,095 shares of preferred stock, $0.001 par value. The authorized shares as of December 31, 2011 were designated as follows: 750,000 shares of Series A convertible preferred stock (Series A), 187,500 shares of Series B convertible preferred stock (Series B), 6,295,000 shares of Series C convertible preferred stock (Series C), 13,769,935 shares of Series D convertible preferred stock (Series D), 126,735,022 shares of Series E convertible preferred stock (Series E), 3,670,138 shares of Series E-2 convertible preferred stock (Series E-2), 675,000 shares of Series F convertible preferred stock (Series F), 1,612,500 shares of Series F-2 convertible preferred stock (Series F-2) and 3,300,000 shares of Series G convertible preferred stock (Series G). | |||||||||||||||||||||
The Company allocated the proceeds of the convertible promissory notes between debt and warrant liability. Since the value of the warrants exceeded the proceeds from the convertible notes issued to existing investors, the value of the warrant in excess of the proceeds is considered a deemed dividend and reflected as an equity transaction in the financial statements. The Company recorded $6 million to interest expense related to the debt discount associated with the convertible debt during the quarter ended March 31, 2013. | The rights and preferences of the shares of Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2 and Series G were as follows: | |||||||||||||||||||||
On March 7, 2013, the Company closed a private placement of a new series of convertible preferred stock that resulted in the 2013 recapitalization. In this private placement, the Company issued and sold an aggregate of 4,497,035 shares of its Series Four senior preferred stock (Series Four) for an aggregate purchase price of approximately $54 million. Including the $6 million raised with the bridge financing, total gross proceeds raised during the quarter ended March 31, 2013 was approximately $60 million. In addition, the Company issued an aggregate of 502,919 shares of Series Four upon the share settlement of the convertible promissory notes described above that were issued in January and February 2013. | Conversion—Each share of Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2 and Series G was convertible at any time at the option of the holder into such number of shares of common stock as determined by applying a conversion factor to the outstanding shares of approximately 0.0833, 0.1333, 0.1389, 0.1548, 0.0548, 1.0000, 1.0000, 1.0000 and 1.0000 for the Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2, and Series G respectively. These conversion factors were calculated based on the then-applicable conversion price with respect to each respective series of preferred stock. These conversion factors were subject to adjustment in the event the Company issued additional equity securities at prices below the then-applicable conversion price, or if the Company engaged in specified changes to its capitalization, such as stock splits or stock dividends. The conversion of each series of preferred stock would be automatic upon the closing of a qualified initial public offering or any other public offering upon the written election of the Company and holders of both (1) at least two thirds of the outstanding preferred shares on an as-converted to common stock basis and (2) at least two thirds of the Series F, F-2 and G shares voting together as a single class on an as-converted to common stock basis. | |||||||||||||||||||||
In connection with this private placement, the Company effected a one-for-120 reverse stock split of its common stock and an exchange of outstanding shares of Series One, Series Two and Series Three convertible preferred stock (Series Three) into an aggregate of 6,700,487 shares of a new series of Series Five junior preferred stock (Series Five). In addition, the Company issued an aggregate of 2,527,675 shares of Series One and Series Two upon the exercise of the warrants issued in connection with the bridge loan that were immediately exchanged for 2,095,515 shares of Series Five during the 2013 recapitalization. | Voting—Each preferred shareholder was entitled to the number of votes per share as if the preferred shares were converted to common stock. Additionally, the holders of the preferred stock, voting as a single class, were entitled to elect six members of the Board of Directors. | |||||||||||||||||||||
The Company accounted for the 2013 recapitalization as an extinguishment of its Series One, Series Two and Series Three convertible preferred stock and recorded the Series Five shares at their fair value as of the recapitalization date. In accordance with authoritative accounting guidance, the Company recorded a gain attributable to the common stockholders on the extinguishment of the Series One, Series Two and Series Three. The gain of approximately $3.4 million represents the excess of the Series One, Series Two and Series Three over the fair value of the shares Series Five issued in connection with the recapitalization. | Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, holders of preferred stock were entitled to receive, before any distribution or payment on the common stock, an amount equal to $1.00 per share for Series A, $2.00 per share for Series B, $2.50 per share for Series C, $3.25 per share for Series D, $0.397644 per share for Series E, $7.26 per share for Series E-2, $16.00 per share for Series F, $16.00 per share for Series F-2, and $16.00 per share for Series G, plus all declared, but unpaid, dividends. As of December 31, 2011, the aggregate liquidation preference was $750,000, $375,000, $15,000,000, $42,561,249, $49,999,998, $26,645,187, $10,000,000, $24,248,048, and $50,300,000 for the Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2, and Series G, respectively. In cases where the liquidation preference applied, if there were insufficient funds to pay the full preference value to all holders, then, as a group, the holders of the Series E, Series E-2, Series F, Series F-2, and Series G would have been paid together first, ratably, in proportion to their respective liquidation preferences. To the extent there were excess assets to distribute, the holders of the Series D would have been paid second. Finally, as a group, the holders of the Series A, Series B, and Series C would have been paid last, ratably, in proportion to their respective liquidation preferences. Dividends were payable only if and when declared. The Company has not declared any dividends through December 31, 2012. | |||||||||||||||||||||
Valuation—The value of the Company was estimated using the PWERM. The PWERM considered the most significant near-term driver of value for the Company as the Company's ability to complete a Phase 3 clinical trial of ataluren for the treatment of Duchenne muscular dystrophy caused by nonsense mutations (nmDMD). The remaining scenarios in the PWERM related to funding the completion of the Phase 3 clinical trial for nmDMD. The path to raising this money made up the remaining nodes in the PWERM. | Recapitalization | |||||||||||||||||||||
After identifying the various potential liquidity scenarios and their likely timing, a pre-money enterprise value was assigned to each scenario based on a combination of management's guidance and recent trends in the capital markets. The resulting enterprise value for each liquidity event was divided by the total shares that would be outstanding under each scenario to arrive at a price per share for the common and preferred classes of stock. Each scenario was then assigned an outcome probability based on management's estimates. The resulting probability weighted share values were then discounted to present value at a rate that reflects general industry risks (but not Company specific risks). | In July 2012, the Company completed a recapitalization pursuant to which all outstanding shares of Series A, B, C, D, E, E-2, F, F-2, and G convertible preferred stock (Prior Series Preferred) were exchanged into Series Three convertible preferred stock (Series Three). Warrants to acquire Prior Series Preferred became warrants to acquire Series Two convertible preferred stock (Series Two). In addition, those investors that elected to participate in the sale of Series One convertible preferred stock (Series One) were entitled to exchange their Series Three shares for Series Two shares. | |||||||||||||||||||||
The rights and preferences of the shares of Series Four and Series Five are as follows: | In connection with the recapitalization, the Company sold 1,483,337 shares of Series One for aggregate gross proceeds of approximately $29.7 million. | |||||||||||||||||||||
Dividends—The holders of Series Four and Series Five, in preference to the holders of common stock, are entitled to noncumulative dividends when and if declared by the Board of Directors. | The Company accounted for the recapitalization as an extinguishment of its Prior Series Preferred and recorded the Series One, Series Two and Series Three shares at their fair value as of the recapitalization date. In accordance with authoritative accounting guidance, the Company recorded a gain attributable to the common stockholders on the extinguishment of the Prior Series Preferred. The gain of approximately $160 million represents the excess of the carrying amount of Prior Series Preferred stock immediately prior to the recapitalization over the fair value of the Series One, Two and Three stock issued in connection with the recapitalization. | |||||||||||||||||||||
Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, the holders of Series Four will be entitled to receive, before any distribution or payment is made to any other class of security, an amount equal to the original issuance price, plus all declared, but unpaid, dividends. To the extent there are excess assets to distribute, the holders of Series Five will be entitled to receive, before any distribution or payment is made to the holders of the common stock, an amount equal to the stated liquidation preference, plus all declared, but unpaid, dividends. To the extent there are remaining assets to distribute, the holders of common stock will be entitled to receive such remaining assets. | Valuation—The value of the Company was estimated using the probability weighted expected return method (PWERM). The PWERM considered the most significant near-term driver of value for the Company as the ability to file a marketing authorization application (MAA) with The European Medicines Agency (EMA) for conditional approval of ataluren. The Company has initiated a confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. If favorable, the results of the confirmatory Phase 3 clinical trial could serve as the basis for full approval by the EMA and the FDA of ataluren for the treatment of nmDMD in the European Union and the United States. The remaining scenarios in the PWERM related to funding the completion of the confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. | |||||||||||||||||||||
Voting—Each holder of Series Four and Series Five are entitled to cast the number of votes into which such holder's shares would convert. Except as required by law, holders of common stock have limited voting rights. Additionally, except as required by law, and except in certain enumerated circumstances, holders of Series Four and Series Five shall vote together with the holders of common stock as a single class. | After identifying the various potential liquidity scenarios and their likely timing, a pre-money enterprise value was assigned to each scenario based on a combination of management's guidance and recent trends in the capital markets. The resulting enterprise value for each liquidity event was divided by the total shares that would be outstanding under each scenario to arrive at a price per share for the common and preferred classes of stock. Each scenario was then assigned an outcome probability based on management's estimates. The resulting probability weighted share values were then discounted to present value at a rate that reflects general industry risks (but not Company specific risks). | |||||||||||||||||||||
Conversion—Each share of Series Four and Series Five is convertible at any time at the option of the holder into one share of common stock. These conversion ratios are subject to adjustment for certain dilutive events, including certain types of stock splits or stock dividends or future recapitalizations. | The rights and preferences of the shares of Series One, Two and Three are as follows: | |||||||||||||||||||||
In May 2013, the Company issued and sold an additional 375,000 shares of Series Four, at a price per share of $12.00, for an aggregate purchase price of $4.5 million. | Dividends—The holders of Series One and Series Two, in preference to the holders of common stock, are entitled to noncumulative dividends when and if declared by the Board of Directors. The holders of Series Three are not entitled to dividends. The Company has not declared any dividends through December 31, 2012. | |||||||||||||||||||||
Common stock | Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, the holders of Series One will be entitled to receive, before any distribution or payment is made to any other class of security, an amount equal to two times the original issuance price, plus all declared, but unpaid, dividends. To the extent there are excess assets to distribute, the holders of Series Two will be entitled to receive 76.47% of such excess assets, and the holders of Series One will be entitled to receive 23.53% of such excess assets, until the holders of Series Two receive an amount equal to one times the stated liquidation preference amount for the Series Two, plus all declared, but unpaid, dividends. In the event there are remaining assets after Series Two distributions, the holders of Series Three are entitled to receive 8.82% of such remaining assets, and the holders of Series One and Series Two will be entitled to receive 23.53% and 67.65%, respectively, of such remaining assets, until the holders of Series Three receive an amount equal to one times the stated liquidation preference amount for the Series Three, plus all declared, but unpaid, dividends. To the extent there are remaining assets to distribute, the holders of Series One, Series Two, and Series Three will be entitled to receive 20%, 55%, and 25% of such remaining assets, respectively. | |||||||||||||||||||||
In May 2013, the Company's Board of Directors and stockholders approved an amendment to the Company's certificate of incorporation increasing the number of authorized shares of common stock to 125,000,000. | Voting—Each holder of Series One is entitled to cast the number of votes equal to five times the number of common shares into which such holder's shares of Series One would convert. Except as required by law, holders of Series Two and Series Three have limited voting rights. Additionally, the holders of Series One, voting as a single class, are entitled to elect twelve members of the Board of Directors. | |||||||||||||||||||||
Initial public offering | Conversion—Each share of Series One is convertible at any time at the option of the holder into two shares of common stock. Each share of Series Two and Series Three is convertible at any time at the option of the holder into one share of common stock. These conversion ratios are subject to adjustment for certain dilutive events, including certain types of stock splits or stock dividends or future recapitalizations. | |||||||||||||||||||||
In June 2013, the Company closed the initial public offering of its common stock pursuant to a registration statement on Form S-1, as amended. The Company issued and sold an aggregate of 9,627,800 shares of common stock under the registration statement at a public offering price of $15.00 per share, including 1,255,800 shares pursuant to the exercise by the underwriters of an over-allotment option. The Company received net proceeds from the initial public offering of approximately $131.6 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. | Warrants | |||||||||||||||||||||
Upon closing the initial public offering, all outstanding shares of the Series Four and Series Five were converted into 14,170,956 shares of common stock. | All of the Company's outstanding warrants are classified as liabilities as of December 31, 2011 and 2012 because they contain either non-standard antidilution provisions or they are exercisable into preferred shares that include a put feature. | |||||||||||||||||||||
Warrants | The following is a summary of the Company's outstanding warrants as of December 31, 2011: | |||||||||||||||||||||
All of the Company's outstanding warrants were classified as liabilities as of December 31, 2012 because they contained either non-standard antidilution provisions or they were exercisable into preferred shares that included a put feature. | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | Warrant | Exercise | Expiration | |||||||||||||||||||
shares | price | |||||||||||||||||||||
Series E convertible preferred stock | 54,465 | $ | 7.26 | 2014 | ||||||||||||||||||
Warrant | Exercise | Expiration | Series F convertible preferred stock | 50,000 | $ | 16 | 2017 | |||||||||||||||
shares | price | Series F-2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | ||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Series Two | 24,712 | $ | 16 | 2014 | ||||||||||||||||||
Series Two | 50,000 | $ | 16 | 2017 | ||||||||||||||||||
Series Two | 56,250 | $ | 16 | 2019 and 2020 | In connection with the recapitalization, all of the Series E, F, and F-2 outstanding warrants became warrants to purchase Series Two. | |||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | ||||||||||||||||||||||
In connection with the 2013 recapitalization, all of the Series Two outstanding warrants became warrants to purchase Series Five. In connection with the Company's initial public offering all of the Series Five outstanding warrants became warrants to purchase common stock. | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of September 30, 2013: | Warrant | Exercise | Expiration | |||||||||||||||||||
shares | price | |||||||||||||||||||||
Series 2 convertible preferred stock | 24,712 | $ | 16 | 2014 | ||||||||||||||||||
Warrant | Exercise | Expiration | Series 2 convertible preferred stock | 50,000 | $ | 16 | 2017 | |||||||||||||||
shares | price | Series 2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | ||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Common stock | 3,088 | $ | 128 | 2014 | ||||||||||||||||||
Common stock | 6,250 | $ | 128 | 2017 | ||||||||||||||||||
Common stock | 7,030 | $ | 128 | 2019 and 2020 | ||||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Earnings_per_share
Earnings per share | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Net income (loss) per share | ' | ' | ||||||||||||||
Earnings per share | ' | ' | ||||||||||||||
8. Net income (loss) per share | 8. Earnings per share | |||||||||||||||
Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. | Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. | |||||||||||||||
The Series One, Series Two and Series Three outstanding during 2012 (subsequent to the recapitalization) participated in the earnings of the Company through dividend rights. Accordingly, the Company measured earnings per share based upon the two-class method prior to the Company's initial public offering in June 2013. | The Prior Series Preferred outstanding in 2011 and 2012 (through the date of the recapitalization) as well as Series One and Series Two outstanding during 2012 (subsequent to the recapitalization) participate in earnings of the Company through dividend rights. Accordingly, the Company measures earnings per share based upon the two-class method. Net income attributable to common stockholders excludes $30,878,445 and $132,609,918 for the years ended 2011 and 2012, respectively, for net income attributable to participating securities. | |||||||||||||||
The following tables set forth the computation of basic and diluted net income (loss) per share for common stockholders: | The diluted earnings per share for the years ended December 31, 2011 and 2012 exclude the impact of approximately 1.3 million and 0.6 million common stock equivalents, respectively, since the effect of including these securities would be anti-dilutive. | |||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share for common stockholders: | ||||||||||||||||
Nine months ended | Net income per share | |||||||||||||||
September 30, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Numerator | Year ended December 31 | |||||||||||||||
Net loss | $ | (19,963,058 | ) | $ | (33,687,612 | ) | 2011 | 2012 | ||||||||
Deemed dividend | — | (18,248,768 | ) | |||||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 159,954,069 | 3,390,750 | Numerator | |||||||||||||
Less beneficial conversion charge | (377,787 | ) | — | Net income (loss) | $ | 30,904,514 | $ | (26,235,102 | ) | |||||||
Less net income attributable to participating securities | (139,077,495 | ) | — | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | ||||||||||
Less beneficial conversion charge | — | (377,787 | ) | |||||||||||||
Net income (loss) attributable to common stockholders | $ | 535,729 | $ | (48,545,630 | ) | Less net income attributable to participating preferred stock | (30,878,445 | ) | (132,609,918 | ) | ||||||
Denominator | Net income attributable to common stockholders | $ | 26,069 | $ | 731,262 | |||||||||||
Denominator for basic net income (loss) per share | 2,937 | 8,995,167 | ||||||||||||||
Effect of dilutive securities | Denominator | |||||||||||||||
Series Three convertible preferred stock | 10,656 | — | Denominator for basic earnings per share | 1,089 | 3,328 | |||||||||||
Effect of dilutive securities: | ||||||||||||||||
Denominator for diluted net income (loss) per share | 13,593 | 8,995,167 | Employee stock options | 4,640 | — | |||||||||||
Series 3 convertible preferred stock | — | 13,877 | ||||||||||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 182.41 | $ | (5.40 | )* | Denominator for diluted earnings per share | 5,729 | 17,205 | ||||||||
Diluted | $ | 39.41 | $ | (5.40 | )* | Net income per share: | ||||||||||
Basic | 23.95 | 219.76 | ||||||||||||||
* In the nine months ended September 30, 2013, the Company experienced a net loss and therefore did not report any dilutive share impact. | Diluted | 4.55 | 42.5 | |||||||||||||
The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period. | ||||||||||||||||
As of September 30, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Stock Options | 44,218 | 1,987,860 | ||||||||||||||
Unvested restricted stock | — | 1,113,807 | ||||||||||||||
Total | 44,218 | 3,101,667 | ||||||||||||||
Stock_option_plan
Stock option plan | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||
Stock option plan | ' | ' | |||||||||||||||||||||||||||
Stock option plan | ' | ' | |||||||||||||||||||||||||||
9. Stock option plan | 9. Stock option plan | ||||||||||||||||||||||||||||
On March 5, 2013, the Company's Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. | In 2009, the Company's shareholders approved the 2009 Equity and Long-Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards, subject to certain adjustments and annual increases. As of December 31, 2012, awards for 14,271 shares of common stock are available for issuance. | ||||||||||||||||||||||||||||
In May 2013, the Company's Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Stock Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. | The Board of Directors has the authority to select the individuals to whom options are granted and determine the terms of each option, including (i) the number of shares of common stock subject to the option; (ii) the date on which the option becomes exercisable; (iii) the option exercise price, which, in the case of incentive stock options, must be at least 100% (110% in the case of incentive stock options granted to a stockholder owning in excess of 10% of the Company's stock) of the fair market value of the common stock as of the date of grant; and (iv) the duration of the option (which, in the case of incentive stock options, may not exceed ten years). Options typically vest over a three- or four-year period. | ||||||||||||||||||||||||||||
In May 2013, the Company's Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company's IPO. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 122,296 shares of common stock available for issuance under the Company's 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company's 1998 Employee, Director and Consultant Stock Option Plan and 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company's Board of Directors. | A summary of stock option activity is as follows: | ||||||||||||||||||||||||||||
A summary of stock option activity is as follows: | |||||||||||||||||||||||||||||
Number of | Exercise | Weighted- | Weighted- | Aggregate | |||||||||||||||||||||||||
options | price | average | average | intrinsic | |||||||||||||||||||||||||
(in thousands) | Number of | Exercise price | Weighted- | Weighted- | Aggregate | exercise | remaining | value | |||||||||||||||||||||
options | average | average | intrinsic | price | contractual | ||||||||||||||||||||||||
exercise | remaining | value | term | ||||||||||||||||||||||||||
price | contractual | ||||||||||||||||||||||||||||
term | Outstanding at December 31, 2010 | 39,557 | $226.80-$1,149.60 | $ | 547.2 | ||||||||||||||||||||||||
Granted | 8,123 | $490.80 | $ | 490.8 | |||||||||||||||||||||||||
Exercised | (11 | ) | $451.20-$508.80 | $ | 459.6 | ||||||||||||||||||||||||
Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 469.48 | Forfeited | (875 | ) | $226.80-$1,149.60 | $ | 757.2 | |||||||||||||||||||
Granted | 2,007,713 | $10.59-$10.85 | $ | 10.85 | |||||||||||||||||||||||||
Exercised | — | — | — | Outstanding at December 31, 2011 | 46,794 | $226.80-$1,149.60 | $ | 532.8 | 5.74 years | ||||||||||||||||||||
Forfeited | (62,247 | ) | $10.85-$1,149.60 | $ | 17.1 | Granted | 5,715 | $218.40 | $ | 218.4 | |||||||||||||||||||
Exercised | — | ||||||||||||||||||||||||||||
Outstanding at September 30, 2013 | 1,987,860 | $10.59-$1,149.60 | $ | 20.44 | 9.51 years | $ | 20,652 | Forfeited | (10,115 | ) | $218.40-$1,149.60 | $ | 604.8 | ||||||||||||||||
Exercisable at September 30, 2013 | 61,834 | $10.59-$1,149.60 | $ | 290.39 | 6.06 years | $ | 265 | Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 474 | 5.02 years | — | |||||||||||||||
Exercisable at December 31, 2012 | 33,414 | $218.40-$1,149.60 | $ | 482.4 | 4.14 years | — | |||||||||||||||||||||||
The fair value of grants made in the period ended September 30, 2013 was contemporaneously estimated on the date of grant using the following assumptions: | |||||||||||||||||||||||||||||
Exercisable and expected to vest at December 31, 2012 | 42,184 | $218.40-$1,149.60 | $ | 476.4 | 4.97 years | — | |||||||||||||||||||||||
Nine months ended | The fair value of grants made in the years ended December 31, 2011 and 2012 was contemporaneously estimated on the date of grant using the following assumptions: | ||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||
Risk-free interest rate | 0.85%-1.69% | ||||||||||||||||||||||||||||
Expected volatility | 87%-88% | 2011 | 2012 | ||||||||||||||||||||||||||
Expected term | 5.00 to 6.00 years | ||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | Risk-free interest rate | 2.40% | 1.14% | |||||||||||||||||||||||||
Expected volatility | 87% | 87% | |||||||||||||||||||||||||||
Expected term | 6.00-6.25 years | 6.00-6.25 years | |||||||||||||||||||||||||||
The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the nine month period ended September 30, 2013 was $7.86 per share. | |||||||||||||||||||||||||||||
The Company uses the "simplified method" to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. | The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the years ended December 31, 2011 and 2012 was $364.80 and $160.65, respectively. | ||||||||||||||||||||||||||||
Restricted stock awards—Restricted stock awards are granted subject to certain restrictions, including in some cases service conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company's shares on the grant date, is expensed over the vesting period. | The Company uses the "simplified method" to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. | ||||||||||||||||||||||||||||
The following table summarizes information on the Company's restricted stock: | The Company recognized approximately $2,817,000 and $2,288,000 of share-based compensation expense, during the years ended December 31, 2011 and 2012, respectively. The Company utilizes newly issued shares to satisfy stock option exercises. | ||||||||||||||||||||||||||||
As of December 31, 2011 and 2012, there was approximately $4,005,000 and $2,213,000, respectively of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 1998 and 2009 Plan. This cost is expected to be recognized as compensation expense over the weighted average remaining service period of approximately 2.14 years. | |||||||||||||||||||||||||||||
Restricted stock | |||||||||||||||||||||||||||||
Number of | Weighted | ||||||||||||||||||||||||||||
shares | average grant | ||||||||||||||||||||||||||||
date fair value | |||||||||||||||||||||||||||||
January 1, 2013 | — | — | |||||||||||||||||||||||||||
Granted | 1,131,524 | $ | 10.68 | ||||||||||||||||||||||||||
Vested | — | $ | — | ||||||||||||||||||||||||||
Forfeited | (17,717 | ) | $ | 10.63 | |||||||||||||||||||||||||
Unvested at September 30, 2013 | 1,113,807 | $ | 10.68 | ||||||||||||||||||||||||||
The Company recorded share-based compensation expense in the statement of operations as follows: | |||||||||||||||||||||||||||||
Nine months ended | |||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||||||
Research and development | $ | 653,462 | $ | 1,377,640 | |||||||||||||||||||||||||
General and administrative | 1,162,260 | 3,764,547 | |||||||||||||||||||||||||||
Total | $ | 1,815,722 | $ | 5,142,187 | |||||||||||||||||||||||||
As of December 31, 2012 and September 30, 2013, there was approximately $2.2 million and $21.0 million, respectively of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 1998, 2009 and 2013 Plans. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 2.28 years. | |||||||||||||||||||||||||||||
Collaborations_and_grants
Collaborations and grants | 12 Months Ended |
Dec. 31, 2012 | |
Collaborations and grants | ' |
Collaborations and grants | ' |
10. Collaborations and grants | |
The Company has ongoing collaborations with the Spinal Muscular Atrophy Foundation (SMA Foundation) and F. Hoffman-La Roche Ltd and Hoffman-La Roche Inc. (collectively, Roche) and early stage discovery arrangements with other institutions. During 2011, the Genzyme collaboration was modified and later terminated. The following are the key terms to the Company's (i) terminated collaboration with Genzyme, (ii) ongoing collaborations and (iii) early stage discovery and development arrangements. | |
Terminated collaboration | |
Genzyme | |
In July 2008, Genzyme Corporation (now a Sanofi company) and the Company entered into an exclusive global collaboration to develop and commercialize ataluren, the Company's novel oral therapy in late-stage development for the treatment of genetic disorders due to nonsense mutations. Under the terms of this agreement, the Company granted Genzyme rights to commercialize ataluren in all countries except the United States and Canada, which rights the Company retained. Genzyme made a nonrefundable upfront payment to the Company of $100,000,000 in July 2008, which was being recognized over the Company's estimated period of performance under the arrangement. | |
In August 2011, the Company and Genzyme announced a restructuring of the agreement. Under the terms of the restructuring, the Company regained worldwide rights to ataluren and Genzyme made an additional payment of $7.5 million to the Company in exchange for an option to commercialize ataluren in indications other than nonsense mutation Duchenne muscular dystrophy (nmDMD) outside the United States and Canada. On March 27, 2012, the Company received notification that Genzyme declined to exercise the option, at which time the option expired. As a result, the collaboration was terminated. | |
The Company evaluated the August 2011 restructuring of the Genzyme collaboration agreement and determined it to be a material modification to the original agreement for financial reporting purposes pursuant to the revised multiple element revenue recognition guidance. The Company determined that given the significance of the changes in relation to the initial arrangement, including the decrease in the total consideration that could be paid to the Company, the significant removal of existing deliverables, the significant changes in the intellectual property rights and the significant change in the performance period, the initial arrangement had been effectively terminated. The Company elected to reevaluate the amended agreement and performed an analysis to calculate the estimated selling price of the undelivered elements of the arrangement. Based on this analysis, the Company determined that the undelivered element had an estimated selling price of $8.8 million, and as such, adjusted the Company's deferred revenue balance to reflect this amount as of the contract amendment date. The Company amortized the balance through the option period. The effect of this reevaluation was to recognize approximately $79 million as of the restructuring date. For the years ended December 31, 2011 and 2012, the Company recognized approximately $90,012,000 and $3,756,000, respectively, in collaboration revenue from Genzyme. | |
Current collaboration | |
Roche and SMA Foundation | |
In November 2011, the Company and the SMA Foundation entered into a licensing and collaboration agreement with Roche for a spinal muscular atrophy program. Under the terms of the agreement, Roche acquired an exclusive worldwide license to the Company's spinal muscular atrophy program, which includes three compounds currently in preclinical development, as well as potential back-up compounds. The Company received a nonrefundable upfront cash payment of $30,000,000 and Roche agreed to provide funding for research activities performed on its behalf. | |
The Company applied the revised multiple element revenue recognition guidance in evaluating the accounting treatment of this collaboration agreement. The Company identified two possible significant deliverables in the collaboration agreement, the license and the research activities. The Company evaluated whether these significant deliverables have stand alone value and determined that the license does not have standalone value without the ongoing research and development services given the unique nature of the technology. As such, both of these elements were combined as a single unit for accounting purposes. As a result, the Company deferred the $30,000,000 upfront payment which is being recognized over the estimated performance period of two years, which is the contracted research period. For the year ended December 31, 2011 and 2012, the Company recognized approximately $2,072,000 and $18,405,000, respectively, in collaboration revenue. The balance of the remaining deferred upfront payment was approximately $13,417,000 at December 31, 2012. | |
Under the agreement, the Company is eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135 million in research and development event milestones, up to $325 million in sales milestones upon achievement of sales events, and up to double digit royalties on worldwide annual net sales of a commercial product. | |
The Company considers that each of the potential milestone events under the agreement would be substantive because the applicable criteria of its revenue recognition policy (see Note 2) would be satisfied. | |
Early stage collaboration and discovery agreements | |
The Company has arrangements with several organizations pursuant to which the Company uses its discovery technologies to help identify potential drug candidates. The Company does not take ownership of the potential compounds, but rather provides research services to the collaborator using its specialized technology platform. | |
Generally, these arrangements are structured such that the collaborator and the Company work together to jointly select targets from which to apply its discovery technologies. The research period for the Company to apply its technology is generally three to four years. The Company will typically receive a nonrefundable, upfront cash payment and the collaborator agrees to provide funding for research activities performed on its behalf. | |
For those arrangements entered into or significantly modified after January 1, 2011, the Company applies the revised multiple element revenue recognition guidance in evaluating the accounting treatment for these arrangements. Generally, the two significant deliverables in these arrangements are the license and the research activities. The Company evaluates whether the deliverables have standalone value. However, since the Company's discovery technologies are highly specialized, the Company has determined that the license does not have standalone value without the ongoing research and development services and accounts for these arrangements as a single unit of accounting. | |
As a result, the Company has deferred revenue of $7,232,000 and $3,032,000 as of December 31, 2011 and 2012, respectively, related to these arrangements. For the years ended December 31, 2011 and 2012, the Company recognized approximately $6,878,000 and $6,618,000 in collaboration revenue, respectively. | |
The Company is eligible to receive additional payments from its early stage discovery research arrangements if the discovery compounds are ultimately developed and commercialized. The aggregate potential payments the Company is eligible for if all products are developed is $143 million and up to $252 million in sales milestones upon achievement of specified sales events and up to double digit royalties on worldwide annual net sales of the licensed product. | |
The Company considers that each of the potential milestone events under the agreement would be substantive because the applicable criteria of its revenue recognition policy (see Note 2) would be satisfied. | |
Grant revenue | |
The company receives grant funding from various institutions and governmental bodies. The grants are typically for early discovery research, and typically the grant program lasts from two to five years. The Company records revenue as the research activities are performed. If the granting agency provides for an upfront payment, the amount is deferred and recognized as revenue as the expenditures are incurred. | |
Income_taxes
Income taxes | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Income taxes | ' | |||||||
Income taxes | ' | |||||||
11. Income taxes | ||||||||
A reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as follows: | ||||||||
December 31 | ||||||||
2011 | 2012 | |||||||
Federal income tax (benefit) at statutory rate | 34.00% | 34.00% | ||||||
State income tax benefit, net of federal benefit | 4.2 | 3.8 | ||||||
Other | (1.60 | ) | (2.00 | ) | ||||
Increase to valuation allowance | (45.90 | ) | (35.80 | ) | ||||
Effective income tax rate | (9.3 | ) | 0.00% | |||||
The Company recognized a tax benefit of $2.3 million in connection with the sale of net operating losses and research and development credits in the New Jersey Transfer Program for the year ended December 31, 2011. The significant components of the Company's deferred tax assets and liabilities at December 31, 2011 and 2012 are as follows: | ||||||||
2011 | 2012 | |||||||
Deferred tax assets: | ||||||||
Amortization | $ | 103,355 | $ | 91,871 | ||||
Depreciation | 1,196,569 | 1,535,952 | ||||||
Accrued expense | 321,925 | 1,208,846 | ||||||
Deferred revenue | 15,738,180 | 6,962,506 | ||||||
Federal tax credits | 5,734,074 | 5,383,092 | ||||||
State tax credits | 1,495,773 | 1,094,833 | ||||||
Federal net operating losses | 56,074,019 | 71,752,278 | ||||||
State net operating losses | 5,024,189 | 7,619,606 | ||||||
Capitalized research and development costs | 11,184,849 | 10,479,055 | ||||||
Other | 600,059 | 742,341 | ||||||
Total gross deferred tax assets | 97,472,992 | 106,870,380 | ||||||
Less valuation allowance | (97,472,992 | ) | (106,870,380 | ) | ||||
Net deferred tax assets | $ | — | $ | — | ||||
At December 31, 2011 and 2012, the Company recorded a full valuation allowance against its net deferred tax assets of approximately $97,473,000 and $106,870,000, respectively. The change in the valuation allowance during the years ended December 31, 2011 and 2012 was approximately $12,909,000 and $9,397,000, respectively. A full valuation allowance has been recorded since, in the judgment of management, these assets are not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences and carryforwards become deductible or are utilized. | ||||||||
As of December 31, 2012, the Company has approximately $211,036,000 and $128,276,000 of federal and state net operating loss carryforwards, respectively. As of December 31, 2012, credit carryforwards for federal and state purposes are approximately $5,383,000 and $1,546,000, respectively. The federal net operating loss carryforwards begin to expire in 2021, while the federal credit carryforwards begin to expire in 2013. State net operating loss carryforwards begin to expire in 2029, and the state credit carryforwards begin to expire in 2022. Sections 382 and 383 of the Internal Revenue Code of 1986 subject the future utilization of net operating losses and certain other tax attributes, such as research and experimental tax credits, to an annual limitation in the event of certain ownership changes, as defined. The Company has had a number of equity transactions since inception, and several of these have created ownership changes that could create such a limitation. The Company has not recently performed an analysis to determine the Company's ability to utilize such carryforwards prior to expiration. An analysis will be performed in the future, as necessary. | ||||||||
The State of New Jersey provides the Technology Business Tax Certificate Transfer Program enabling approved unprofitable biotechnology businesses to sell their unused net operating loss carryforwards to unaffiliated, profitable corporate taxpayers in the State of New Jersey for cash. The Company has participated in this program and sold state net operating losses totaling $28,463,900 during 2011. The New Jersey net operating losses sold during 2011 were generated during 2009. For 2011, the Company established a receivable for the $2,305,576, which was received in 2012. | ||||||||
The income tax benefit for the years ended December 31, 2011 and 2012 differed from the amounts computed by applying the U.S. federal income tax rate of 34% to loss before tax benefit as a result of non-deductible expenses, tax credits generated, utilization of net operating loss carryforwards and increases in the Company's valuation allowance. At December 31, 2012 the Company had no unrecognized income tax benefits. The Company applies the accounting guidance for uncertain income tax provisions. This guidance clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As of December 31, 2012, the Company did not have any unrecognized tax benefits and has not accrued any interest or penalties through 2012. The Company does not expect to have any unrecognized tax benefits within the next twelve months. The Company's policy is to recognize interest and penalties related to tax matters within the income tax provision. Tax years beginning in 2009 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. | ||||||||
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Commitments and contingencies | ' | ||||
Commitments and contingencies | ' | ||||
12. Commitments and contingencies | |||||
Operating leases | |||||
The Company leases office space under a noncancelable operating lease through February 2019. Rent expense was approximately $735,000 and $739,000 for the years ended December 31, 2011 and 2012, respectively. The Company also leases certain office equipment under operating leases. Future minimum lease payments as of December 31, 2012 are as follows: | |||||
2013 | $ | 879,000 | |||
2014 | 849,000 | ||||
2015 | 849,000 | ||||
2016 | 849,000 | ||||
2017 | 849,000 | ||||
Thereafter | 1,113,000 | ||||
$ | 5,388,000 | ||||
Other contingencies | |||||
Under various agreements, the Company will be required to pay royalties and milestone payments upon the successful development and commercialization of products. The Company has entered into funding agreements with The Wellcome Trust Limited (Wellcome Trust) for the research and development of small molecule compounds. To the extent that the Company develops and commercializes program intellectual property on a for-profit basis, it may become obligated to pay to Wellcome Trust development and regulatory milestone payments of up to an aggregate of $68.9 million and single-digit royalties on sales of any research program product. The Company's obligation to pay such royalties would continue on a country-by-country basis until the longer of the expiration of the last patent in the program intellectual property in such country covering the research program product and the expiration of market exclusivity of such product in such country. | |||||
The Company has also entered into a collaboration agreement with the SMA Foundation. The Company may become obligated to pay the SMA Foundation single-digit royalties on worldwide net product sales of any collaboration product that we successfully develop and subsequently commercialize or, if we outlicense rights to a collaboration product, a specified percentage of certain payments we receive from our licensee. The Company is not obligated to make such payments unless and until annual sales of a collaboration product exceed a designated threshold. The Company's obligation to make such payments would end upon our payment to the SMA Foundation of a specified amount. | |||||
The Company has employment agreements with certain employees which require the funding of a specific level of payments, if certain events, such as a change in control or termination without cause, occur. | |||||
401k_plan
401(k) plan | 12 Months Ended |
Dec. 31, 2012 | |
401(k) plan | ' |
401(k) plan | ' |
13. 401(k) plan | |
The Company maintains a 401(k) plan for its employees. Employee contributions are voluntary. The Company may match employee contributions in amounts to be determined at the Company's sole discretion. The Company provides a 20% matching contribution for up to the first 5% of each contributing employee's base salary contributions. For the years ended December 31, 2011 and 2012, the Company made matching contributions to the 401(k) plan and recorded expense of approximately $177,000 and $154,000, respectively. | |
Subsequent_events
Subsequent events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Subsequent events | ' | ' |
Subsequent events | ' | ' |
12. Subsequent events | 14. Subsequent events | |
The Company continues to advance the development of its spinal muscular atrophy (SMA) collaboration with Roche and the SMA Foundation. The collaboration was initially funded in part by the SMA Foundation. In December 2011, the Company announced a partnership with Roche in the collaboration which provided an upfront payment of $30 million, up to $460 million in milestone payments and royalties on future sales. In August 2013, a development candidate for the program was announced which triggered a $10 million milestone payment from Roche. In January 2014, a Phase 1 clinical program was initiated which triggered a $7.5 million milestone payment from Roche. Roche is responsible for pursuing clinical development of compounds from the program consistent with a governance structure that includes representation from the Company and the SMA Foundation and then commercialization of these compounds. | On January 29, 2013, the Company entered into a financing arrangement with certain existing investors providing for the issuance by the Company of convertible promissory notes and warrants to purchase shares of Series One and Series Two. The Company issued convertible promissory notes in January and February 2013 in an aggregate principal amount of $6 million under this financing arrangement. This financing was closed in anticipation of an additional financing event, which is described in the next paragraph below. | |
On December 13, 2013, the Compensation Committee of the Company's Board of Directors approved the waiver of the remaining performance vesting triggers with respect to performance-based stock options granted to the Company's executive officers during 2013, such that 25% of the shares underlying such stock options vested on December 31, 2013, and an additional 2.0833% of the shares underlying such stock options will vest at the end of each successive month following December 31, 2013 until December 31, 2016. Approximately $0.6 million is expected to be recorded as share-based compensation in the fourth quarter of 2013 as a result of the modification of these stock options, which represents the incremental fair value of such modified stock options computed in accordance with ASC Topic 718 as of the date of modification. | On March 7, 2013, the Company closed a private placement of a new series of convertible preferred stock that resulted in another recapitalization event. In this private placement, the Company issued and sold an aggregate of 4,497,035 shares of Series Four senior preferred stock (Series Four) for an aggregate purchase price of approximately $54 million. In addition, the Company issued an aggregate of 502,919 shares of Series Four upon conversion of the convertible promissory notes described above that it originally issued in January and February 2013. In connection with this private placement, the Company effected a one-for-120 reverse stock split of its common stock and an exchange of outstanding shares of Series One, Series Two and Series Three into an aggregate of 6,700,487 shares of a new series of Series Five junior preferred stock (Series Five). In addition, the Company issued an aggregate of 2,095,515 shares Series Five upon the automatic exercise of the Series One and Series Two warrants described above that it originally issued in January 2013. The Company expects to account for the March 2013 Series Four financing and recapitalization as an extinguishment of its Series One, Series Two and Series Three stock and will record a gain or loss for the difference between the fair value of the new Series Four and Series Five shares over the carrying value of the Series One, Two and Three shares extinguished. The warrants to purchase shares of Series One, Two and Three issued in connection with the January 2013 convertible note financing will be recorded as a liability and remeasured each reporting period. The Company expects to record a debt discount resulting from the allocation of proceeds to the fair value of the warrants and reflect the discount as interest expense during the quarter ended March 31, 2013. | |
Valuation—The value of the Company was estimated using the PWERM. The PWERM considered the most significant near-term driver of value for the Company as the ability to file a MAA with the EMA for conditional approval of ataluren for the treatment of nmDMD. The Company has initiated a confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. If favorable, the results of the confirmatory Phase 3 clinical trial could serve as the basis for full approval by the EMA and the FDA of ataluren for the treatment of nmDMD in the European Union and the United States. The remaining scenarios in the PWERM related to funding the completion of the confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. | ||
After identifying the various potential liquidity scenarios and their likely timing, a pre-money enterprise value was assigned to each scenario based on a combination of management's guidance and recent trends in the capital markets. The resulting enterprise value for each liquidity event was divided by the total shares that would be outstanding under each scenario to arrive at a price per share for the common and preferred classes of stock. Each scenario was then assigned an outcome probability based on management's estimates. The resulting probability weighted share values were then discounted to present value at a rate that reflects general industry risks (but not Company specific risks). | ||
The rights and preferences of the shares of Series Four and Five are as follows: | ||
Dividends—The holders of Series Four and Series Five, in preference to the holders of common stock, are entitled to noncumulative dividends when and if declared by the Board of Directors. | ||
Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, the holders of Series Four will be entitled to receive, before any distribution or payment is made to any other class of security, an amount equal to the original issuance price, plus all declared, but unpaid, dividends. To the extent there are excess assets to distribute, the holders of Series Five will be entitled to receive, before any distribution or payment is made to the holders of the common stock, an amount equal to the stated liquidation preference, plus all declared, but unpaid, dividends. To the extent there are remaining assets to distribute, the holders of common stock will be entitled to receive such remaining assets. | ||
Voting—Each holder of Series Four and Series Five are entitled to cast the number of votes into which such holder's shares would convert. Except as required by law, holders of common stock have limited voting rights. Additionally, except as required by law, and except in certain enumerated circumstances, holders of Series Four and Series Five shall vote together with the holders of common stock as a single class. | ||
Conversion—Each share of Series Four and Series Five is convertible at any time at the option of the holder into one share of common stock. These conversion ratios are subject to adjustment for certain dilutive events, including certain types of stock splits or stock dividends or future recapitalizations. | ||
On March 5, 2013, the Company's Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based in the aggregate of 739,937 shares of Common Stock (calculated after the one-for-120 reverse stock split of its common stock). On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. | ||
Selected_quarterly_financial_d
Selected quarterly financial data (unaudited) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Selected quarterly financial data | ' | ' | |||||||||||||||||||||||
Selected quarterly financial data (unaudited) | ' | ' | |||||||||||||||||||||||
11. Selected quarterly financial data | 15. Selected quarterly financial data (unaudited) | ||||||||||||||||||||||||
The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for 2012 and 2013 are as follows (in thousands, except per share data): | The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Net income (loss) per share for all periods presented have been retroactively adjusted to reflect the 1-for-120 reverse stock split effected on March 7, 2013. Summarized quarterly data for 2011 and 2012 are as follows (in thousands, except per share data): | ||||||||||||||||||||||||
For the quarters ending | For the quarters ending | ||||||||||||||||||||||||
March 31 | June 30 | September 30 | March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||
2012:00:00 | 2011:00:00 | ||||||||||||||||||||||||
Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | Collaboration and grant revenue | $ | 4,853,008 | $ | 4,772,720 | $ | 86,423,733 | $ | 9,362,686 | ||||||||||
Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | Operating expenses | 19,848,797 | 19,682,313 | 18,315,064 | 16,983,976 | |||||||||||||||||
Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | Income (loss) from operations | (14,995,789 | ) | (14,909,593 | ) | 68,108,669 | (7,621,290 | ) | |||||||||||
Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | Net income (loss) | (15,550,607 | ) | (15,388,398 | ) | 67,608,165 | (5,764,646 | ) | |||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | Basic net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 52.39 | $ | (5,290.57 | ) | ||||||||||
Less beneficial conversion charge | — | (377,787 | ) | — | Diluted net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 9.95 | $ | (5,290.57 | ) | |||||||||
Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | 2012:00:00 | |||||||||||||||||||
Basic net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | $ | 6,640,090 | ||||||||
Diluted net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | 12,674,520 | ||||||||||||
2013:00:00 | Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | (6,034,430 | ) | ||||||||||||||||
Collaboration and grant revenue | $ | 7,141,664 | $ | 6,854,212 | $ | 16,289,573 | Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | (6,272,044 | ) | ||||||||||
Operating expenses | 15,718,073 | 21,307,148 | 20,565,188 | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | — | |||||||||||||||||
Income (loss) from operations | (8,576,409 | ) | (14,452,936 | ) | (4,275,615 | ) | Less beneficial conversion charge | — | (377,787 | ) | — | — | |||||||||||||
Net income (loss) | (14,684,535 | ) | (14,586,578 | ) | (4,416,499 | ) | Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | (6,372,044 | ) | |||||||||||
Deemed dividend | (18,248,768 | ) | — | — | Basic net income (loss) attributable to common stockholders per share | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | |||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 3,390,750 | — | — | Diluted net income (loss) attributable to common stockholders per share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | ||||||||||
Net income (loss) attributable to common stockholders | (29,542,553 | ) | (14,586,578 | ) | (4,416,499 | ) | |||||||||||||||||||
Basic net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | ||||||||||||||||
Diluted net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | (1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||
(1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||||||||||||
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Summary of significant accounting policies | ' | ' | ||
Unaudited pro forma presentation | ' | ' | ||
Unaudited pro forma presentation | ||||
Unaudited pro forma net loss per share is computed using the weighted-average number of common shares outstanding after giving effect to the pro forma effect of the conversion of all convertible preferred stock during the year ended December 31, 2012 into shares of the Company's common stock as if such conversion had occurred at the beginning of the period presented. | ||||
Segment and geographic information | ' | ' | ||
Segment and geographic information | ||||
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment. | ||||
Accounting changes | ' | ' | ||
Accounting changes | ||||
Effective January 1, 2012, an update to an accounting standard was issued that requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update was applied retrospectively. The Company adopted this pronouncement and elected to present a separate statement of comprehensive income. The updated standard does not change the items that must be reported in comprehensive income, how such items are measure, or when they must be reclassified to net income. | ||||
Cash equivalents | ' | ' | ||
Cash equivalents | ||||
The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost which approximates fair value due to their short-term nature. | ||||
Fixed assets | ' | ' | ||
Fixed assets | ||||
Fixed assets are stated at cost. Depreciation is computed starting when the asset is placed into service on a straight-line basis over the estimated useful life of the related asset as follows: | ||||
Leasehold improvements | Lesser of useful life or lease term | |||
Computer equipment and software | 3 years | |||
Furniture, fixtures, and lab equipment | 3 to 7 years | |||
Grant and collaboration receivables | ' | ' | ||
Grant and collaboration receivables | ||||
The Company records receivables in conjunction with grant and collaboration agreements when the services have been performed. The Company will record an allowance for bad debt if receivables are anticipated to be uncollectible. There is no indication that any receivables are uncollectible as of December 31, 2011 and 2012. Write-offs of receivables have historically been insignificant. | ||||
Concentration of risks | ' | ' | ||
Concentration of risks | ||||
The Company has no significant off-balance-sheet risk or credit risk concentrations. The Company maintains its cash and cash equivalents with various financial institutions. The Company maintains cash accounts that may at times exceed the federally insured limit; however, it has not experienced and does not anticipate experiencing any credit losses from maintaining cash accounts in excess of such limits. | ||||
The Company's revenues from its two largest collaboration partners and its largest grant as a percentage of total revenues were 85%, 8%, and 3%, respectively, for 2011 and were 67%, 11%, and 9%, respectively, for 2012. | ||||
Reverse stock split | ' | ' | ||
Reverse stock split | Reverse stock split | |||
On March 7, 2013, the Company effected a one-for-120 reverse stock split of its common stock, pursuant to which each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All common stock share and per share references in the financial statements and notes thereto have been restated to reflect the reverse stock split on a retroactive basis. | As a result of the one-for-120 reverse stock split that was effected on March 7, 2013, each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All references to common stock have been restated to reflect the reverse stock split on a retroactive basis. | |||
Deferred rent | ' | ' | ||
Deferred rent | ||||
The Company has an operating lease for office space. Rent expense is recorded on a straight-line basis over the initial lease term. The difference between the actual cash paid and the straight-line rent expense is recorded as deferred rent. Leasehold improvements made related to this lease, subsequent to its inception, are amortized over the remaining lease term. | ||||
Revenue recognition | ' | ' | ||
Revenue recognition | Revenue recognition | |||
The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | |||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | |||
The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | |||
For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | |||
For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this new guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | |||
The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from its activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. | The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. | |||
The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | |||
Research and development costs | ' | ' | ||
Research and development costs | ||||
Research and development expenses include the clinical development costs associated with the Company's product development programs and research and development costs associated with the Company's discovery programs. These expenses include internal research and development costs and the costs of research and development conducted on behalf of the Company by third parties, including sponsored university-based research agreements and clinical study vendors. All research and development costs are expensed as incurred. Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses. | ||||
Nonrefundable advance payments made for goods and services that will be used in future research and development activities are deferred if the contracted party has not yet performed the related activities. The amount deferred is then recognized as expense when the research and development activities are performed. The Company has deferred research and development advance payments of approximately $245,000 and $228,000 as of December 31, 2011 and 2012, respectively. | ||||
Fair value of financial instruments | ' | ' | ||
Fair value of financial instruments | Fair value of financial instruments | |||
The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establishes a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | |||
• | • | |||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | |||
• | • | |||
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability | Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | |||
(i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | • | |||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | ||||
• | ||||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | Cash equivalents and investments are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables and accounts payable and accrued expenses approximates fair value due to the short-term nature of those instruments. | |||
Cash equivalents are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables, accounts payable and accrued expenses, and debt approximates fair value due to the short-term nature of those instruments. | ||||
Beneficial conversion | ' | ' | ||
Beneficial conversion | ||||
When the Company issues a debt or an equity security that is convertible into common stock at a discount from the fair value of the common stock at the date the debt or equity security counterparty is legally committed to purchase such a security (Commitment Date), a beneficial conversion charge is measured and recorded on the Commitment Date for the difference between the fair value of the Company's common stock and the effective conversion price of the convertible debt or equity security. If the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible debt or equity security, the amount of the discount assigned to the beneficial conversion feature is limited to the amount of the proceeds allocated to the convertible debt or equity security. | ||||
The amount allocated to the beneficial conversion feature is presented as a discount or reduction to the related debt security or as an immediate charge to earnings available to common shareholders for convertible preferred stock instruments that are convertible by the shareholders at any time. In connection with the Company's recapitalization of its outstanding convertible preferred stock in 2012, the Company recorded a beneficial conversion charge representing the difference between the effective conversion price and the fair value of the Company's common stock as of the Commitment Date. Because the intrinsic value was in excess of the proceeds allocated to the Company's new Series Three convertible preferred stock; the beneficial conversion charge was limited to the allocated proceeds of approximately $377,000. | ||||
Warrant liability | ' | ' | ||
Warrant liability | Warrant liability | |||
Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain (loss) on warrant valuation each reporting period in Other income (expense), net on the Company's statement of operations. | Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain/(loss) on warrant valuation each reporting period in Other income on the Company's statement of operations. | |||
Impairment of long-lived assets | ' | ' | ||
Impairment of long-lived assets | ||||
The Company monitors its long-lived assets for indicators of impairment. If such indicators are present, the Company assesses the recoverability of affected assets by determining whether the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found not to be recoverable, the Company measures the amount of such impairment by comparing the carrying value of the assets to the fair value of the assets, with the fair value generally determined based on the present value of the expected future cash flows associated with the assets. Although current and historical negative cash flows are indicators of impairment, management believes the future cash flows to be received from the long-lived assets and the potential success of the Company's research programs will exceed the assets' carrying value, and accordingly, the Company believes that no impairment of long-lived assets exists as of December 31, 2012. | ||||
Share-based compensation | ' | ' | ||
Share-based compensation | Share-based compensation | |||
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. For service type awards, share-based compensation expense is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. For awards that vest or begin vesting upon achievement of a performance condition, the Company estimates the likelihood of satisfaction of the performance condition and recognizes compensation expense when achievement of the performance condition is deemed probable using an accelerated attribution model. | The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. | |||
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions, such as expected volatility and expected term. As a new public company, the Company does not have sufficient history to estimate the volatility of its common stock price or the expected life of the options. The Company calculates expected volatility based on reported data for similar publicly traded companies for which historical information is available and will continue to do so until the historical volatility of its common stock is sufficient to measure expected volatility for future option grants. | The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions such as stock price, expected volatility and expected term. The Company's estimates of these assumptions are primarily based on third-party valuations, historical data, peer company data and judgment regarding future trends and factors. | |||
The Company utilized various valuation methodologies in accordance with the framework of the 2004 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its stock. The methodologies included an option pricing method to estimate the Company's underlying equity value, and a methodology that determined an estimated value under an initial public offering (IPO) scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology includes estimates and assumptions that require the Company's judgment. These estimates include assumptions regarding future performance, including the completion of clinical trials and the time to complete an IPO or sale of the Company. As with any valuation, significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date. | ||||
Income taxes | ' | ' | ||
Income taxes | ||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more likely than not that all or a portion of the net deferred tax assets will be realized. | ||||
Net income per share | ' | ' | ||
Net income per share | ||||
Basic net income per share is calculated by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income per share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of convertible preferred stock and options outstanding under the Company's stock option plans. | ||||
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 12 Months Ended | ||
Dec. 31, 2012 | |||
Summary of significant accounting policies | ' | ||
Schedule of estimated useful life of related assets | ' | ||
Leasehold improvements | Lesser of useful life or lease term | ||
Computer equipment and software | 3 years | ||
Furniture, fixtures, and lab equipment | 3 to 7 years | ||
Fair_value_of_financial_instru1
Fair value of financial instruments and investments (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Fair value of financial instruments and marketable securities | ' | ' | |||||||||||||||||||||||
Schedule of financial assets that are required to be measured at fair value on a recurring basis | ' | ' | |||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Warrant liability | $ | 95,661 | $ | — | $ | — | $ | 95,661 | Warrant liability | $ | 1,878,316 | $— | $— | $1,878,316 | |||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Marketable securities | $ | 133,182,565 | $ | — | $ | 133,182,565 | $ | — | Warrant liability | $ | 95,661 | $— | $— | $95,661 | |||||||||||
Warrant liability | 98,819 | — | — | 98,819 | |||||||||||||||||||||
Summary of changes in the fair value of the Company's Level 3 valuation for warrant liability | ' | ' | |||||||||||||||||||||||
Level 3 assets | Level 3 assets | ||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | $ | 95,661 | Beginning balance January 1, 2011 | $ | 2,340,263 | ||||||||||||||||||||
Warrants issued in connection with convertible promissory notes | 6,000,000 | Change in fair value of warrant liability | (461,947 | ) | |||||||||||||||||||||
Deemed dividend | 18,248,768 | ||||||||||||||||||||||||
Exercise of warrants issued in connection with convertible promissory notes | (24,248,765 | ) | Ending balance as of December 31, 2011 | 1,878,316 | |||||||||||||||||||||
Change in fair value of warrant liability | 3,155 | Change in fair value of warrant liability | (1,782,655 | ) | |||||||||||||||||||||
Ending balance as of September 30, 2013 | $ | 98,819 | Ending balance as of December 31, 2012 | $ | 95,661 | ||||||||||||||||||||
Fixed_assets_Tables
Fixed assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Fixed assets | ' | |||||||
Schedule of fixed assets, net | ' | |||||||
December 31, | ||||||||
2011 | 2012 | |||||||
Leasehold improvements | $ | 12,473,836 | $ | 12,473,836 | ||||
Computer equipment and software | 2,082,638 | 2,118,713 | ||||||
Furniture, fixtures, and lab equipment | 13,781,118 | 13,969,758 | ||||||
Assets not yet placed in service | 40,186 | 4,152 | ||||||
28,377,778 | 28,566,459 | |||||||
Less accumulated depreciation and amortization | (17,582,271 | ) | (20,286,422 | ) | ||||
$ | 10,795,507 | $ | 8,280,037 | |||||
Accounts_payable_and_accrued_e1
Accounts payable and accrued expenses (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Accounts payable and accrued expenses | ' | ' | ||||||||||||||
Schedule of components of accounts payable and accrued expenses | ' | ' | ||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||
2012 | 2013 | 2011 | 2012 | |||||||||||||
Employee compensation, benefits, and related accruals | $ | 3,096,475 | $ | 3,659,084 | Employee compensation, benefits, and related accruals | $ | 3,492,170 | $ | 3,096,475 | |||||||
Consulting and contracted research | 2,515,678 | 3,556,350 | Consulting and contracted research | 6,749,272 | 2,515,678 | |||||||||||
Professional fees | 559,228 | 1,532,458 | Professional fees | 492,811 | 559,228 | |||||||||||
Accounts payable | 621,591 | 1,017,122 | Accounts payable | 1,878,109 | 621,591 | |||||||||||
Other | 230,999 | 440,479 | Other | 437,092 | 230,999 | |||||||||||
$ | 7,023,971 | $ | 10,205,493 | $ | 13,049,454 | $ | 7,023,971 | |||||||||
Longterm_debt_Tables
Long-term debt (Tables) | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Debt | ' | ||||
Schedule of aggregate debt maturities | ' | ||||
As of December 31, 2012, aggregate debt maturities are as follows: | |||||
2013 | $ | 4,499,442 | |||
2014 | 439,487 | ||||
Total debt at maturity value | 4,938,929 | ||||
Less unamortized discount | (55,948 | ) | |||
Total carrying value of debt | $ | 4,882,981 | |||
Capital_structure_Tables
Capital structure (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Capital structure | ' | ' | ||||||||||||||||||||
Summary of the Company's outstanding warrants | ' | ' | ||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2011: | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | ||||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | |||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | Series E convertible preferred stock | 54,465 | $ | 7.26 | 2014 | ||||||||||||||||
Series F convertible preferred stock | 50,000 | $ | 16 | 2017 | ||||||||||||||||||
Series Two | 24,712 | $ | 16 | 2014 | Series F-2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | |||||||||||||
Series Two | 50,000 | $ | 16 | 2017 | Common stock | 645 | $ | 2,520 | 2013 and 2014 | |||||||||||||
Series Two | 56,250 | $ | 16 | 2019 and 2020 | ||||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of September 30, 2013: | ||||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | |||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | Series 2 convertible preferred stock | 24,712 | $ | 16 | 2014 | ||||||||||||||||
Series 2 convertible preferred stock | 50,000 | $ | 16 | 2017 | ||||||||||||||||||
Common stock | 3,088 | $ | 128 | 2014 | Series 2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | |||||||||||||
Common stock | 6,250 | $ | 128 | 2017 | Common stock | 645 | $ | 2,520 | 2013 and 2014 | |||||||||||||
Common stock | 7,030 | $ | 128 | 2019 and 2020 | ||||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Earnings_per_share_Tables
Earnings per share (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Net income (loss) per share | ' | ' | ||||||||||||||
Schedule of computation of basic and diluted earnings per share for common stockholders | ' | ' | ||||||||||||||
Nine months ended | Year ended December 31 | |||||||||||||||
September 30, | 2011 | 2012 | ||||||||||||||
2012 | 2013 | |||||||||||||||
Numerator | ||||||||||||||||
Numerator | Net income (loss) | $ | 30,904,514 | $ | (26,235,102 | ) | ||||||||||
Net loss | $ | (19,963,058 | ) | $ | (33,687,612 | ) | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | |||||||
Deemed dividend | — | (18,248,768 | ) | Less beneficial conversion charge | — | (377,787 | ) | |||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 159,954,069 | 3,390,750 | Less net income attributable to participating preferred stock | (30,878,445 | ) | (132,609,918 | ) | |||||||||
Less beneficial conversion charge | (377,787 | ) | — | |||||||||||||
Less net income attributable to participating securities | (139,077,495 | ) | — | Net income attributable to common stockholders | $ | 26,069 | $ | 731,262 | ||||||||
Net income (loss) attributable to common stockholders | $ | 535,729 | $ | (48,545,630 | ) | Denominator | ||||||||||
Denominator for basic earnings per share | 1,089 | 3,328 | ||||||||||||||
Denominator | Effect of dilutive securities: | |||||||||||||||
Denominator for basic net income (loss) per share | 2,937 | 8,995,167 | Employee stock options | 4,640 | — | |||||||||||
Effect of dilutive securities | Series 3 convertible preferred stock | — | 13,877 | |||||||||||||
Series Three convertible preferred stock | 10,656 | — | ||||||||||||||
Denominator for diluted earnings per share | 5,729 | 17,205 | ||||||||||||||
Denominator for diluted net income (loss) per share | 13,593 | 8,995,167 | ||||||||||||||
Net income per share: | ||||||||||||||||
Net income (loss) per share: | Basic | 23.95 | 219.76 | |||||||||||||
Basic | $ | 182.41 | $ | (5.40 | )* | |||||||||||
Diluted | 4.55 | 42.5 | ||||||||||||||
Diluted | $ | 39.41 | $ | (5.40 | )* | |||||||||||
* In the nine months ended September 30, 2013, the Company experienced a net loss and therefore did not report any dilutive share impact. | ||||||||||||||||
Stock_option_plan_Tables
Stock option plan (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||
Stock option plan | ' | ' | |||||||||||||||||||||||||||
Summary of stock option activity | ' | ' | |||||||||||||||||||||||||||
(in thousands) | Number of | Exercise price | Weighted- | Weighted- | Aggregate | Number of | Exercise | Weighted- | Weighted- | Aggregate | |||||||||||||||||||
options | average | average | intrinsic | options | price | average | average | intrinsic | |||||||||||||||||||||
exercise | remaining | value | exercise | remaining | value | ||||||||||||||||||||||||
price | contractual | price | contractual | ||||||||||||||||||||||||||
term | term | ||||||||||||||||||||||||||||
Outstanding at December 31, 2010 | 39,557 | $226.80-$1,149.60 | $ | 547.2 | |||||||||||||||||||||||||
Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 469.48 | Granted | 8,123 | $490.80 | $ | 490.8 | ||||||||||||||||||||
Granted | 2,007,713 | $10.59-$10.85 | $ | 10.85 | Exercised | (11 | ) | $451.20-$508.80 | $ | 459.6 | |||||||||||||||||||
Exercised | — | — | — | Forfeited | (875 | ) | $226.80-$1,149.60 | $ | 757.2 | ||||||||||||||||||||
Forfeited | (62,247 | ) | $10.85-$1,149.60 | $ | 17.1 | ||||||||||||||||||||||||
Outstanding at December 31, 2011 | 46,794 | $226.80-$1,149.60 | $ | 532.8 | 5.74 years | ||||||||||||||||||||||||
Outstanding at September 30, 2013 | 1,987,860 | $10.59-$1,149.60 | $ | 20.44 | 9.51 years | $ | 20,652 | Granted | 5,715 | $218.40 | $ | 218.4 | |||||||||||||||||
Exercised | — | ||||||||||||||||||||||||||||
Exercisable at September 30, 2013 | 61,834 | $10.59-$1,149.60 | $ | 290.39 | 6.06 years | $ | 265 | Forfeited | (10,115 | ) | $218.40-$1,149.60 | $ | 604.8 | ||||||||||||||||
Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 474 | 5.02 years | — | |||||||||||||||||||||||
Exercisable at December 31, 2012 | 33,414 | $218.40-$1,149.60 | $ | 482.4 | 4.14 years | — | |||||||||||||||||||||||
Exercisable and expected to vest at December 31, 2012 | 42,184 | $218.40-$1,149.60 | $ | 476.4 | 4.97 years | — | |||||||||||||||||||||||
Schedule of assumptions used to estimate fair value of grants made on the date of grant | ' | ' | |||||||||||||||||||||||||||
Nine months ended | 2011 | 2012 | |||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||
Risk-free interest rate | 2.40% | 1.14% | |||||||||||||||||||||||||||
Risk-free interest rate | 0.85%-1.69% | Expected volatility | 87% | 87% | |||||||||||||||||||||||||
Expected volatility | 87%-88% | Expected term | 6.00-6.25 years | 6.00-6.25 years | |||||||||||||||||||||||||
Expected term | 5.00 to 6.00 years | ||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | ||||||||||||||||||||||||||||
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Income taxes | ' | |||||||
Schedule of reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate | ' | |||||||
December 31 | ||||||||
2011 | 2012 | |||||||
Federal income tax (benefit) at statutory rate | 34.00% | 34.00% | ||||||
State income tax benefit, net of federal benefit | 4.2 | 3.8 | ||||||
Other | (1.60 | ) | (2.00 | ) | ||||
Increase to valuation allowance | (45.90 | ) | (35.80 | ) | ||||
Effective income tax rate | (9.3 | ) | 0.00% | |||||
Schedule of significant components of the Company's deferred tax assets and liabilities | ' | |||||||
2011 | 2012 | |||||||
Deferred tax assets: | ||||||||
Amortization | $ | 103,355 | $ | 91,871 | ||||
Depreciation | 1,196,569 | 1,535,952 | ||||||
Accrued expense | 321,925 | 1,208,846 | ||||||
Deferred revenue | 15,738,180 | 6,962,506 | ||||||
Federal tax credits | 5,734,074 | 5,383,092 | ||||||
State tax credits | 1,495,773 | 1,094,833 | ||||||
Federal net operating losses | 56,074,019 | 71,752,278 | ||||||
State net operating losses | 5,024,189 | 7,619,606 | ||||||
Capitalized research and development costs | 11,184,849 | 10,479,055 | ||||||
Other | 600,059 | 742,341 | ||||||
Total gross deferred tax assets | 97,472,992 | 106,870,380 | ||||||
Less valuation allowance | (97,472,992 | ) | (106,870,380 | ) | ||||
Net deferred tax assets | $ | — | $ | — | ||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
Commitments and contingencies | ' | ||||
Schedule of future minimum lease payments | ' | ||||
Future minimum lease payments as of December 31, 2012 are as follows: | |||||
2013 | $ | 879,000 | |||
2014 | 849,000 | ||||
2015 | 849,000 | ||||
2016 | 849,000 | ||||
2017 | 849,000 | ||||
Thereafter | 1,113,000 | ||||
$ | 5,388,000 | ||||
Selected_quarterly_financial_d1
Selected quarterly financial data (unaudited) (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Selected quarterly financial data | ' | ' | |||||||||||||||||||||||
Summary of quarterly data | ' | ' | |||||||||||||||||||||||
Summarized quarterly data for 2012 and 2013 are as follows (in thousands, except per share data): | |||||||||||||||||||||||||
For the quarters ending | |||||||||||||||||||||||||
March 31 | June 30 | September 30 | |||||||||||||||||||||||
For the quarters ending | |||||||||||||||||||||||||
2012:00:00 | March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||||
Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | |||||||||||||||||||
Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | 2011:00:00 | |||||||||||||||||||||
Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | Collaboration and grant revenue | $ | 4,853,008 | $ | 4,772,720 | $ | 86,423,733 | $ | 9,362,686 | ||||||||||
Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | Operating expenses | 19,848,797 | 19,682,313 | 18,315,064 | 16,983,976 | ||||||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | Income (loss) from operations | (14,995,789 | ) | (14,909,593 | ) | 68,108,669 | (7,621,290 | ) | ||||||||||||||
Less beneficial conversion charge | — | (377,787 | ) | — | Net income (loss) | (15,550,607 | ) | (15,388,398 | ) | 67,608,165 | (5,764,646 | ) | |||||||||||||
Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | Basic net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 52.39 | $ | (5,290.57 | ) | ||||||||
Basic net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | Diluted net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 9.95 | $ | (5,290.57 | ) | |||||
Diluted net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | 2012:00:00 | ||||||||||||||||
2013:00:00 | Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | $ | 6,640,090 | ||||||||||||||||
Collaboration and grant revenue | $ | 7,141,664 | $ | 6,854,212 | $ | 16,289,573 | Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | 12,674,520 | ||||||||||||||
Operating expenses | 15,718,073 | 21,307,148 | 20,565,188 | Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | (6,034,430 | ) | |||||||||||||
Income (loss) from operations | (8,576,409 | ) | (14,452,936 | ) | (4,275,615 | ) | Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | (6,272,044 | ) | ||||||||||
Net income (loss) | (14,684,535 | ) | (14,586,578 | ) | (4,416,499 | ) | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | — | ||||||||||||||
Deemed dividend | (18,248,768 | ) | — | — | Less beneficial conversion charge | — | (377,787 | ) | — | — | |||||||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 3,390,750 | — | — | Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | (6,372,044 | ) | ||||||||||||||
Net income (loss) attributable to common stockholders | (29,542,553 | ) | (14,586,578 | ) | (4,416,499 | ) | Basic net income (loss) attributable to common stockholders per share | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | |||||||
Basic net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | Diluted net income (loss) attributable to common stockholders per share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | ||||
Diluted net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | ||||||||||||||||
(1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||||||||||||
(1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||||||||||||
The_Company_Details
The Company (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
The Company | ' | ' | ' |
Accumulated deficit | $310,912,330 | $277,224,718 | $250,611,829 |
Summary_of_significant_account3
Summary of significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2012 | |
item | |
Segment and geographic information | ' |
Number of operating segments | 1 |
Computer equipment and software | ' |
Fixed assets | ' |
Estimated useful life | '3 years |
Furniture, fixtures, and lab equipment | Minimum | ' |
Fixed assets | ' |
Estimated useful life | '3 years |
Furniture, fixtures, and lab equipment | Maximum | ' |
Fixed assets | ' |
Estimated useful life | '7 years |
Summary_of_significant_account4
Summary of significant accounting policies (Details 2) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Concentration of risks | ' | ' |
Number of largest collaboration partners | 2 | ' |
Revenue | Customer concentration risk | Collaboration partner one | ' | ' |
Concentration of risks | ' | ' |
Concentration risk (as a percent) | 67.00% | 85.00% |
Revenue | Customer concentration risk | Collaboration partner two | ' | ' |
Concentration of risks | ' | ' |
Concentration risk (as a percent) | 11.00% | 8.00% |
Revenue | Customer concentration risk | Granting agency | ' | ' |
Concentration of risks | ' | ' |
Concentration risk (as a percent) | 9.00% | 3.00% |
Summary_of_significant_account5
Summary of significant accounting policies (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | ||
Jun. 30, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 07, 2013 | Mar. 07, 2013 | |
Common stock | Common stock | |||||
Subsequent event | ||||||
Reverse stock split | ' | ' | ' | ' | ' | ' |
Reverse stock split ratio | ' | ' | ' | ' | 0.0083 | 0.0083 |
Research and development costs | ' | ' | ' | ' | ' | ' |
Deferred research and development advance payments | ' | ' | $228,000 | $245,000 | ' | ' |
Beneficial conversion | ' | ' | ' | ' | ' | ' |
Beneficial conversion charge | 377,787 | 377,787 | 377,787 | ' | ' | ' |
Impairment of long-lived assets | ' | ' | ' | ' | ' | ' |
Impairment of long-lived assets | ' | ' | $0 | ' | ' | ' |
Fair_value_of_financial_instru2
Fair value of financial instruments and investments (Details) (Recurring basis, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Total | ' | ' | ' |
Financial assets measured at fair value on recurring basis | ' | ' | ' |
Warrant liability | $98,819 | $95,661 | $1,878,316 |
Significant unobservable inputs (level 3) | ' | ' | ' |
Financial assets measured at fair value on recurring basis | ' | ' | ' |
Warrant liability | $98,819 | $95,661 | $1,878,316 |
Fair_value_of_financial_instru3
Fair value of financial instruments and investments (Details 2) (Warrant, USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Changes in the fair value of warrant liability | ' | ' | ' |
Beginning balance | $95,661 | $1,878,316 | $2,340,263 |
Change in fair value of warrant liability | 3,155 | -1,782,655 | -461,947 |
Ending balance | $98,819 | $95,661 | $1,878,316 |
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ' | ' | ' |
Volatility (as a percent) | ' | 87.00% | 88.00% |
Strike price (in dollars per share) | $128 | $16 | ' |
Minimum | ' | ' | ' |
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ' | ' | ' |
Volatility (as a percent) | 69.00% | ' | ' |
Risk-free interest rate (as a percent) | 0.02% | 0.16% | 0.25% |
Strike price (in dollars per share) | ' | ' | $7.26 |
Expected life | '2 months 19 days | '1 year | '2 years |
Maximum | ' | ' | ' |
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ' | ' | ' |
Volatility (as a percent) | 87.00% | ' | ' |
Risk-free interest rate (as a percent) | 1.71% | 1.18% | 1.62% |
Strike price (in dollars per share) | ' | ' | $16 |
Expected life | '5 years 11 months 23 days | '7 years | '8 years |
Preferred shares | ' | ' | ' |
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ' | ' | ' |
Fair value of common shares (in dollars per share) | $21.46 | $2.35 | $16 |
Fixed_assets_Details
Fixed assets (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Fixed assets | ' | ' | ' | ' |
Gross fixed assets | ' | ' | $28,566,459 | $28,377,778 |
Less accumulated depreciation and amortization | ' | ' | -20,286,422 | -17,582,271 |
Net fixed assets | 6,942,956 | ' | 8,280,037 | 10,795,507 |
Depreciation expense | 1,810,850 | 2,048,682 | 2,704,151 | 2,871,200 |
Leasehold improvements | ' | ' | ' | ' |
Fixed assets | ' | ' | ' | ' |
Gross fixed assets | ' | ' | 12,473,836 | 12,473,836 |
Computer equipment and software | ' | ' | ' | ' |
Fixed assets | ' | ' | ' | ' |
Gross fixed assets | ' | ' | 2,118,713 | 2,082,638 |
Furniture, fixtures, and lab equipment | ' | ' | ' | ' |
Fixed assets | ' | ' | ' | ' |
Gross fixed assets | ' | ' | 13,969,758 | 13,781,118 |
Assets not yet placed in service | ' | ' | ' | ' |
Fixed assets | ' | ' | ' | ' |
Gross fixed assets | ' | ' | $4,152 | $40,186 |
Accounts_payable_and_accrued_e2
Accounts payable and accrued expenses (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts payable and accrued expenses | ' | ' | ' |
Employee compensation, benefits, and related accruals | $3,659,084 | $3,096,475 | $3,492,170 |
Consulting and contracted research | 3,556,350 | 2,515,678 | 6,749,272 |
Professional fees | 1,532,458 | 559,228 | 492,811 |
Accounts payable | 1,017,122 | 621,591 | 1,878,109 |
Other | 440,479 | 230,999 | 437,092 |
Accounts payable and accrued expenses | $10,205,493 | $7,023,971 | $13,049,454 |
Longterm_debt_Details
Long-term debt (Details) (Laboratory instrument, USD $) | Dec. 31, 2012 | Dec. 31, 2011 | 31-May-09 |
Laboratory instrument | ' | ' | ' |
Capital lease information | ' | ' | ' |
Implied interest rate (as a percent) | ' | ' | 8.20% |
Remaining principal | $187,000 | $314,000 | ' |
Longterm_debt_Details_2
Long-term debt (Details 2) (Secured debt facility, USD $) | 1 Months Ended | |
Jul. 31, 2013 | Sep. 30, 2009 | |
item | item | |
Secured debt facility | ' | ' |
Debt | ' | ' |
Maximum borrowing capacity | $25,000,000 | $25,000,000 |
Number of lenders | 2 | 2 |
Longterm_debt_Details_3
Long-term debt (Details 3) (USD $) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2010 | Sep. 30, 2009 | Dec. 31, 2012 | Jul. 31, 2013 | Dec. 31, 2011 | |
item | |||||
Series F-2 convertible preferred stock | Warrants | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | ' | ' |
Number of shares that can be acquired from warrants exercisable | ' | ' | ' | ' | 56,250 |
Secured debt facility | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | ' | ' |
Amount borrowed | $10,000,000 | $12,500,000 | ' | ' | ' |
Fixed interest rate of notes (as a percent) | ' | ' | 13.65% | 13.65% | ' |
Period of interest-only payments | ' | ' | '5 months | ' | ' |
Period for principal repayment | ' | ' | '30 months | ' | ' |
Outstanding balance of the notes | ' | ' | 4,752,000 | ' | 11,569,000 |
Number of financial covenants associated with the debt facility | ' | ' | 0 | ' | ' |
Number of events of default | ' | ' | 0 | ' | ' |
Aggregate debt maturities | ' | ' | ' | ' | ' |
2013 | ' | ' | 4,499,442 | ' | ' |
2014 | ' | ' | 439,487 | ' | ' |
Total debt at maturity value | ' | ' | 4,938,929 | ' | ' |
Less unamortized discount | ' | ' | -55,948 | ' | ' |
Total carrying value of debt | ' | ' | $4,882,981 | ' | ' |
Secured debt facility | Series F-2 convertible preferred stock | Warrants | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | ' | ' | ' |
Number of shares purchased through warrants | ' | 62,500 | ' | ' | ' |
Exercise price (in dollars per share) | ' | $16 | ' | ' | ' |
Capital_structure_Details
Capital structure (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||||
Jul. 31, 2012 | Mar. 31, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Jul. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
item | Maximum | Minimum | Series A | Series B | Series C | Series D | Series E | Series E-2 | Series F | Series F-2 | Series G | Series F, F-2 and G | Series One | Series One | Series Two | Series Three | |||||||
Minimum | item | item | item | ||||||||||||||||||||
Capital structure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares authorized | ' | ' | ' | ' | ' | ' | ' | 156,995,095 | ' | 750,000 | 187,500 | 6,295,000 | 13,769,935 | 126,735,022 | 3,670,138 | 675,000 | 1,612,500 | 3,300,000 | ' | ' | 2,000,000 | 13,750,000 | 13,750,000 |
Par value (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion factor | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.0833 | 0.1333 | 0.1389 | 0.1548 | 0.0548 | 1 | 1 | 1 | 1 | ' | ' | ' | ' | ' |
Percentage of the outstanding preferred shares on an as-converted to common stock basis | ' | ' | ' | ' | ' | ' | ' | ' | 66.67% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 66.67% | ' | ' | ' | ' |
Number of members of board of directors who can be elected by holders of the preferred stock, voting as a single class | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12 | ' | ' |
Liquidation preference (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | $2 | $2.50 | $3.25 | $0.40 | $7.26 | $16 | $16 | $16 | ' | ' | ' | ' | ' |
Aggregate liquidation preference | ' | ' | ' | ' | ' | ' | ' | ' | ' | $750,000 | $375,000 | $15,000,000 | $42,561,249 | $49,999,998 | $26,645,187 | $10,000,000 | $24,248,048 | $50,300,000 | ' | ' | ' | ' | ' |
Shares sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,483,337 | ' | ' | ' |
Aggregate gross proceeds | ' | ' | ' | ' | 29,354,752 | 29,354,752 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,700,000 | ' | ' | ' |
Gain on exchange of convertible preferred stock in connection with recapitalization | $160,000,000 | $3,390,750 | $159,954,069 | $3,390,750 | $159,954,069 | $159,954,069 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Original issuance price multiplier | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Assets available for distribution to series two convertible preferred stock, distribution percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23.53% | 76.47% | ' |
Stated liquidation preference amount multiplier | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 |
Assets available for distribution to series three convertible preferred stock, distribution percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23.53% | 67.65% | 8.82% |
Remaining assets distribution percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 55.00% | 25.00% |
Shares issued upon conversion of preferred stock multiplier | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' |
Number of shares issued for each share of convertible preferred stock upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 1 | 1 |
Capital_structure_Details_2
Capital structure (Details 2) (Warrants, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Series E convertible preferred stock | 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | ' | 54,465 |
Exercise price (in dollars per share) | ' | ' | $7.26 |
Series F convertible preferred stock | 2017 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | ' | 50,000 |
Exercise price (in dollars per share) | ' | ' | $16 |
Series F-2 convertible preferred stock | 2019 and 2020 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | ' | 56,250 |
Exercise price (in dollars per share) | ' | ' | $16 |
Series 2 convertible preferred stock | 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | 24,712 | ' |
Exercise price (in dollars per share) | ' | $16 | ' |
Series 2 convertible preferred stock | 2017 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | 50,000 | ' |
Exercise price (in dollars per share) | ' | $16 | ' |
Series 2 convertible preferred stock | 2019 and 2020 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | 56,250 | ' |
Exercise price (in dollars per share) | ' | $16 | ' |
Common stock | 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 3,088 | ' | ' |
Exercise price (in dollars per share) | $128 | ' | ' |
Common stock | 2017 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 6,250 | ' | ' |
Exercise price (in dollars per share) | $128 | ' | ' |
Common stock | 2019 and 2020 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 7,030 | ' | ' |
Exercise price (in dollars per share) | $128 | ' | ' |
Common stock | 2013 and 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 645 | 645 | 645 |
Exercise price (in dollars per share) | $2,520 | $2,520 | $2,520 |
Earnings_per_share_Details
Earnings per share (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jul. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Net income per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock equivalents excluded from calculation of diluted earnings per share since the effect would be anti-dilutive | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,101,667 | 44,218 | 600,000 | 1,300,000 |
Numerator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | ($4,416,499) | ($14,586,578) | ($14,684,535) | ($6,272,044) | ($7,297,125) | ($6,068,072) | ($6,597,861) | ($5,764,646) | $67,608,165 | ($15,388,398) | ($15,550,607) | ($33,687,612) | ($19,963,058) | ($26,235,102) | $30,904,514 |
Gain on exchange of convertible preferred stock in connection with recapitalization | 160,000,000 | ' | ' | 3,390,750 | ' | ' | 159,954,069 | ' | ' | ' | ' | ' | 3,390,750 | 159,954,069 | 159,954,069 | ' |
Less beneficial conversion charge | ' | ' | ' | ' | ' | ' | -377,787 | ' | ' | ' | ' | ' | ' | -377,787 | -377,787 | ' |
Less net income attributable to participating preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -139,077,495 | -132,609,918 | -30,878,445 |
Net loss attributable to common stockholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($48,545,630) | $535,729 | $731,262 | $26,069 |
Denominator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator for basic net income (loss) per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,995,167 | 2,937 | 3,328 | 1,089 |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee stock options (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,640 |
Series 3 convertible preferred stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,656 | 13,877 | ' |
Denominator for diluted net income (loss) per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,995,167 | 13,593 | 17,205 | 5,729 |
Net income per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $168 | ($5,992.61) | ($5,290.57) | $52.39 | ($14,140.93) | ($14,289.99) | ($5.40) | $182.41 | $219.76 | $23.95 |
Diluted (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $48.29 | ($5,992.61) | ($5,290.57) | $9.95 | ($14,140.93) | ($14,289.99) | ($5.40) | $39.41 | $42.50 | $4.55 |
Stock_option_plan_Details
Stock option plan (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Valuation assumptions | ' | ' | ' | ' |
Share-based compensation expense | $5,142,187 | $1,815,722 | $2,288,000 | $2,817,000 |
Stock options | ' | ' | ' | ' |
Number of options | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 42,394 | 46,794 | 46,794 | 39,557 |
Granted (in shares) | 2,007,713 | ' | 5,715 | 8,123 |
Exercised (in shares) | ' | ' | ' | -11 |
Forfeited (in shares) | -62,247 | ' | -10,115 | -875 |
Outstanding at the end of the period (in shares) | 1,987,860 | ' | 42,394 | 46,794 |
Exercisable at the end of the period (in shares) | 61,834 | ' | 33,414 | ' |
Exercisable and expected to vest at the end of the period (in shares) | ' | ' | 42,184 | ' |
Exercise price | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | $218.40 | $490.80 |
Weighted-average exercise price | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $469.48 | $532.80 | $532.80 | $547.20 |
Granted (in dollars per share) | $10.85 | ' | $218.40 | $490.80 |
Exercised (in dollars per share) | ' | ' | ' | $459.60 |
Forfeited (in dollars per share) | $17.10 | ' | $604.80 | $757.20 |
Outstanding at the end of the period (in dollars per share) | $20.44 | ' | $469.48 | $532.80 |
Exercisable at the end of the period (in dollars per share) | $290.39 | ' | $482.40 | ' |
Exercisable and expected to vest at the end of the period (in dollars per share) | ' | ' | $476.40 | ' |
Weighted-average remaining contractual term | ' | ' | ' | ' |
Outstanding at the end of the period | '9 years 6 months 4 days | ' | '5 years 7 days | '5 years 8 months 26 days |
Exercisable at the end of the period | '6 years 22 days | ' | '4 years 1 month 20 days | ' |
Exercisable and expected to vest at the end of the period | ' | ' | '4 years 11 months 19 days | ' |
Valuation assumptions | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 1.14% | 2.40% |
Expected volatility (as a percent) | ' | ' | 87.00% | 87.00% |
Expected dividend yield (as a percent) | 0.00% | ' | 0.00% | 0.00% |
Weighted average grant date fair value (in dollars per share) | $7.86 | ' | $160.65 | $364.80 |
Stock options | Minimum | ' | ' | ' | ' |
Stock option plan | ' | ' | ' | ' |
Vesting period | ' | ' | '3 years | ' |
Exercise price | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $218.40 | $226.80 | $226.80 | $226.80 |
Granted (in dollars per share) | $10.59 | ' | ' | ' |
Exercised (in dollars per share) | ' | ' | ' | $451.20 |
Forfeited (in dollars per share) | $10.85 | ' | $218.40 | $226.80 |
Outstanding at the end of the period (in dollars per share) | $10.59 | ' | $218.40 | $226.80 |
Exercisable at the end of the period (in dollars per share) | $10.59 | ' | $218.40 | ' |
Exercisable and expected to vest at the end of the period (in dollars per share) | ' | ' | $218.40 | ' |
Valuation assumptions | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | 0.85% | ' | ' | ' |
Expected volatility (as a percent) | 87.00% | ' | ' | ' |
Expected term | '5 years | ' | '6 years | '6 years |
Stock options | Maximum | ' | ' | ' | ' |
Stock option plan | ' | ' | ' | ' |
Vesting period | ' | ' | '4 years | ' |
Exercise price | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $1,149.60 | $1,149.60 | $1,149.60 | $1,149.60 |
Granted (in dollars per share) | $10.85 | ' | ' | ' |
Exercised (in dollars per share) | ' | ' | ' | $508.80 |
Forfeited (in dollars per share) | $1,149.60 | ' | $1,149.60 | $1,149.60 |
Outstanding at the end of the period (in dollars per share) | $1,149.60 | ' | $1,149.60 | $1,149.60 |
Exercisable at the end of the period (in dollars per share) | $1,149.60 | ' | $1,149.60 | ' |
Exercisable and expected to vest at the end of the period (in dollars per share) | ' | ' | $1,149.60 | ' |
Valuation assumptions | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | 1.69% | ' | ' | ' |
Expected volatility (as a percent) | 88.00% | ' | ' | ' |
Expected term | '6 years | ' | '6 years 3 months | '6 years 3 months |
2009 Stock Incentive Plan | Stock options | Minimum | ' | ' | ' | ' |
Stock option plan | ' | ' | ' | ' |
Stock options granted, exercise price as percentage of the fair market value of common stock at grant date | ' | ' | 100.00% | ' |
Stock options granted to stockholder with specified ownership percentage, exercise price as percentage of the fair market value of common stock at grant date | ' | ' | 110.00% | ' |
Stockholder's specified ownership percentage | ' | ' | 10.00% | ' |
2009 Stock Incentive Plan | Stock options | Maximum | ' | ' | ' | ' |
Stock option plan | ' | ' | ' | ' |
Expiration period | ' | ' | '10 years | ' |
2009 Stock Incentive Plan | Common stock | ' | ' | ' | ' |
Stock option plan | ' | ' | ' | ' |
Number of shares available for issuance | ' | ' | 14,271 | ' |
Stock_option_plan_Details_2
Stock option plan (Details 2) (1998 and 2009 Plans, USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
1998 and 2009 Plans | ' | ' |
Additional disclosures | ' | ' |
Unrecognized compensation cost | $2,213,000 | $4,005,000 |
Weighted average remaining service period for recognition of unrecognized compensation cost | '2 years 1 month 20 days | ' |
Collaborations_and_grants_Deta
Collaborations and grants (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2012 | Dec. 31, 2012 | Aug. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 31, 2008 | Nov. 30, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Jan. 02, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
Minimum | Maximum | Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Early stage collaboration and discovery agreements | Early stage collaboration and discovery agreements | Early stage collaboration and discovery agreements | Early stage collaboration and discovery agreements | Early stage collaboration and discovery agreements | Early stage collaboration and discovery agreements | Early stage collaboration and discovery agreements | |
Genzyme | Genzyme | Genzyme | Genzyme | Roche and SMA Foundation | Roche and SMA Foundation | Roche and SMA Foundation | Roche and SMA Foundation | Roche and SMA Foundation | item | Minimum | Maximum | Research and development event milestones | Sales milestones | |||||
item | Research and development event milestones | Sales milestones | Maximum | |||||||||||||||
Maximum | Maximum | |||||||||||||||||
Collaborations and grants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | $7,500,000 | ' | ' | $100,000,000 | $30,000,000 | ' | $30,000,000 | ' | ' | ' | $3,032,000 | $7,232,000 | ' | ' | ' | ' |
Selling price of undelivered agreements | ' | ' | 8,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue recognized | ' | ' | 79,000,000 | ' | ' | ' | ' | 13,417,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration revenue recognized | ' | ' | ' | 3,756,000 | 90,012,000 | ' | ' | 18,405,000 | 2,072,000 | ' | ' | ' | 6,618,000 | 6,878,000 | ' | ' | ' | ' |
Number of compounds in preclinical development | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of significant deliverables | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Additional consideration receivable upon achievement of specified events | ' | ' | ' | ' | ' | ' | $30,000,000 | ' | ' | $135,000,000 | $325,000,000 | ' | ' | ' | ' | ' | $143,000,000 | $252,000,000 |
Research period for applying technology | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | '3 years | '4 years | ' | ' |
Grant revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of grant program | '2 years | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_taxes_Details
Income taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Reconciliation of the U.S. statutory income tax rate to the entity's effective tax rate | ' | ' |
Federal income tax (benefit) at statutory rate (as a percent) | 34.00% | 34.00% |
State income tax benefit, net of federal benefit (as a percent) | 3.80% | 4.20% |
Other (as a percent) | -2.00% | -1.60% |
Increase to valuation allowance (as a percent) | -35.80% | -45.90% |
Effective income tax rate (as a percent) | 0.00% | -9.30% |
Tax benefit on sale of net operating losses and research and development credits in the New Jersey Transfer Program | ' | $2,300,000 |
Deferred tax assets: | ' | ' |
Amortization | 91,871 | 103,355 |
Depreciation | 1,535,952 | 1,196,569 |
Accrued expense | 1,208,846 | 321,925 |
Deferred revenue | 6,962,506 | 15,738,180 |
Federal tax credits | 5,383,092 | 5,734,074 |
State tax credits | 1,094,833 | 1,495,773 |
Federal net operating losses | 71,752,278 | 56,074,019 |
State net operating losses | 7,619,606 | 5,024,189 |
Capitalized research and development costs | 10,479,055 | 11,184,849 |
Other | 742,341 | 600,059 |
Total gross deferred tax assets | 106,870,380 | 97,472,992 |
Less valuation allowance | -106,870,380 | -97,472,992 |
Net deferred tax assets | $0 | $0 |
Income_taxes_Details_2
Income taxes (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Income taxes | ' | ' |
Change in valuation allowance | $9,397,000 | $12,909,000 |
Federal | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards | 211,036,000 | ' |
State | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards | $128,276,000 | ' |
Income_taxes_Details_3
Income taxes (Details 3) (USD $) | Dec. 31, 2012 |
Federal | ' |
Credit carryforwards | ' |
Credit carryforwards | $5,383,000 |
State | ' |
Credit carryforwards | ' |
Credit carryforwards | $1,546,000 |
Income_taxes_Details_4
Income taxes (Details 4) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Operating loss carryforwards | ' | ' |
Receivable for operating loss carryforwards sold under the Transfer program | ' | $2,305,576 |
U.S. federal income tax rate (as a percent) | 34.00% | 34.00% |
Unrecognized income tax benefits | 0 | ' |
State | ' | ' |
Operating loss carryforwards | ' | ' |
Net operating loss carryforwards sold under the Technology Business Tax Certificate Transfer Program | ' | $28,463,900 |
Commitments_and_contingencies_1
Commitments and contingencies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
Commitments and contingencies | ' | ' |
Rent expense | $739,000 | $735,000 |
Future minimum lease payments | ' | ' |
2013 | 879,000 | ' |
2014 | 849,000 | ' |
2015 | 849,000 | ' |
2016 | 849,000 | ' |
2017 | 849,000 | ' |
Thereafter | 1,113,000 | ' |
Total future minimum lease payments | 5,388,000 | ' |
Funding agreement | Wellcome Trust | Maximum | ' | ' |
Other contingencies | ' | ' |
Development and regulatory milestone payments which the entity may be obligated to pay | $68,900,000 | ' |
401k_plan_Details
401(k) plan (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
401(k) plan | ' | ' |
Matching contribution up to the first 5% of employee's base salary (as a percent) | 20.00% | ' |
Percentage of employee's base salary, matched by employer | 5.00% | ' |
Expense recorded | $154,000 | $177,000 |
Subsequent_events_Details
Subsequent events (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||
Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 05, 2013 | Mar. 05, 2013 | Mar. 07, 2013 | 31-May-13 | Mar. 07, 2013 | Jun. 30, 2013 | Mar. 05, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Jun. 30, 2013 | Feb. 28, 2013 | Mar. 07, 2013 | Mar. 05, 2013 | Mar. 05, 2013 | Mar. 05, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Mar. 05, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Feb. 28, 2013 | Mar. 07, 2013 | |
Restricted stock | Stock options | Stock options | Stock options | 2013 Stock Incentive Plan | 2013 Stock Incentive Plan | Series Four | Series Four | Common stock | Common stock | Common stock | Series Five | Series Five | Series Four and Series Five Convertible Preferred Stock | Convertible promissory notes | Convertible promissory notes | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||
Restricted stock | Stock options | 2013 Stock Incentive Plan | Warrants | Series Four | 2013 Stock Incentive Plan | 2013 Stock Incentive Plan | 2013 Stock Incentive Plan | Series Four | Common stock | Common stock | Series Five | Series Five | Series Four and Series Five Convertible Preferred Stock | Convertible promissory notes | Convertible promissory notes | ||||||||||||||
Restricted stock | Stock options | 2013 Stock Incentive Plan | Warrants | Series Four | |||||||||||||||||||||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of convertible promissory notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,000,000 | ' |
Aggregate gross proceeds | $29,354,752 | $29,354,752 | ' | ' | ' | ' | ' | ' | $54,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $54,000,000 | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon conversion of convertible promissory notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 502,919 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 502,919 |
Reverse stock split ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.0083 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.0083 | ' | ' | ' | ' | ' | ' |
Shares issued and sold | ' | ' | ' | ' | ' | ' | ' | ' | 4,497,035 | 375,000 | ' | 9,627,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,497,035 | ' | ' | 6,700,487 | 2,095,515 | ' | ' | ' |
Number of shares issued upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,700,487 | 2,095,515 | 14,170,956 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Number of shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 739,937 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 739,937 | ' | ' | ' | ' | ' |
Number of shares of restricted stock granted | ' | ' | 1,131,524 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 735,324 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares granted | ' | ' | ' | 2,007,713 | 5,715 | 8,123 | 735,324 | 4,613 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,613 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of additional shares available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selected_quarterly_financial_d2
Selected quarterly financial data (unaudited) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||
Jul. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 07, 2013 | Mar. 07, 2013 | |
Common stock | Subsequent event | |||||||||||||||||
Common stock | ||||||||||||||||||
Selected quarterly financial data (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.0083 | 0.0083 |
Selected quarterly financial data (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration and grant revenue | ' | $16,289,573 | $6,854,212 | $7,141,664 | $6,640,090 | $7,195,076 | $7,585,177 | $12,525,720 | $9,362,686 | $86,423,733 | $4,772,720 | $4,853,008 | $30,285,449 | $27,305,973 | $33,946,063 | $105,412,147 | ' | ' |
Operating expenses | ' | 20,565,188 | 21,307,148 | 15,718,073 | 12,674,520 | 14,250,383 | 15,083,384 | 18,745,957 | 16,983,976 | 18,315,064 | 19,682,313 | 19,848,797 | 57,590,409 | 48,079,724 | 60,754,244 | 74,830,150 | ' | ' |
Income (loss) from operations | ' | -4,275,615 | -14,452,936 | -8,576,409 | -6,034,430 | -7,055,307 | -7,498,207 | -6,220,237 | -7,621,290 | 68,108,669 | -14,909,593 | -14,995,789 | -27,304,960 | -20,773,751 | -26,808,181 | 30,581,997 | ' | ' |
Net income (loss) | ' | -4,416,499 | -14,586,578 | -14,684,535 | -6,272,044 | -7,297,125 | -6,068,072 | -6,597,861 | -5,764,646 | 67,608,165 | -15,388,398 | -15,550,607 | -33,687,612 | -19,963,058 | -26,235,102 | 30,904,514 | ' | ' |
Gain on exchange of convertible preferred stock in connection with recapitalization | 160,000,000 | ' | ' | 3,390,750 | ' | ' | 159,954,069 | ' | ' | ' | ' | ' | 3,390,750 | 159,954,069 | 159,954,069 | ' | ' | ' |
Less beneficial conversion charge | ' | ' | ' | ' | ' | ' | -377,787 | ' | ' | ' | ' | ' | ' | -377,787 | -377,787 | ' | ' | ' |
Net income (loss) attributable to common stockholders | ' | ($4,416,499) | ($14,586,578) | ($29,542,553) | ($6,372,044) | ($7,297,125) | $153,508,210 | ($6,597,861) | ' | ' | ' | ' | ($48,545,630) | $139,613,224 | $133,341,180 | $30,904,514 | ' | ' |
Basic net income (loss) attributable to common stockholders per share (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $168 | ($5,992.61) | ($5,290.57) | $52.39 | ($14,140.93) | ($14,289.99) | ($5.40) | $182.41 | $219.76 | $23.95 | ' | ' |
Diluted net income (loss) attributable to common stockholders per share (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $48.29 | ($5,992.61) | ($5,290.57) | $9.95 | ($14,140.93) | ($14,289.99) | ($5.40) | $39.41 | $42.50 | $4.55 | ' | ' |
Balance_sheets1
Balance sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $24,044,819 | $2,725,702 |
Marketable securities | 133,182,565 | ' |
Prepaid expenses and other current assets | 2,126,575 | 855,750 |
Grant and collaboration receivables, net | 783,851 | 1,013,813 |
Total current assets | 160,137,810 | 4,595,265 |
Fixed assets, net | 6,942,956 | 8,280,037 |
Deposits and other assets | 163,349 | 197,050 |
Total assets | 167,244,115 | 13,072,352 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 10,205,493 | 7,023,971 |
Current portion of long-term debt | 84,234 | 4,444,171 |
Deferred revenue | 3,631,430 | 16,690,747 |
Total current liabilities | 13,921,157 | 28,158,889 |
Deferred revenue, less current portion | ' | 741,667 |
Long-term debt, less current portion | ' | 438,810 |
Other long-term liabilities | 2,290,445 | 2,549,719 |
Total liabilities | 16,211,602 | 31,889,085 |
Stockholders' (deficit) equity: | ' | ' |
Common stock, $0.001 par value. Authorized 17,000,000 shares; issued and outstanding 4,526 shares at December 31, 2012. Authorized 125,000,000 shares; issued and outstanding 23,803,282 shares at September 30, 2013 | 24,344 | 545 |
Additional paid-in capital | 461,960,966 | 177,583,672 |
Accumulated other comprehensive loss | -40,467 | ' |
Accumulated deficit | -310,912,330 | -277,224,718 |
Total stockholders' (deficit) equity | 151,032,513 | -99,640,501 |
Total liabilities, convertible preferred stocks and stockholders' (deficit) equity | 167,244,115 | 13,072,352 |
Series One convertible preferred stock | ' | ' |
Stockholders' (deficit) equity: | ' | ' |
Preferred stock | ' | 62,263,852 |
Series Two convertible preferred stock | ' | ' |
Stockholders' (deficit) equity: | ' | ' |
Preferred stock | ' | 18,182,129 |
Series Three convertible preferred stock | ' | ' |
Stockholders' (deficit) equity: | ' | ' |
Preferred stock | ' | 377,787 |
Preferred stock | ' | ' |
Stockholders' (deficit) equity: | ' | ' |
Preferred stock | ' | ' |
Balance_sheets_Parenthetical1
Balance sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 |
Common stock, Authorized shares | 125,000,000 | 17,000,000 | 216,666 |
Common stock, issued shares | 23,803,282 | 4,526 | 1,083 |
Common stock, outstanding shares | 23,803,282 | 4,526 | 1,083 |
Series One convertible preferred stock | ' | ' | ' |
Preferred stock, designated shares | ' | 2,000,000 | ' |
Preferred stock, issued shares | ' | 1,483,337 | ' |
Preferred stock, outstanding shares | ' | 1,483,337 | ' |
Series Two convertible preferred stock | ' | ' | ' |
Preferred stock, designated shares | ' | 13,750,000 | ' |
Preferred stock, issued shares | ' | 10,701,405 | ' |
Preferred stock, outstanding shares | ' | 10,701,405 | ' |
Series Three convertible preferred stock | ' | ' | ' |
Preferred stock, designated shares | ' | 13,750,000 | ' |
Preferred stock, issued shares | ' | 2,853,517 | ' |
Preferred stock, outstanding shares | ' | 2,853,517 | ' |
Preferred stock | ' | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 |
Preferred stock, designated shares | ' | 156,995,095 | 156,995,095 |
Preferred stock, undesignated shares | 5,000,000 | ' | ' |
Preferred stock, issued shares | 0 | ' | ' |
Preferred stock, outstanding shares | 0 | ' | ' |
Statements_of_operations1
Statements of operations (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jul. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $27,395,315 | $22,860,543 | $28,779,078 | $98,960,851 |
Grant revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,890,134 | 4,445,430 | 5,166,985 | 6,451,296 |
Total revenues and non-cash cancellation revenue | ' | 16,289,573 | 6,854,212 | 7,141,664 | 6,640,090 | 7,195,076 | 7,585,177 | 12,525,720 | 9,362,686 | 86,423,733 | 4,772,720 | 4,853,008 | 30,285,449 | 27,305,973 | 33,946,063 | 105,412,147 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Research and development | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 39,855,115 | 36,688,786 | 46,138,868 | 58,677,081 |
General and administrative | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,735,294 | 11,390,938 | 14,615,376 | 16,153,069 |
Total operating expenses | ' | 20,565,188 | 21,307,148 | 15,718,073 | 12,674,520 | 14,250,383 | 15,083,384 | 18,745,957 | 16,983,976 | 18,315,064 | 19,682,313 | 19,848,797 | 57,590,409 | 48,079,724 | 60,754,244 | 74,830,150 |
Loss from operations | ' | -4,275,615 | -14,452,936 | -8,576,409 | -6,034,430 | -7,055,307 | -7,498,207 | -6,220,237 | -7,621,290 | 68,108,669 | -14,909,593 | -14,995,789 | -27,304,960 | -20,773,751 | -26,808,181 | 30,581,997 |
Interest (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,249,534 | -1,007,586 | -1,209,577 | -2,444,417 |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -129,963 | ' | ' | ' |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,155 | 1,818,279 | 1,782,656 | 461,358 |
Net loss | ' | -4,416,499 | -14,586,578 | -14,684,535 | -6,272,044 | -7,297,125 | -6,068,072 | -6,597,861 | -5,764,646 | 67,608,165 | -15,388,398 | -15,550,607 | -33,687,612 | -19,963,058 | -26,235,102 | 30,904,514 |
Deemed dividend | ' | 4,416,499 | ' | 18,248,768 | ' | 7,297,125 | ' | ' | ' | ' | ' | ' | -18,248,768 | ' | ' | ' |
Gain on exchange of convertible preferred stock in connection with recapitalization | 160,000,000 | ' | ' | 3,390,750 | ' | ' | 159,954,069 | ' | ' | ' | ' | ' | 3,390,750 | 159,954,069 | 159,954,069 | ' |
Less beneficial conversion charge | ' | ' | ' | ' | ' | ' | -377,787 | ' | ' | ' | ' | ' | ' | -377,787 | -377,787 | ' |
Net (loss) income attributable to common stockholders | ' | ($4,416,499) | ($14,586,578) | ($29,542,553) | ($6,372,044) | ($7,297,125) | $153,508,210 | ($6,597,861) | ' | ' | ' | ' | ($48,545,630) | $139,613,224 | $133,341,180 | $30,904,514 |
Weighted-average shares outstanding: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,995,167 | 2,937 | 3,328 | 1,089 |
Weighted-average shares outstanding: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Diluted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,995,167 | 13,593 | 17,205 | 5,729 |
Net (loss) income per share applicable to common stockholders-basic (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $168 | ($5,992.61) | ($5,290.57) | $52.39 | ($14,140.93) | ($14,289.99) | ($5.40) | $182.41 | $219.76 | $23.95 |
Net (loss) income per share applicable to common stockholders-diluted (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $48.29 | ($5,992.61) | ($5,290.57) | $9.95 | ($14,140.93) | ($14,289.99) | ($5.40) | $39.41 | $42.50 | $4.55 |
Pro forma net income per share applicable to common stockholders-(unaudited) (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2.73 | ' | $9.40 | ' |
Pro forma weighted-average number of shares outstanding (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,812,651 | ' | 14,188,161 | ' |
Statements_of_comprehensive_lo
Statements of comprehensive loss (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Statements of comprehensive loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ($4,416,499) | ($14,586,578) | ($14,684,535) | ($6,272,044) | ($7,297,125) | ($6,068,072) | ($6,597,861) | ($5,764,646) | $67,608,165 | ($15,388,398) | ($15,550,607) | ($33,687,612) | ($19,963,058) | ($26,235,102) | $30,904,514 |
Other comprehensive loss: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized loss on marketable securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -40,467 | ' | ' | -3,606 |
Comprehensive loss | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($33,728,079) | ($19,963,058) | ($26,235,102) | $30,900,908 |
Statements_of_cash_flows1
Statements of cash flows (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Cash flows from operating activities | ' | ' | ' |
Net loss | ($33,687,612) | ($19,963,058) | ($26,235,102) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation | 1,810,850 | 2,048,682 | 2,704,151 |
Change in valuation of warrant liability | 3,158 | -1,818,279 | -1,782,655 |
Non-cash interest expense | 6,048,580 | 204,422 | 225,730 |
Loss on extinguishment of debt | 129,963 | ' | ' |
Share-based compensation expense | 5,142,187 | 1,815,722 | 2,288,392 |
Changes in operating assets and liabilities: | ' | ' | ' |
Prepaid expenses and other current assets | -1,287,875 | 2,250,089 | 2,452,430 |
Grant and collaboration receivables | 229,962 | 75,698 | 230,315 |
Deposits and other assets | 33,699 | 24,399 | 83,817 |
Accounts payable and accrued expenses | 3,181,522 | -4,748,005 | -6,025,483 |
Other long-term liabilities | -262,432 | -68,432 | 102,757 |
Deferred revenue | -13,800,984 | -16,711,980 | -21,972,143 |
Net cash used in operating activities | -32,458,982 | -36,890,742 | -47,927,791 |
Cash flows from investing activities | ' | ' | ' |
Purchases of fixed assets | -473,769 | -183,511 | -188,681 |
Purchases of marketable securities | -139,730,579 | ' | ' |
Maturities of marketable securities | 6,507,547 | ' | ' |
Net cash used in investing activities | -133,696,801 | -183,511 | -188,681 |
Cash flows from financing activities | ' | ' | ' |
Payments on long-term debt | -4,960,151 | -6,240,116 | -6,943,988 |
Net proceeds from sale of Series One convertible preferred stock | ' | 29,354,752 | 29,354,752 |
Net proceeds from sale of Series Four convertible preferred stock | 60,785,363 | ' | ' |
Net proceeds from initial public offering | 131,649,688 | ' | ' |
Net cash provided by financing activities | 187,474,900 | 23,114,636 | 22,410,764 |
Net (decrease) increase in cash and cash equivalents | 21,319,117 | -13,959,617 | -25,705,708 |
Cash and cash equivalents, beginning of period | 2,725,702 | 28,431,410 | 28,431,410 |
Cash and cash equivalents, end of period | 24,044,819 | 14,471,793 | 2,725,702 |
Supplemental disclosure of cash information | ' | ' | ' |
Cash paid for interest | 365,589 | 1,009,478 | 1,211,764 |
Supplemental disclosures of non-cash information related to investing and financing activities | ' | ' | ' |
Change in unrealized loss on marketable securities | -40,467 | ' | ' |
Change in carry value of preferred securities resulting from recapitalization | $3,390,750 | $159,576,282 | $159,954,069 |
The_Company1
The Company | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
The Company | ' | ' |
The Company | ' | ' |
1. The Company | 1. The Company | |
PTC Therapeutics, Inc. (the Company or PTC) was incorporated as a Delaware corporation on March 31, 1998. The Company is a biopharmaceutical company focused on the discovery and development of orally administered, proprietary small-molecule drugs that target post-transcriptional control processes. | PTC Therapeutics, Inc. (the Company or PTC) was incorporated as a Delaware corporation on March 31, 1998. The Company is a biopharmaceutical company focused on the discovery and development of orally administered, proprietary small-molecule drugs that target post-transcriptional control processes. | |
The Company has devoted substantially all of its efforts to research and development, including clinical trials. The Company has not completed development of any drugs. The Company has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from other companies. As of September 30, 2013, the Company had an accumulated deficit of approximately $310.9 million. The Company has financed its operations to date primarily through the issuance and sale of its common stock in its initial public offering (see note 7 below), private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by the Company's product candidates. The Company believes that its existing cash, cash equivalents, including the Company's net proceeds from its initial public offering of common stock, and marketable securities provide for sufficient resources to fund its currently planned operations through the fourth quarter of 2015. | The Company has devoted substantially all of its efforts to research and development, including clinical trials. The Company has not completed development of any drugs. The Company has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from other companies. As of December 31, 2012, the Company had an accumulated deficit of approximately $277.2 million. The Company has financed its operations to date primarily through private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support. The Company will need to obtain additional funding in connection with its ongoing operations. Additional financing may not be available to the Company. If the Company is unable to raise capital when needed or on attractive terms, the Company could be forced to delay, reduce or eliminate its research and development programs or any future commercialization efforts. As more fully described in Note 7, the Company completed a recapitalization of its outstanding convertible preferred stock in 2012 to enable the Company to raise additional capital. | |
Use of estimates | ||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Summary_of_significant_account6
Summary of significant accounting policies | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Summary of significant accounting policies | ' | ' | ||
Summary of significant accounting policies | ' | ' | ||
2. Summary of significant accounting policies | 2. Summary of significant accounting policies | |||
The Company's complete listing of significant accounting policies are described in note 2 of the notes to the Company's audited financial statements as of December 31, 2012 included in the final prospectus dated June 19, 2013 related to the Company's initial public offering. | Unaudited pro forma presentation | |||
Unaudited pro forma presentation | Unaudited pro forma net income per share is computed using the weighted-average number of common shares outstanding after giving effect to the pro forma effect of the conversion of all convertible preferred stock during the year ended December 31, 2012 into shares of the Company's common stock as if such conversion had occurred at the beginning of the period presented. | |||
Unaudited pro forma net loss per share is computed using the weighted-average number of common shares outstanding after giving effect to the pro forma effect of the conversion of all convertible preferred stock during the period ended September 30, 2013 into shares of the Company's common stock as if such conversion had occurred at the beginning of the period presented. | Segment and geographic information | |||
Basis of presentation | Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment. | |||
The accompanying financial information as of September 30, 2013 and for the nine months ended September 30, 2012 and 2013 has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company's audited financial statements as of December 31, 2012 and notes thereto included in the final prospectus related to the Company's initial public offering. | Accounting changes | |||
In the opinion of management, the unaudited financial information as of September 30, 2013 and the nine months ended September 30, 2012 and 2013 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the nine month period ended September 30, 2013 is not necessarily indicative of the results to be expected for the year ended December 31, 2013 or for any other interim period or for any other future year. | Effective January 1, 2012, an update to an accounting standard was issued that requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update was applied retrospectively. The Company adopted this pronouncement and elected to present a separate statement of comprehensive income. The updated standard does not change the items that must be reported in comprehensive income, how such items are measure, or when they must be reclassified to net income. | |||
Use of estimates | Cash equivalents | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | The Company considers all highly liquid investments with a maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents are carried at cost which approximates fair value due to their short-term nature. | |||
Reverse stock split | Fixed assets | |||
On March 7, 2013, the Company effected a one-for-120 reverse stock split of its common stock, pursuant to which each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All common stock share and per share references in the financial statements and notes thereto have been restated to reflect the reverse stock split on a retroactive basis. | Fixed assets are stated at cost. Depreciation is computed starting when the asset is placed into service on a straight-line basis over the estimated useful life of the related asset as follows: | |||
Marketable securities | ||||
Management determines the classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Marketable securities are classified as available-for-sale and carried at fair value, with any unrealized gain or loss recorded as a separate component of stockholders' (deficit) equity. | Leasehold improvements | Lesser of useful life or lease term | ||
Computer equipment and software | 3 years | |||
Revenue recognition | Furniture, fixtures, and lab equipment | 3 to 7 years | ||
The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | ||||
Grant and collaboration receivables | ||||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | ||||
The Company records receivables in conjunction with grant and collaboration agreements when the services have been performed. The Company will record an allowance for bad debt if receivables are anticipated to be uncollectible. There is no indication that any receivables are uncollectible as of December 31, 2011 and 2012. Write-offs of receivables have historically been insignificant. | ||||
The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | ||||
Concentration of risks | ||||
For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | ||||
The Company has no significant off-balance-sheet risk or credit risk concentrations. The Company maintains its cash and cash equivalents with various financial institutions. The Company maintains cash accounts that may at times exceed the federally insured limit; however, it has not experienced and does not anticipate experiencing any credit losses from maintaining cash accounts in excess of such limits. | ||||
For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | ||||
The Company's revenues from its two largest collaboration partners and its largest grant as a percentage of total revenues were 85%, 8%, and 3%, respectively, for 2011 and were 67%, 11%, and 9%, respectively, for 2012. | ||||
The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from its activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. | ||||
Reverse stock split | ||||
The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | ||||
As a result of the one-for-120 reverse stock split that was effected on March 7, 2013, each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All references to common stock have been restated to reflect the reverse stock split on a retroactive basis. | ||||
Fair value of financial instruments | ||||
Deferred rent | ||||
The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | ||||
The Company has an operating lease for office space. Rent expense is recorded on a straight-line basis over the initial lease term. The difference between the actual cash paid and the straight-line rent expense is recorded as deferred rent. Leasehold improvements made related to this lease, subsequent to its inception, are amortized over the remaining lease term. | ||||
• | ||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | Revenue recognition | |||
• | The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | |||
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability | ||||
The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | ||||
(i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | ||||
The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | ||||
• | ||||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | |||
Cash equivalents are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables, accounts payable and accrued expenses, and debt approximates fair value due to the short-term nature of those instruments. | For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this new guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | |||
Warrant liability | The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. | |||
Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain (loss) on warrant valuation each reporting period in Other income (expense), net on the Company's statement of operations. | The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | |||
Share-based compensation | Research and development costs | |||
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. For service type awards, share-based compensation expense is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. For awards that vest or begin vesting upon achievement of a performance condition, the Company estimates the likelihood of satisfaction of the performance condition and recognizes compensation expense when achievement of the performance condition is deemed probable using an accelerated attribution model. | Research and development expenses include the clinical development costs associated with the Company's product development programs and research and development costs associated with the Company's discovery programs. These expenses include internal research and development costs and the costs of research and development conducted on behalf of the Company by third parties, including sponsored university-based research agreements and clinical study vendors. All research and development costs are expensed as incurred. Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses. | |||
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions, such as expected volatility and expected term. As a new public company, the Company does not have sufficient history to estimate the volatility of its common stock price or the expected life of the options. The Company calculates expected volatility based on reported data for similar publicly traded companies for which historical information is available and will continue to do so until the historical volatility of its common stock is sufficient to measure expected volatility for future option grants. | Nonrefundable advance payments made for goods and services that will be used in future research and development activities are deferred if the contracted party has not yet performed the related activities. The amount deferred is then recognized as expense when the research and development activities are performed. The Company has deferred research and development advance payments of approximately $245,000 and $228,000 as of December 31, 2011 and 2012, respectively. | |||
Fair value of financial instruments | ||||
The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establishes a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | ||||
• | ||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | ||||
• | ||||
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | ||||
• | ||||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | ||||
Cash equivalents and investments are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables and accounts payable and accrued expenses approximates fair value due to the short-term nature of those instruments. | ||||
Beneficial conversion | ||||
When the Company issues a debt or an equity security that is convertible into common stock at a discount from the fair value of the common stock at the date the debt or equity security counterparty is legally committed to purchase such a security (Commitment Date), a beneficial conversion charge is measured and recorded on the Commitment Date for the difference between the fair value of the Company's common stock and the effective conversion price of the convertible debt or equity security. If the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible debt or equity security, the amount of the discount assigned to the beneficial conversion feature is limited to the amount of the proceeds allocated to the convertible debt or equity security. | ||||
The amount allocated to the beneficial conversion feature is presented as a discount or reduction to the related debt security or as an immediate charge to earnings available to common shareholders for convertible preferred stock instruments that are convertible by the shareholders at any time. In connection with the Company's recapitalization of its outstanding convertible preferred stock in 2012, the Company recorded a beneficial conversion charge representing the difference between the effective conversion price and the fair value of the Company's common stock as of the Commitment Date. Because the intrinsic value was in excess of the proceeds allocated to the Company's new Series Three convertible preferred stock; the beneficial conversion charge was limited to the allocated proceeds of approximately $377,000. | ||||
Warrant liability | ||||
Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain/(loss) on warrant valuation each reporting period in Other income on the Company's statement of operations. | ||||
Impairment of long-lived assets | ||||
The Company monitors its long-lived assets for indicators of impairment. If such indicators are present, the Company assesses the recoverability of affected assets by determining whether the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found not to be recoverable, the Company measures the amount of such impairment by comparing the carrying value of the assets to the fair value of the assets, with the fair value generally determined based on the present value of the expected future cash flows associated with the assets. Although current and historical negative cash flows are indicators of impairment, management believes the future cash flows to be received from the long-lived assets and the potential success of the Company's research programs will exceed the assets' carrying value, and accordingly, the Company believes that no impairment of long-lived assets exists as of December 31, 2012. | ||||
Share-based compensation | ||||
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. | ||||
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions such as stock price, expected volatility and expected term. The Company's estimates of these assumptions are primarily based on third-party valuations, historical data, peer company data and judgment regarding future trends and factors. | ||||
The Company utilized various valuation methodologies in accordance with the framework of the 2004 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its stock. The methodologies included an option pricing method to estimate the Company's underlying equity value, and a methodology that determined an estimated value under an initial public offering (IPO) scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology includes estimates and assumptions that require the Company's judgment. These estimates include assumptions regarding future performance, including the completion of clinical trials and the time to complete an IPO or sale of the Company. As with any valuation, significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date. | ||||
Income taxes | ||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more likely than not that all or a portion of the net deferred tax assets will be realized. | ||||
Net income per share | ||||
Basic net income per share is calculated by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net income per share is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of convertible preferred stock and options outstanding under the Company's stock option plans. | ||||
Fair_value_of_financial_instru4
Fair value of financial instruments and marketable securities | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Fair value of financial instruments and marketable securities | ' | ' | |||||||||||||||||||||||
Fair value of financial instruments and marketable securities | ' | ' | |||||||||||||||||||||||
3. Fair value of financial instruments and marketable securities | 3. Fair value of financial instruments and investments | ||||||||||||||||||||||||
Fair value of certain marketable securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. | Fair value of certain investments is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the year. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. | ||||||||||||||||||||||||
The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. | The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. As of December 31, 2011, the Company deemed its unrealized losses not to be other-than-temporary. | ||||||||||||||||||||||||
The following represents the fair value using the hierarchy described in Note 2 for the Company's financial assets that are required to be measured at fair value on a recurring basis as of December 31, 2012 and September 30, 2013: | The following represents the fair value using the hierarchy described in Note 2 for the Company's financial assets that are required to be measured at fair value on a recurring basis as of December 31, 2011 and 2012: | ||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Warrant liability | $ | 95,661 | $ | — | $ | — | $ | 95,661 | Warrant liability | $ | 1,878,316 | $— | $— | $1,878,316 | |||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Marketable securities | $ | 133,182,565 | $ | — | $ | 133,182,565 | $ | — | Warrant liability | $ | 95,661 | $— | $— | $95,661 | |||||||||||
Warrant liability | 98,819 | — | — | 98,819 | |||||||||||||||||||||
Level 3 valuation | |||||||||||||||||||||||||
The following is a summary of marketable securities accounted for as available-for-sale securities at September 30, 2013: | |||||||||||||||||||||||||
The warrant liability is classified in Other long-term liabilities on the Company's balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other income on the Company's statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. | |||||||||||||||||||||||||
The table presented below is a summary of changes in the fair value of the Company's Level 3 valuation for warrant liability for the years ended December 31, 2011 and 2012: | |||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||
Gross Unrealized | |||||||||||||||||||||||||
Amortized | Fair | ||||||||||||||||||||||||
Cost | Gains | Losses | Value | Level 3 assets | |||||||||||||||||||||
Commercial paper | $ | 24,978,703 | $ | 20,527 | $ | — | $ | 24,999,230 | Beginning balance January 1, 2011 | $ | 2,340,263 | ||||||||||||||
U.S. corporate debt securities | 108,244,329 | 19,642 | (80,636 | ) | 108,183,335 | Change in fair value of warrant liability | (461,947 | ) | |||||||||||||||||
$ | 133,223,032 | $ | 40,169 | $ | (80,636 | ) | $ | 133,182,565 | Ending balance as of December 31, 2011 | 1,878,316 | |||||||||||||||
Change in fair value of warrant liability | (1,782,655 | ) | |||||||||||||||||||||||
At September 30, 2013, the Company held securities with an unrealized loss position that were not considered to be other-than-temporarily impaired as the Company has the ability to hold such investments until recovery of their fair value. | Ending balance as of December 31, 2012 | $ | 95,661 | ||||||||||||||||||||||
Marketable securities on the balance sheet at September 30, 2013 mature as follows: | |||||||||||||||||||||||||
Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the preferred stock value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of December 31, 2011 include (i) volatility (88%), (ii) risk free interest rate (0.25%-1.62%), (iii) strike price ($7.26-$16.00), (iv) fair value of preferred shares ($16) and (v) expected life (2-8 years). The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of December 31, 2012 include (i) volatility (87%), (ii) risk free interest rate (0.16%-1.18%), (iii) strike price ($16), (iv) fair value of preferred shares ($2.35) and (v) expected life (1-7 years). The fair value of the preferred shares declined significantly due to the recapitalization of the Company's outstanding convertible preferred stock in June 2012 as described in Note 7. | |||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||
Less than | More than | ||||||||||||||||||||||||
12 Months | 12 Months | ||||||||||||||||||||||||
Commercial paper | $ | 24,999,230 | $ | — | |||||||||||||||||||||
U.S. corporate debt securities | 57,824,657 | 50,358,678 | |||||||||||||||||||||||
Total Marketable securities | $ | 82,823,887 | $ | 50,358,678 | |||||||||||||||||||||
There were no marketable securities as of December 31, 2012. | |||||||||||||||||||||||||
Level 3 valuation | |||||||||||||||||||||||||
The warrant liability is classified in Other long-term liabilities on the Company's balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other income (expense), net on the Company's statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. | |||||||||||||||||||||||||
The table presented below is a summary of changes in the fair value of the Company's Level 3 valuation for warrant liability for the period ended September 30, 2013: | |||||||||||||||||||||||||
Level 3 assets | |||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | $ | 95,661 | |||||||||||||||||||||||
Warrants issued in connection with convertible promissory notes | 6,000,000 | ||||||||||||||||||||||||
Deemed dividend | 18,248,768 | ||||||||||||||||||||||||
Exercise of warrants issued in connection with convertible promissory notes | (24,248,765 | ) | |||||||||||||||||||||||
Change in fair value of warrant liability | 3,155 | ||||||||||||||||||||||||
Ending balance as of September 30, 2013 | $ | 98,819 | |||||||||||||||||||||||
Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the stock fair value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of December 31, 2012 include (i) volatility (87%), (ii) risk free interest rate (0.16%-1.18%), (iii) strike price ($16), (iv) fair value of preferred shares ($2.35), and (v) expected life (1-7 years). The significant assumptions used in preparing the option pricing model for valuing the Company's warrants as of September 30, 2013 include (i) volatility (69-87%), (ii) risk free interest rate (0.02%-1.705%), (iii) strike price ($128), (iv) fair value of common shares ($21.46), and (v) expected life (.22-5.98 years). See Note 7 for a description of the warrants issued in connection with the convertible notes. | |||||||||||||||||||||||||
Other_comprehensive_income_los
Other comprehensive income (loss) and accumulated other comprehensive items | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other comprehensive income (loss) and accumulated other comprehensive items | ' | |||||||
Other comprehensive income (loss) and accumulated other comprehensive items | ' | |||||||
4. Other comprehensive income (loss) and accumulated other comprehensive items | ||||||||
Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), such as unrealized gains and losses on marketable securities. | ||||||||
The following table summarizes other comprehensive loss and the changes in accumulated other comprehensive items for the nine months ended September 30, 2013: | ||||||||
Unrealized losses | Total | |||||||
on marketable | accumulated | |||||||
securities | other | |||||||
comprehensive | ||||||||
items | ||||||||
Balance at December 31, 2012 | $ | — | $ | — | ||||
Other comprehensive loss before reclassifications | (40,467 | ) | (40,467 | ) | ||||
Amounts reclassified from other comprehensive items | — | — | ||||||
Other comprehensive loss | (40,467 | ) | (40,467 | ) | ||||
Balance at September 30, 2013 | $ | (40,467 | ) | $ | (40,467 | ) | ||
Accounts_payable_and_accrued_e3
Accounts payable and accrued expenses | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Accounts payable and accrued expenses | ' | ' | ||||||||||||||
Accounts payable and accrued expenses | ' | ' | ||||||||||||||
5. Accounts payable and accrued expenses | 5. Accounts payable and accrued expenses | |||||||||||||||
Accounts payable and accrued expenses at December 31, 2012 and September 30, 2013 consist of the following: | Accounts payable and accrued expenses at December 31, 2011 and 2012 consist of the following: | |||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||
2012 | 2013 | 2011 | 2012 | |||||||||||||
Employee compensation, benefits, and related accruals | $ | 3,096,475 | $ | 3,659,084 | Employee compensation, benefits, and related accruals | $ | 3,492,170 | $ | 3,096,475 | |||||||
Consulting and contracted research | 2,515,678 | 3,556,350 | Consulting and contracted research | 6,749,272 | 2,515,678 | |||||||||||
Professional fees | 559,228 | 1,532,458 | Professional fees | 492,811 | 559,228 | |||||||||||
Accounts payable | 621,591 | 1,017,122 | Accounts payable | 1,878,109 | 621,591 | |||||||||||
Other | 230,999 | 440,479 | Other | 437,092 | 230,999 | |||||||||||
$ | 7,023,971 | $ | 10,205,493 | $ | 13,049,454 | $ | 7,023,971 | |||||||||
Debt
Debt | 9 Months Ended |
Sep. 30, 2013 | |
Debt | ' |
Debt | ' |
6. Debt | |
In July 2013, the Company paid in full the outstanding principal and interest of $2.6 million due under promissory notes issued in connection with a $25 million secured debt facility with a syndicate of two lenders. The notes were secured by substantially all of the Company's assets except for intellectual property and carried a fixed interest rate of 13.65%. As a result of this transaction, the Company recorded a loss on extinguishment of debt of $0.1 million on the Company's statement of operations for the nine months ended September 30, 2013, The loss on extinguishment of debt primarily represented the write off of related deferred financing costs, the acceleration of recognition of debt extinguishment fees and the prepayment premium payable. | |
Capital_structure1
Capital structure | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Capital structure | ' | ' | ||||||||||||||||||||
Capital structure | ' | ' | ||||||||||||||||||||
7. Capital structure | 7. Capital structure | |||||||||||||||||||||
2013 Recapitalization | Convertible preferred stock prior to 2012 recapitalization | |||||||||||||||||||||
During January and February of 2013, the Company entered into a "bridge" financing arrangement with certain existing investors providing for the issuance by the Company of an aggregate of $6 million of convertible promissory notes and warrants to purchase 2,527,675 shares of Series One convertible preferred stock (Series One) and Series Two convertible preferred stock (Series Two). The warrants have a per share exercise price of $0.01, and as such, they are referred to as "penny warrants". This bridge financing was closed in anticipation of the March 2013 Series Four financing event, which the Company refers to as the "2013 recapitalization". | As of December 31, 2011, the Company had authorized for issuance up to 156,995,095 shares of preferred stock, $0.001 par value. The authorized shares as of December 31, 2011 were designated as follows: 750,000 shares of Series A convertible preferred stock (Series A), 187,500 shares of Series B convertible preferred stock (Series B), 6,295,000 shares of Series C convertible preferred stock (Series C), 13,769,935 shares of Series D convertible preferred stock (Series D), 126,735,022 shares of Series E convertible preferred stock (Series E), 3,670,138 shares of Series E-2 convertible preferred stock (Series E-2), 675,000 shares of Series F convertible preferred stock (Series F), 1,612,500 shares of Series F-2 convertible preferred stock (Series F-2) and 3,300,000 shares of Series G convertible preferred stock (Series G). | |||||||||||||||||||||
The Company allocated the proceeds of the convertible promissory notes between debt and warrant liability. Since the value of the warrants exceeded the proceeds from the convertible notes issued to existing investors, the value of the warrant in excess of the proceeds is considered a deemed dividend and reflected as an equity transaction in the financial statements. The Company recorded $6 million to interest expense related to the debt discount associated with the convertible debt during the quarter ended March 31, 2013. | The rights and preferences of the shares of Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2 and Series G were as follows: | |||||||||||||||||||||
On March 7, 2013, the Company closed a private placement of a new series of convertible preferred stock that resulted in the 2013 recapitalization. In this private placement, the Company issued and sold an aggregate of 4,497,035 shares of its Series Four senior preferred stock (Series Four) for an aggregate purchase price of approximately $54 million. Including the $6 million raised with the bridge financing, total gross proceeds raised during the quarter ended March 31, 2013 was approximately $60 million. In addition, the Company issued an aggregate of 502,919 shares of Series Four upon the share settlement of the convertible promissory notes described above that were issued in January and February 2013. | Conversion—Each share of Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2 and Series G was convertible at any time at the option of the holder into such number of shares of common stock as determined by applying a conversion factor to the outstanding shares of approximately 0.0833, 0.1333, 0.1389, 0.1548, 0.0548, 1.0000, 1.0000, 1.0000 and 1.0000 for the Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2, and Series G respectively. These conversion factors were calculated based on the then-applicable conversion price with respect to each respective series of preferred stock. These conversion factors were subject to adjustment in the event the Company issued additional equity securities at prices below the then-applicable conversion price, or if the Company engaged in specified changes to its capitalization, such as stock splits or stock dividends. The conversion of each series of preferred stock would be automatic upon the closing of a qualified initial public offering or any other public offering upon the written election of the Company and holders of both (1) at least two thirds of the outstanding preferred shares on an as-converted to common stock basis and (2) at least two thirds of the Series F, F-2 and G shares voting together as a single class on an as-converted to common stock basis. | |||||||||||||||||||||
In connection with this private placement, the Company effected a one-for-120 reverse stock split of its common stock and an exchange of outstanding shares of Series One, Series Two and Series Three convertible preferred stock (Series Three) into an aggregate of 6,700,487 shares of a new series of Series Five junior preferred stock (Series Five). In addition, the Company issued an aggregate of 2,527,675 shares of Series One and Series Two upon the exercise of the warrants issued in connection with the bridge loan that were immediately exchanged for 2,095,515 shares of Series Five during the 2013 recapitalization. | Voting—Each preferred shareholder was entitled to the number of votes per share as if the preferred shares were converted to common stock. Additionally, the holders of the preferred stock, voting as a single class, were entitled to elect six members of the Board of Directors. | |||||||||||||||||||||
The Company accounted for the 2013 recapitalization as an extinguishment of its Series One, Series Two and Series Three convertible preferred stock and recorded the Series Five shares at their fair value as of the recapitalization date. In accordance with authoritative accounting guidance, the Company recorded a gain attributable to the common stockholders on the extinguishment of the Series One, Series Two and Series Three. The gain of approximately $3.4 million represents the excess of the Series One, Series Two and Series Three over the fair value of the shares Series Five issued in connection with the recapitalization. | Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, holders of preferred stock were entitled to receive, before any distribution or payment on the common stock, an amount equal to $1.00 per share for Series A, $2.00 per share for Series B, $2.50 per share for Series C, $3.25 per share for Series D, $0.397644 per share for Series E, $7.26 per share for Series E-2, $16.00 per share for Series F, $16.00 per share for Series F-2, and $16.00 per share for Series G, plus all declared, but unpaid, dividends. As of December 31, 2011, the aggregate liquidation preference was $750,000, $375,000, $15,000,000, $42,561,249, $49,999,998, $26,645,187, $10,000,000, $24,248,048, and $50,300,000 for the Series A, Series B, Series C, Series D, Series E, Series E-2, Series F, Series F-2, and Series G, respectively. In cases where the liquidation preference applied, if there were insufficient funds to pay the full preference value to all holders, then, as a group, the holders of the Series E, Series E-2, Series F, Series F-2, and Series G would have been paid together first, ratably, in proportion to their respective liquidation preferences. To the extent there were excess assets to distribute, the holders of the Series D would have been paid second. Finally, as a group, the holders of the Series A, Series B, and Series C would have been paid last, ratably, in proportion to their respective liquidation preferences. Dividends were payable only if and when declared. The Company has not declared any dividends through December 31, 2012. | |||||||||||||||||||||
Valuation—The value of the Company was estimated using the PWERM. The PWERM considered the most significant near-term driver of value for the Company as the Company's ability to complete a Phase 3 clinical trial of ataluren for the treatment of Duchenne muscular dystrophy caused by nonsense mutations (nmDMD). The remaining scenarios in the PWERM related to funding the completion of the Phase 3 clinical trial for nmDMD. The path to raising this money made up the remaining nodes in the PWERM. | Recapitalization | |||||||||||||||||||||
After identifying the various potential liquidity scenarios and their likely timing, a pre-money enterprise value was assigned to each scenario based on a combination of management's guidance and recent trends in the capital markets. The resulting enterprise value for each liquidity event was divided by the total shares that would be outstanding under each scenario to arrive at a price per share for the common and preferred classes of stock. Each scenario was then assigned an outcome probability based on management's estimates. The resulting probability weighted share values were then discounted to present value at a rate that reflects general industry risks (but not Company specific risks). | In July 2012, the Company completed a recapitalization pursuant to which all outstanding shares of Series A, B, C, D, E, E-2, F, F-2, and G convertible preferred stock (Prior Series Preferred) were exchanged into Series Three convertible preferred stock (Series Three). Warrants to acquire Prior Series Preferred became warrants to acquire Series Two convertible preferred stock (Series Two). In addition, those investors that elected to participate in the sale of Series One convertible preferred stock (Series One) were entitled to exchange their Series Three shares for Series Two shares. | |||||||||||||||||||||
The rights and preferences of the shares of Series Four and Series Five are as follows: | In connection with the recapitalization, the Company sold 1,483,337 shares of Series One for aggregate gross proceeds of approximately $29.7 million. | |||||||||||||||||||||
Dividends—The holders of Series Four and Series Five, in preference to the holders of common stock, are entitled to noncumulative dividends when and if declared by the Board of Directors. | The Company accounted for the recapitalization as an extinguishment of its Prior Series Preferred and recorded the Series One, Series Two and Series Three shares at their fair value as of the recapitalization date. In accordance with authoritative accounting guidance, the Company recorded a gain attributable to the common stockholders on the extinguishment of the Prior Series Preferred. The gain of approximately $160 million represents the excess of the carrying amount of Prior Series Preferred stock immediately prior to the recapitalization over the fair value of the Series One, Two and Three stock issued in connection with the recapitalization. | |||||||||||||||||||||
Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, the holders of Series Four will be entitled to receive, before any distribution or payment is made to any other class of security, an amount equal to the original issuance price, plus all declared, but unpaid, dividends. To the extent there are excess assets to distribute, the holders of Series Five will be entitled to receive, before any distribution or payment is made to the holders of the common stock, an amount equal to the stated liquidation preference, plus all declared, but unpaid, dividends. To the extent there are remaining assets to distribute, the holders of common stock will be entitled to receive such remaining assets. | Valuation—The value of the Company was estimated using the probability weighted expected return method (PWERM). The PWERM considered the most significant near-term driver of value for the Company as the ability to file a marketing authorization application (MAA) with The European Medicines Agency (EMA) for conditional approval of ataluren. The Company has initiated a confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. If favorable, the results of the confirmatory Phase 3 clinical trial could serve as the basis for full approval by the EMA and the FDA of ataluren for the treatment of nmDMD in the European Union and the United States. The remaining scenarios in the PWERM related to funding the completion of the confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. | |||||||||||||||||||||
Voting—Each holder of Series Four and Series Five are entitled to cast the number of votes into which such holder's shares would convert. Except as required by law, holders of common stock have limited voting rights. Additionally, except as required by law, and except in certain enumerated circumstances, holders of Series Four and Series Five shall vote together with the holders of common stock as a single class. | After identifying the various potential liquidity scenarios and their likely timing, a pre-money enterprise value was assigned to each scenario based on a combination of management's guidance and recent trends in the capital markets. The resulting enterprise value for each liquidity event was divided by the total shares that would be outstanding under each scenario to arrive at a price per share for the common and preferred classes of stock. Each scenario was then assigned an outcome probability based on management's estimates. The resulting probability weighted share values were then discounted to present value at a rate that reflects general industry risks (but not Company specific risks). | |||||||||||||||||||||
Conversion—Each share of Series Four and Series Five is convertible at any time at the option of the holder into one share of common stock. These conversion ratios are subject to adjustment for certain dilutive events, including certain types of stock splits or stock dividends or future recapitalizations. | The rights and preferences of the shares of Series One, Two and Three are as follows: | |||||||||||||||||||||
In May 2013, the Company issued and sold an additional 375,000 shares of Series Four, at a price per share of $12.00, for an aggregate purchase price of $4.5 million. | Dividends—The holders of Series One and Series Two, in preference to the holders of common stock, are entitled to noncumulative dividends when and if declared by the Board of Directors. The holders of Series Three are not entitled to dividends. The Company has not declared any dividends through December 31, 2012. | |||||||||||||||||||||
Common stock | Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, the holders of Series One will be entitled to receive, before any distribution or payment is made to any other class of security, an amount equal to two times the original issuance price, plus all declared, but unpaid, dividends. To the extent there are excess assets to distribute, the holders of Series Two will be entitled to receive 76.47% of such excess assets, and the holders of Series One will be entitled to receive 23.53% of such excess assets, until the holders of Series Two receive an amount equal to one times the stated liquidation preference amount for the Series Two, plus all declared, but unpaid, dividends. In the event there are remaining assets after Series Two distributions, the holders of Series Three are entitled to receive 8.82% of such remaining assets, and the holders of Series One and Series Two will be entitled to receive 23.53% and 67.65%, respectively, of such remaining assets, until the holders of Series Three receive an amount equal to one times the stated liquidation preference amount for the Series Three, plus all declared, but unpaid, dividends. To the extent there are remaining assets to distribute, the holders of Series One, Series Two, and Series Three will be entitled to receive 20%, 55%, and 25% of such remaining assets, respectively. | |||||||||||||||||||||
In May 2013, the Company's Board of Directors and stockholders approved an amendment to the Company's certificate of incorporation increasing the number of authorized shares of common stock to 125,000,000. | Voting—Each holder of Series One is entitled to cast the number of votes equal to five times the number of common shares into which such holder's shares of Series One would convert. Except as required by law, holders of Series Two and Series Three have limited voting rights. Additionally, the holders of Series One, voting as a single class, are entitled to elect twelve members of the Board of Directors. | |||||||||||||||||||||
Initial public offering | Conversion—Each share of Series One is convertible at any time at the option of the holder into two shares of common stock. Each share of Series Two and Series Three is convertible at any time at the option of the holder into one share of common stock. These conversion ratios are subject to adjustment for certain dilutive events, including certain types of stock splits or stock dividends or future recapitalizations. | |||||||||||||||||||||
In June 2013, the Company closed the initial public offering of its common stock pursuant to a registration statement on Form S-1, as amended. The Company issued and sold an aggregate of 9,627,800 shares of common stock under the registration statement at a public offering price of $15.00 per share, including 1,255,800 shares pursuant to the exercise by the underwriters of an over-allotment option. The Company received net proceeds from the initial public offering of approximately $131.6 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. | Warrants | |||||||||||||||||||||
Upon closing the initial public offering, all outstanding shares of the Series Four and Series Five were converted into 14,170,956 shares of common stock. | All of the Company's outstanding warrants are classified as liabilities as of December 31, 2011 and 2012 because they contain either non-standard antidilution provisions or they are exercisable into preferred shares that include a put feature. | |||||||||||||||||||||
Warrants | The following is a summary of the Company's outstanding warrants as of December 31, 2011: | |||||||||||||||||||||
All of the Company's outstanding warrants were classified as liabilities as of December 31, 2012 because they contained either non-standard antidilution provisions or they were exercisable into preferred shares that included a put feature. | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | Warrant | Exercise | Expiration | |||||||||||||||||||
shares | price | |||||||||||||||||||||
Series E convertible preferred stock | 54,465 | $ | 7.26 | 2014 | ||||||||||||||||||
Warrant | Exercise | Expiration | Series F convertible preferred stock | 50,000 | $ | 16 | 2017 | |||||||||||||||
shares | price | Series F-2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | ||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Series Two | 24,712 | $ | 16 | 2014 | ||||||||||||||||||
Series Two | 50,000 | $ | 16 | 2017 | ||||||||||||||||||
Series Two | 56,250 | $ | 16 | 2019 and 2020 | In connection with the recapitalization, all of the Series E, F, and F-2 outstanding warrants became warrants to purchase Series Two. | |||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | ||||||||||||||||||||||
In connection with the 2013 recapitalization, all of the Series Two outstanding warrants became warrants to purchase Series Five. In connection with the Company's initial public offering all of the Series Five outstanding warrants became warrants to purchase common stock. | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of September 30, 2013: | Warrant | Exercise | Expiration | |||||||||||||||||||
shares | price | |||||||||||||||||||||
Series 2 convertible preferred stock | 24,712 | $ | 16 | 2014 | ||||||||||||||||||
Warrant | Exercise | Expiration | Series 2 convertible preferred stock | 50,000 | $ | 16 | 2017 | |||||||||||||||
shares | price | Series 2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | ||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Common stock | 3,088 | $ | 128 | 2014 | ||||||||||||||||||
Common stock | 6,250 | $ | 128 | 2017 | ||||||||||||||||||
Common stock | 7,030 | $ | 128 | 2019 and 2020 | ||||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Net_income_loss_per_share
Net income (loss) per share | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Net income (loss) per share | ' | ' | ||||||||||||||
Net income (loss) per share | ' | ' | ||||||||||||||
8. Net income (loss) per share | 8. Earnings per share | |||||||||||||||
Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. | Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. | |||||||||||||||
The Series One, Series Two and Series Three outstanding during 2012 (subsequent to the recapitalization) participated in the earnings of the Company through dividend rights. Accordingly, the Company measured earnings per share based upon the two-class method prior to the Company's initial public offering in June 2013. | The Prior Series Preferred outstanding in 2011 and 2012 (through the date of the recapitalization) as well as Series One and Series Two outstanding during 2012 (subsequent to the recapitalization) participate in earnings of the Company through dividend rights. Accordingly, the Company measures earnings per share based upon the two-class method. Net income attributable to common stockholders excludes $30,878,445 and $132,609,918 for the years ended 2011 and 2012, respectively, for net income attributable to participating securities. | |||||||||||||||
The following tables set forth the computation of basic and diluted net income (loss) per share for common stockholders: | The diluted earnings per share for the years ended December 31, 2011 and 2012 exclude the impact of approximately 1.3 million and 0.6 million common stock equivalents, respectively, since the effect of including these securities would be anti-dilutive. | |||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share for common stockholders: | ||||||||||||||||
Nine months ended | Net income per share | |||||||||||||||
September 30, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Numerator | Year ended December 31 | |||||||||||||||
Net loss | $ | (19,963,058 | ) | $ | (33,687,612 | ) | 2011 | 2012 | ||||||||
Deemed dividend | — | (18,248,768 | ) | |||||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 159,954,069 | 3,390,750 | Numerator | |||||||||||||
Less beneficial conversion charge | (377,787 | ) | — | Net income (loss) | $ | 30,904,514 | $ | (26,235,102 | ) | |||||||
Less net income attributable to participating securities | (139,077,495 | ) | — | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | ||||||||||
Less beneficial conversion charge | — | (377,787 | ) | |||||||||||||
Net income (loss) attributable to common stockholders | $ | 535,729 | $ | (48,545,630 | ) | Less net income attributable to participating preferred stock | (30,878,445 | ) | (132,609,918 | ) | ||||||
Denominator | Net income attributable to common stockholders | $ | 26,069 | $ | 731,262 | |||||||||||
Denominator for basic net income (loss) per share | 2,937 | 8,995,167 | ||||||||||||||
Effect of dilutive securities | Denominator | |||||||||||||||
Series Three convertible preferred stock | 10,656 | — | Denominator for basic earnings per share | 1,089 | 3,328 | |||||||||||
Effect of dilutive securities: | ||||||||||||||||
Denominator for diluted net income (loss) per share | 13,593 | 8,995,167 | Employee stock options | 4,640 | — | |||||||||||
Series 3 convertible preferred stock | — | 13,877 | ||||||||||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 182.41 | $ | (5.40 | )* | Denominator for diluted earnings per share | 5,729 | 17,205 | ||||||||
Diluted | $ | 39.41 | $ | (5.40 | )* | Net income per share: | ||||||||||
Basic | 23.95 | 219.76 | ||||||||||||||
* In the nine months ended September 30, 2013, the Company experienced a net loss and therefore did not report any dilutive share impact. | Diluted | 4.55 | 42.5 | |||||||||||||
The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period. | ||||||||||||||||
As of September 30, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Stock Options | 44,218 | 1,987,860 | ||||||||||||||
Unvested restricted stock | — | 1,113,807 | ||||||||||||||
Total | 44,218 | 3,101,667 | ||||||||||||||
Stock_option_plan1
Stock option plan | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||
Stock option plan | ' | ' | |||||||||||||||||||||||||||
Stock option plan | ' | ' | |||||||||||||||||||||||||||
9. Stock option plan | 9. Stock option plan | ||||||||||||||||||||||||||||
On March 5, 2013, the Company's Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. | In 2009, the Company's shareholders approved the 2009 Equity and Long-Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards, subject to certain adjustments and annual increases. As of December 31, 2012, awards for 14,271 shares of common stock are available for issuance. | ||||||||||||||||||||||||||||
In May 2013, the Company's Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Stock Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. | The Board of Directors has the authority to select the individuals to whom options are granted and determine the terms of each option, including (i) the number of shares of common stock subject to the option; (ii) the date on which the option becomes exercisable; (iii) the option exercise price, which, in the case of incentive stock options, must be at least 100% (110% in the case of incentive stock options granted to a stockholder owning in excess of 10% of the Company's stock) of the fair market value of the common stock as of the date of grant; and (iv) the duration of the option (which, in the case of incentive stock options, may not exceed ten years). Options typically vest over a three- or four-year period. | ||||||||||||||||||||||||||||
In May 2013, the Company's Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company's IPO. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 122,296 shares of common stock available for issuance under the Company's 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company's 1998 Employee, Director and Consultant Stock Option Plan and 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company's Board of Directors. | A summary of stock option activity is as follows: | ||||||||||||||||||||||||||||
A summary of stock option activity is as follows: | |||||||||||||||||||||||||||||
Number of | Exercise | Weighted- | Weighted- | Aggregate | |||||||||||||||||||||||||
options | price | average | average | intrinsic | |||||||||||||||||||||||||
(in thousands) | Number of | Exercise price | Weighted- | Weighted- | Aggregate | exercise | remaining | value | |||||||||||||||||||||
options | average | average | intrinsic | price | contractual | ||||||||||||||||||||||||
exercise | remaining | value | term | ||||||||||||||||||||||||||
price | contractual | ||||||||||||||||||||||||||||
term | Outstanding at December 31, 2010 | 39,557 | $226.80-$1,149.60 | $ | 547.2 | ||||||||||||||||||||||||
Granted | 8,123 | $490.80 | $ | 490.8 | |||||||||||||||||||||||||
Exercised | (11 | ) | $451.20-$508.80 | $ | 459.6 | ||||||||||||||||||||||||
Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 469.48 | Forfeited | (875 | ) | $226.80-$1,149.60 | $ | 757.2 | |||||||||||||||||||
Granted | 2,007,713 | $10.59-$10.85 | $ | 10.85 | |||||||||||||||||||||||||
Exercised | — | — | — | Outstanding at December 31, 2011 | 46,794 | $226.80-$1,149.60 | $ | 532.8 | 5.74 years | ||||||||||||||||||||
Forfeited | (62,247 | ) | $10.85-$1,149.60 | $ | 17.1 | Granted | 5,715 | $218.40 | $ | 218.4 | |||||||||||||||||||
Exercised | — | ||||||||||||||||||||||||||||
Outstanding at September 30, 2013 | 1,987,860 | $10.59-$1,149.60 | $ | 20.44 | 9.51 years | $ | 20,652 | Forfeited | (10,115 | ) | $218.40-$1,149.60 | $ | 604.8 | ||||||||||||||||
Exercisable at September 30, 2013 | 61,834 | $10.59-$1,149.60 | $ | 290.39 | 6.06 years | $ | 265 | Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 474 | 5.02 years | — | |||||||||||||||
Exercisable at December 31, 2012 | 33,414 | $218.40-$1,149.60 | $ | 482.4 | 4.14 years | — | |||||||||||||||||||||||
The fair value of grants made in the period ended September 30, 2013 was contemporaneously estimated on the date of grant using the following assumptions: | |||||||||||||||||||||||||||||
Exercisable and expected to vest at December 31, 2012 | 42,184 | $218.40-$1,149.60 | $ | 476.4 | 4.97 years | — | |||||||||||||||||||||||
Nine months ended | The fair value of grants made in the years ended December 31, 2011 and 2012 was contemporaneously estimated on the date of grant using the following assumptions: | ||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||
Risk-free interest rate | 0.85%-1.69% | ||||||||||||||||||||||||||||
Expected volatility | 87%-88% | 2011 | 2012 | ||||||||||||||||||||||||||
Expected term | 5.00 to 6.00 years | ||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | Risk-free interest rate | 2.40% | 1.14% | |||||||||||||||||||||||||
Expected volatility | 87% | 87% | |||||||||||||||||||||||||||
Expected term | 6.00-6.25 years | 6.00-6.25 years | |||||||||||||||||||||||||||
The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the nine month period ended September 30, 2013 was $7.86 per share. | |||||||||||||||||||||||||||||
The Company uses the "simplified method" to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. | The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the years ended December 31, 2011 and 2012 was $364.80 and $160.65, respectively. | ||||||||||||||||||||||||||||
Restricted stock awards—Restricted stock awards are granted subject to certain restrictions, including in some cases service conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company's shares on the grant date, is expensed over the vesting period. | The Company uses the "simplified method" to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. | ||||||||||||||||||||||||||||
The following table summarizes information on the Company's restricted stock: | The Company recognized approximately $2,817,000 and $2,288,000 of share-based compensation expense, during the years ended December 31, 2011 and 2012, respectively. The Company utilizes newly issued shares to satisfy stock option exercises. | ||||||||||||||||||||||||||||
As of December 31, 2011 and 2012, there was approximately $4,005,000 and $2,213,000, respectively of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 1998 and 2009 Plan. This cost is expected to be recognized as compensation expense over the weighted average remaining service period of approximately 2.14 years. | |||||||||||||||||||||||||||||
Restricted stock | |||||||||||||||||||||||||||||
Number of | Weighted | ||||||||||||||||||||||||||||
shares | average grant | ||||||||||||||||||||||||||||
date fair value | |||||||||||||||||||||||||||||
January 1, 2013 | — | — | |||||||||||||||||||||||||||
Granted | 1,131,524 | $ | 10.68 | ||||||||||||||||||||||||||
Vested | — | $ | — | ||||||||||||||||||||||||||
Forfeited | (17,717 | ) | $ | 10.63 | |||||||||||||||||||||||||
Unvested at September 30, 2013 | 1,113,807 | $ | 10.68 | ||||||||||||||||||||||||||
The Company recorded share-based compensation expense in the statement of operations as follows: | |||||||||||||||||||||||||||||
Nine months ended | |||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||||||
Research and development | $ | 653,462 | $ | 1,377,640 | |||||||||||||||||||||||||
General and administrative | 1,162,260 | 3,764,547 | |||||||||||||||||||||||||||
Total | $ | 1,815,722 | $ | 5,142,187 | |||||||||||||||||||||||||
As of December 31, 2012 and September 30, 2013, there was approximately $2.2 million and $21.0 million, respectively of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 1998, 2009 and 2013 Plans. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 2.28 years. | |||||||||||||||||||||||||||||
Collaboration_Revenue
Collaboration Revenue | 9 Months Ended |
Sep. 30, 2013 | |
Collaboration Revenue. | ' |
Collaboration Revenue | ' |
10. Collaboration revenue | |
On August 8, 2013, the Company announced the selection of a development candidate in its spinal muscular atrophy collaboration with F. Hoffman-La Roche Ltd and Hoffman-La Roche Inc. (Roche) and the Spinal Muscular Atrophy Foundation. The achievement of this milestone triggered a $10.0 million payment to the Company from Roche. The Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy (see Note 2) would be satisfied and recorded it as collaboration revenue for the nine months ended September 30, 2013. | |
Selected_quarterly_financial_d3
Selected quarterly financial data | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Selected quarterly financial data | ' | ' | |||||||||||||||||||||||
Selected quarterly financial data | ' | ' | |||||||||||||||||||||||
11. Selected quarterly financial data | 15. Selected quarterly financial data (unaudited) | ||||||||||||||||||||||||
The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for 2012 and 2013 are as follows (in thousands, except per share data): | The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Net income (loss) per share for all periods presented have been retroactively adjusted to reflect the 1-for-120 reverse stock split effected on March 7, 2013. Summarized quarterly data for 2011 and 2012 are as follows (in thousands, except per share data): | ||||||||||||||||||||||||
For the quarters ending | For the quarters ending | ||||||||||||||||||||||||
March 31 | June 30 | September 30 | March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||
2012:00:00 | 2011:00:00 | ||||||||||||||||||||||||
Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | Collaboration and grant revenue | $ | 4,853,008 | $ | 4,772,720 | $ | 86,423,733 | $ | 9,362,686 | ||||||||||
Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | Operating expenses | 19,848,797 | 19,682,313 | 18,315,064 | 16,983,976 | |||||||||||||||||
Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | Income (loss) from operations | (14,995,789 | ) | (14,909,593 | ) | 68,108,669 | (7,621,290 | ) | |||||||||||
Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | Net income (loss) | (15,550,607 | ) | (15,388,398 | ) | 67,608,165 | (5,764,646 | ) | |||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | Basic net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 52.39 | $ | (5,290.57 | ) | ||||||||||
Less beneficial conversion charge | — | (377,787 | ) | — | Diluted net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 9.95 | $ | (5,290.57 | ) | |||||||||
Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | 2012:00:00 | |||||||||||||||||||
Basic net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | $ | 6,640,090 | ||||||||
Diluted net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | 12,674,520 | ||||||||||||
2013:00:00 | Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | (6,034,430 | ) | ||||||||||||||||
Collaboration and grant revenue | $ | 7,141,664 | $ | 6,854,212 | $ | 16,289,573 | Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | (6,272,044 | ) | ||||||||||
Operating expenses | 15,718,073 | 21,307,148 | 20,565,188 | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | — | |||||||||||||||||
Income (loss) from operations | (8,576,409 | ) | (14,452,936 | ) | (4,275,615 | ) | Less beneficial conversion charge | — | (377,787 | ) | — | — | |||||||||||||
Net income (loss) | (14,684,535 | ) | (14,586,578 | ) | (4,416,499 | ) | Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | (6,372,044 | ) | |||||||||||
Deemed dividend | (18,248,768 | ) | — | — | Basic net income (loss) attributable to common stockholders per share | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | |||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 3,390,750 | — | — | Diluted net income (loss) attributable to common stockholders per share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | ||||||||||
Net income (loss) attributable to common stockholders | (29,542,553 | ) | (14,586,578 | ) | (4,416,499 | ) | |||||||||||||||||||
Basic net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | ||||||||||||||||
Diluted net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | (1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||
(1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||||||||||||
Subsequent_events1
Subsequent events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Subsequent events | ' | ' |
Subsequent events | ' | ' |
12. Subsequent events | 14. Subsequent events | |
The Company continues to advance the development of its spinal muscular atrophy (SMA) collaboration with Roche and the SMA Foundation. The collaboration was initially funded in part by the SMA Foundation. In December 2011, the Company announced a partnership with Roche in the collaboration which provided an upfront payment of $30 million, up to $460 million in milestone payments and royalties on future sales. In August 2013, a development candidate for the program was announced which triggered a $10 million milestone payment from Roche. In January 2014, a Phase 1 clinical program was initiated which triggered a $7.5 million milestone payment from Roche. Roche is responsible for pursuing clinical development of compounds from the program consistent with a governance structure that includes representation from the Company and the SMA Foundation and then commercialization of these compounds. | On January 29, 2013, the Company entered into a financing arrangement with certain existing investors providing for the issuance by the Company of convertible promissory notes and warrants to purchase shares of Series One and Series Two. The Company issued convertible promissory notes in January and February 2013 in an aggregate principal amount of $6 million under this financing arrangement. This financing was closed in anticipation of an additional financing event, which is described in the next paragraph below. | |
On December 13, 2013, the Compensation Committee of the Company's Board of Directors approved the waiver of the remaining performance vesting triggers with respect to performance-based stock options granted to the Company's executive officers during 2013, such that 25% of the shares underlying such stock options vested on December 31, 2013, and an additional 2.0833% of the shares underlying such stock options will vest at the end of each successive month following December 31, 2013 until December 31, 2016. Approximately $0.6 million is expected to be recorded as share-based compensation in the fourth quarter of 2013 as a result of the modification of these stock options, which represents the incremental fair value of such modified stock options computed in accordance with ASC Topic 718 as of the date of modification. | On March 7, 2013, the Company closed a private placement of a new series of convertible preferred stock that resulted in another recapitalization event. In this private placement, the Company issued and sold an aggregate of 4,497,035 shares of Series Four senior preferred stock (Series Four) for an aggregate purchase price of approximately $54 million. In addition, the Company issued an aggregate of 502,919 shares of Series Four upon conversion of the convertible promissory notes described above that it originally issued in January and February 2013. In connection with this private placement, the Company effected a one-for-120 reverse stock split of its common stock and an exchange of outstanding shares of Series One, Series Two and Series Three into an aggregate of 6,700,487 shares of a new series of Series Five junior preferred stock (Series Five). In addition, the Company issued an aggregate of 2,095,515 shares Series Five upon the automatic exercise of the Series One and Series Two warrants described above that it originally issued in January 2013. The Company expects to account for the March 2013 Series Four financing and recapitalization as an extinguishment of its Series One, Series Two and Series Three stock and will record a gain or loss for the difference between the fair value of the new Series Four and Series Five shares over the carrying value of the Series One, Two and Three shares extinguished. The warrants to purchase shares of Series One, Two and Three issued in connection with the January 2013 convertible note financing will be recorded as a liability and remeasured each reporting period. The Company expects to record a debt discount resulting from the allocation of proceeds to the fair value of the warrants and reflect the discount as interest expense during the quarter ended March 31, 2013. | |
Valuation—The value of the Company was estimated using the PWERM. The PWERM considered the most significant near-term driver of value for the Company as the ability to file a MAA with the EMA for conditional approval of ataluren for the treatment of nmDMD. The Company has initiated a confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. If favorable, the results of the confirmatory Phase 3 clinical trial could serve as the basis for full approval by the EMA and the FDA of ataluren for the treatment of nmDMD in the European Union and the United States. The remaining scenarios in the PWERM related to funding the completion of the confirmatory Phase 3 clinical trial of ataluren for the treatment of nmDMD. | ||
After identifying the various potential liquidity scenarios and their likely timing, a pre-money enterprise value was assigned to each scenario based on a combination of management's guidance and recent trends in the capital markets. The resulting enterprise value for each liquidity event was divided by the total shares that would be outstanding under each scenario to arrive at a price per share for the common and preferred classes of stock. Each scenario was then assigned an outcome probability based on management's estimates. The resulting probability weighted share values were then discounted to present value at a rate that reflects general industry risks (but not Company specific risks). | ||
The rights and preferences of the shares of Series Four and Five are as follows: | ||
Dividends—The holders of Series Four and Series Five, in preference to the holders of common stock, are entitled to noncumulative dividends when and if declared by the Board of Directors. | ||
Liquidation—Upon the liquidation, dissolution, reorganization or winding-up of the Company, the holders of Series Four will be entitled to receive, before any distribution or payment is made to any other class of security, an amount equal to the original issuance price, plus all declared, but unpaid, dividends. To the extent there are excess assets to distribute, the holders of Series Five will be entitled to receive, before any distribution or payment is made to the holders of the common stock, an amount equal to the stated liquidation preference, plus all declared, but unpaid, dividends. To the extent there are remaining assets to distribute, the holders of common stock will be entitled to receive such remaining assets. | ||
Voting—Each holder of Series Four and Series Five are entitled to cast the number of votes into which such holder's shares would convert. Except as required by law, holders of common stock have limited voting rights. Additionally, except as required by law, and except in certain enumerated circumstances, holders of Series Four and Series Five shall vote together with the holders of common stock as a single class. | ||
Conversion—Each share of Series Four and Series Five is convertible at any time at the option of the holder into one share of common stock. These conversion ratios are subject to adjustment for certain dilutive events, including certain types of stock splits or stock dividends or future recapitalizations. | ||
On March 5, 2013, the Company's Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based in the aggregate of 739,937 shares of Common Stock (calculated after the one-for-120 reverse stock split of its common stock). On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. | ||
Summary_of_significant_account7
Summary of significant accounting policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Summary of significant accounting policies | ' | ' |
Basis of Presentation | ' | ' |
Basis of presentation | ||
The accompanying financial information as of September 30, 2013 and for the nine months ended September 30, 2012 and 2013 has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company's audited financial statements as of December 31, 2012 and notes thereto included in the final prospectus related to the Company's initial public offering. | ||
In the opinion of management, the unaudited financial information as of September 30, 2013 and the nine months ended September 30, 2012 and 2013 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the nine month period ended September 30, 2013 is not necessarily indicative of the results to be expected for the year ended December 31, 2013 or for any other interim period or for any other future year. | ||
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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Reverse stock split | ' | ' |
Reverse stock split | Reverse stock split | |
On March 7, 2013, the Company effected a one-for-120 reverse stock split of its common stock, pursuant to which each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All common stock share and per share references in the financial statements and notes thereto have been restated to reflect the reverse stock split on a retroactive basis. | As a result of the one-for-120 reverse stock split that was effected on March 7, 2013, each 120 shares of the Company's outstanding common stock were reclassified and combined into one share of common stock. All references to common stock have been restated to reflect the reverse stock split on a retroactive basis. | |
Marketable Securities | ' | ' |
Marketable securities | ||
Management determines the classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Marketable securities are classified as available-for-sale and carried at fair value, with any unrealized gain or loss recorded as a separate component of stockholders' (deficit) equity. | ||
Revenue recognition | ' | ' |
Revenue recognition | Revenue recognition | |
The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. | |
The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | The Company's revenue is generated primarily through collaborative research and development and licensing agreements and grants. | |
The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. | |
For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | For existing collaborations entered into prior to the adoption in 2011 of the revised multiple element revenue recognition guidance described below, the Company recognized revenue consistent with the approach established at the inception of each arrangement. For these existing collaborations, where the Company has continuing involvement, the Company recorded nonrefundable, upfront fees as deferred revenue and recognizes revenue on a straight-line basis as collaboration revenue over the expected performance period. | |
For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | For new collaborations or for material modifications made to existing collaborations, in 2011 and thereafter, the Company adopted the updated multiple element revenue recognition guidance. Under this new guidance, all non-contingent arrangement consideration is allocated to the identified units of accounting based on their relative selling price at inception of the collaboration arrangement. The Company derives the selling price using a combination of internal subjective and available external objective information, such as comparable transactions. The Company recognizes revenue commensurate with delivery, such as in the case with delivery of a license, or ratably over the course of a service period, as appropriate, such as in the case of ongoing research and development activities. | |
The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from its activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. | The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if milestone payments are substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. | |
The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. | |
Fair value of financial instruments | ' | ' |
Fair value of financial instruments | Fair value of financial instruments | |
The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establishes a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). | |
• | • | |
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. | |
• | • | |
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability | Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | |
(i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). | • | |
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | ||
• | ||
Level 3—Inputs are unobservable and reflect the Company's assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. | Cash equivalents and investments are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables and accounts payable and accrued expenses approximates fair value due to the short-term nature of those instruments. | |
Cash equivalents are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables, accounts payable and accrued expenses, and debt approximates fair value due to the short-term nature of those instruments. | ||
Warrant liability | ' | ' |
Warrant liability | Warrant liability | |
Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain (loss) on warrant valuation each reporting period in Other income (expense), net on the Company's statement of operations. | Warrants to purchase the Company's common stock with nonstandard antidilution provisions and preferred stock that include a put feature, regardless of the probability or likelihood that may conditionally obligate the issuer to ultimately transfer assets, are classified as liabilities and are recorded at their estimated fair value at each reporting period. Any change in fair value of these warrants is recorded as gain/(loss) on warrant valuation each reporting period in Other income on the Company's statement of operations. | |
Share-based compensation | ' | ' |
Share-based compensation | Share-based compensation | |
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. For service type awards, share-based compensation expense is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. For awards that vest or begin vesting upon achievement of a performance condition, the Company estimates the likelihood of satisfaction of the performance condition and recognizes compensation expense when achievement of the performance condition is deemed probable using an accelerated attribution model. | The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the entire award. | |
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions, such as expected volatility and expected term. As a new public company, the Company does not have sufficient history to estimate the volatility of its common stock price or the expected life of the options. The Company calculates expected volatility based on reported data for similar publicly traded companies for which historical information is available and will continue to do so until the historical volatility of its common stock is sufficient to measure expected volatility for future option grants. | The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions such as stock price, expected volatility and expected term. The Company's estimates of these assumptions are primarily based on third-party valuations, historical data, peer company data and judgment regarding future trends and factors. | |
The Company utilized various valuation methodologies in accordance with the framework of the 2004 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its stock. The methodologies included an option pricing method to estimate the Company's underlying equity value, and a methodology that determined an estimated value under an initial public offering (IPO) scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology includes estimates and assumptions that require the Company's judgment. These estimates include assumptions regarding future performance, including the completion of clinical trials and the time to complete an IPO or sale of the Company. As with any valuation, significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date. | ||
Fair_value_of_financial_instru5
Fair value of financial instruments and marketable securities (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Fair value of financial instruments and marketable securities | ' | ' | |||||||||||||||||||||||
Schedule of financial assets that are required to be measured at fair value on a recurring basis | ' | ' | |||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Warrant liability | $ | 95,661 | $ | — | $ | — | $ | 95,661 | Warrant liability | $ | 1,878,316 | $— | $— | $1,878,316 | |||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Total | Quoted prices | Significant | Significant | Total | Quoted prices | Significant | Significant | ||||||||||||||||||
in active | other | unobservable | in active | other | unobservable | ||||||||||||||||||||
markets for | observable | inputs | markets for | observable | inputs | ||||||||||||||||||||
identical assets | inputs | (level 3) | identical assets | inputs | (level 3) | ||||||||||||||||||||
(level 1) | (level 2) | (level 1) | (level 2) | ||||||||||||||||||||||
Marketable securities | $ | 133,182,565 | $ | — | $ | 133,182,565 | $ | — | Warrant liability | $ | 95,661 | $— | $— | $95,661 | |||||||||||
Warrant liability | 98,819 | — | — | 98,819 | |||||||||||||||||||||
Summary of marketable securities accounted for as available-for-sale securities | ' | ' | |||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||
Gross Unrealized | |||||||||||||||||||||||||
Amortized | Fair | ||||||||||||||||||||||||
Cost | Gains | Losses | Value | ||||||||||||||||||||||
Commercial paper | $ | 24,978,703 | $ | 20,527 | $ | — | $ | 24,999,230 | |||||||||||||||||
U.S. corporate debt securities | 108,244,329 | 19,642 | (80,636 | ) | 108,183,335 | ||||||||||||||||||||
$ | 133,223,032 | $ | 40,169 | $ | (80,636 | ) | $ | 133,182,565 | |||||||||||||||||
Schedule of marketable securities on the balance sheet | ' | ' | |||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||
Less than | More than | ||||||||||||||||||||||||
12 Months | 12 Months | ||||||||||||||||||||||||
Commercial paper | $ | 24,999,230 | $ | — | |||||||||||||||||||||
U.S. corporate debt securities | 57,824,657 | 50,358,678 | |||||||||||||||||||||||
Total Marketable securities | $ | 82,823,887 | $ | 50,358,678 | |||||||||||||||||||||
Summary of changes in the fair value of the Company's Level 3 valuation for warrant liability | ' | ' | |||||||||||||||||||||||
Level 3 assets | Level 3 assets | ||||||||||||||||||||||||
Beginning balance as of December 31, 2012 | $ | 95,661 | Beginning balance January 1, 2011 | $ | 2,340,263 | ||||||||||||||||||||
Warrants issued in connection with convertible promissory notes | 6,000,000 | Change in fair value of warrant liability | (461,947 | ) | |||||||||||||||||||||
Deemed dividend | 18,248,768 | ||||||||||||||||||||||||
Exercise of warrants issued in connection with convertible promissory notes | (24,248,765 | ) | Ending balance as of December 31, 2011 | 1,878,316 | |||||||||||||||||||||
Change in fair value of warrant liability | 3,155 | Change in fair value of warrant liability | (1,782,655 | ) | |||||||||||||||||||||
Ending balance as of September 30, 2013 | $ | 98,819 | Ending balance as of December 31, 2012 | $ | 95,661 | ||||||||||||||||||||
Other_comprehensive_income_los1
Other comprehensive income (loss) and accumulated other comprehensive items (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Other comprehensive income (loss) and accumulated other comprehensive items | ' | |||||||
Summary of other comprehensive loss and the changes in accumulated other comprehensive items | ' | |||||||
Unrealized losses | Total | |||||||
on marketable | accumulated | |||||||
securities | other | |||||||
comprehensive | ||||||||
items | ||||||||
Balance at December 31, 2012 | $ | — | $ | — | ||||
Other comprehensive loss before reclassifications | (40,467 | ) | (40,467 | ) | ||||
Amounts reclassified from other comprehensive items | — | — | ||||||
Other comprehensive loss | (40,467 | ) | (40,467 | ) | ||||
Balance at September 30, 2013 | $ | (40,467 | ) | $ | (40,467 | ) | ||
Accounts_payable_and_accrued_e4
Accounts payable and accrued expenses (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Accounts payable and accrued expenses | ' | ' | ||||||||||||||
Schedule of components of accounts payable and accrued expenses | ' | ' | ||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||
2012 | 2013 | 2011 | 2012 | |||||||||||||
Employee compensation, benefits, and related accruals | $ | 3,096,475 | $ | 3,659,084 | Employee compensation, benefits, and related accruals | $ | 3,492,170 | $ | 3,096,475 | |||||||
Consulting and contracted research | 2,515,678 | 3,556,350 | Consulting and contracted research | 6,749,272 | 2,515,678 | |||||||||||
Professional fees | 559,228 | 1,532,458 | Professional fees | 492,811 | 559,228 | |||||||||||
Accounts payable | 621,591 | 1,017,122 | Accounts payable | 1,878,109 | 621,591 | |||||||||||
Other | 230,999 | 440,479 | Other | 437,092 | 230,999 | |||||||||||
$ | 7,023,971 | $ | 10,205,493 | $ | 13,049,454 | $ | 7,023,971 | |||||||||
Capital_structure_Tables1
Capital structure (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Capital structure | ' | ' | ||||||||||||||||||||
Summary of the Company's outstanding warrants | ' | ' | ||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2011: | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | ||||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | |||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | Series E convertible preferred stock | 54,465 | $ | 7.26 | 2014 | ||||||||||||||||
Series F convertible preferred stock | 50,000 | $ | 16 | 2017 | ||||||||||||||||||
Series Two | 24,712 | $ | 16 | 2014 | Series F-2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | |||||||||||||
Series Two | 50,000 | $ | 16 | 2017 | Common stock | 645 | $ | 2,520 | 2013 and 2014 | |||||||||||||
Series Two | 56,250 | $ | 16 | 2019 and 2020 | ||||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of December 31, 2012: | ||||||||||||||||||||||
The following is a summary of the Company's outstanding warrants as of September 30, 2013: | ||||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | |||||||||||||||||||||
Warrant | Exercise | Expiration | ||||||||||||||||||||
shares | price | Series 2 convertible preferred stock | 24,712 | $ | 16 | 2014 | ||||||||||||||||
Series 2 convertible preferred stock | 50,000 | $ | 16 | 2017 | ||||||||||||||||||
Common stock | 3,088 | $ | 128 | 2014 | Series 2 convertible preferred stock | 56,250 | $ | 16 | 2019 and 2020 | |||||||||||||
Common stock | 6,250 | $ | 128 | 2017 | Common stock | 645 | $ | 2,520 | 2013 and 2014 | |||||||||||||
Common stock | 7,030 | $ | 128 | 2019 and 2020 | ||||||||||||||||||
Common stock | 645 | $ | 2,520 | 2013 and 2014 | ||||||||||||||||||
Net_income_loss_per_share_Tabl
Net income (loss) per share (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Net income (loss) per share | ' | ' | ||||||||||||||
Schedule of computation of basic and diluted net income (loss) per share for common stockholders | ' | ' | ||||||||||||||
Nine months ended | Year ended December 31 | |||||||||||||||
September 30, | 2011 | 2012 | ||||||||||||||
2012 | 2013 | |||||||||||||||
Numerator | ||||||||||||||||
Numerator | Net income (loss) | $ | 30,904,514 | $ | (26,235,102 | ) | ||||||||||
Net loss | $ | (19,963,058 | ) | $ | (33,687,612 | ) | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | |||||||
Deemed dividend | — | (18,248,768 | ) | Less beneficial conversion charge | — | (377,787 | ) | |||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 159,954,069 | 3,390,750 | Less net income attributable to participating preferred stock | (30,878,445 | ) | (132,609,918 | ) | |||||||||
Less beneficial conversion charge | (377,787 | ) | — | |||||||||||||
Less net income attributable to participating securities | (139,077,495 | ) | — | Net income attributable to common stockholders | $ | 26,069 | $ | 731,262 | ||||||||
Net income (loss) attributable to common stockholders | $ | 535,729 | $ | (48,545,630 | ) | Denominator | ||||||||||
Denominator for basic earnings per share | 1,089 | 3,328 | ||||||||||||||
Denominator | Effect of dilutive securities: | |||||||||||||||
Denominator for basic net income (loss) per share | 2,937 | 8,995,167 | Employee stock options | 4,640 | — | |||||||||||
Effect of dilutive securities | Series 3 convertible preferred stock | — | 13,877 | |||||||||||||
Series Three convertible preferred stock | 10,656 | — | ||||||||||||||
Denominator for diluted earnings per share | 5,729 | 17,205 | ||||||||||||||
Denominator for diluted net income (loss) per share | 13,593 | 8,995,167 | ||||||||||||||
Net income per share: | ||||||||||||||||
Net income (loss) per share: | Basic | 23.95 | 219.76 | |||||||||||||
Basic | $ | 182.41 | $ | (5.40 | )* | |||||||||||
Diluted | 4.55 | 42.5 | ||||||||||||||
Diluted | $ | 39.41 | $ | (5.40 | )* | |||||||||||
* In the nine months ended September 30, 2013, the Company experienced a net loss and therefore did not report any dilutive share impact. | ||||||||||||||||
Schedule of historical dilutive common share equivalents outstanding | ' | ' | ||||||||||||||
As of September 30, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Stock Options | 44,218 | 1,987,860 | ||||||||||||||
Unvested restricted stock | — | 1,113,807 | ||||||||||||||
Total | 44,218 | 3,101,667 | ||||||||||||||
Stock_option_plan_Tables1
Stock option plan (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||||||
Stock option plan | ' | ' | |||||||||||||||||||||||||||
Summary of stock option activity | ' | ' | |||||||||||||||||||||||||||
(in thousands) | Number of | Exercise price | Weighted- | Weighted- | Aggregate | Number of | Exercise | Weighted- | Weighted- | Aggregate | |||||||||||||||||||
options | average | average | intrinsic | options | price | average | average | intrinsic | |||||||||||||||||||||
exercise | remaining | value | exercise | remaining | value | ||||||||||||||||||||||||
price | contractual | price | contractual | ||||||||||||||||||||||||||
term | term | ||||||||||||||||||||||||||||
Outstanding at December 31, 2010 | 39,557 | $226.80-$1,149.60 | $ | 547.2 | |||||||||||||||||||||||||
Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 469.48 | Granted | 8,123 | $490.80 | $ | 490.8 | ||||||||||||||||||||
Granted | 2,007,713 | $10.59-$10.85 | $ | 10.85 | Exercised | (11 | ) | $451.20-$508.80 | $ | 459.6 | |||||||||||||||||||
Exercised | — | — | — | Forfeited | (875 | ) | $226.80-$1,149.60 | $ | 757.2 | ||||||||||||||||||||
Forfeited | (62,247 | ) | $10.85-$1,149.60 | $ | 17.1 | ||||||||||||||||||||||||
Outstanding at December 31, 2011 | 46,794 | $226.80-$1,149.60 | $ | 532.8 | 5.74 years | ||||||||||||||||||||||||
Outstanding at September 30, 2013 | 1,987,860 | $10.59-$1,149.60 | $ | 20.44 | 9.51 years | $ | 20,652 | Granted | 5,715 | $218.40 | $ | 218.4 | |||||||||||||||||
Exercised | — | ||||||||||||||||||||||||||||
Exercisable at September 30, 2013 | 61,834 | $10.59-$1,149.60 | $ | 290.39 | 6.06 years | $ | 265 | Forfeited | (10,115 | ) | $218.40-$1,149.60 | $ | 604.8 | ||||||||||||||||
Outstanding at December 31, 2012 | 42,394 | $218.40-$1,149.60 | $ | 474 | 5.02 years | — | |||||||||||||||||||||||
Exercisable at December 31, 2012 | 33,414 | $218.40-$1,149.60 | $ | 482.4 | 4.14 years | — | |||||||||||||||||||||||
Exercisable and expected to vest at December 31, 2012 | 42,184 | $218.40-$1,149.60 | $ | 476.4 | 4.97 years | — | |||||||||||||||||||||||
Schedule of assumptions used to estimate fair value of grants made on the date of grant | ' | ' | |||||||||||||||||||||||||||
Nine months ended | 2011 | 2012 | |||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||
Risk-free interest rate | 2.40% | 1.14% | |||||||||||||||||||||||||||
Risk-free interest rate | 0.85%-1.69% | Expected volatility | 87% | 87% | |||||||||||||||||||||||||
Expected volatility | 87%-88% | Expected term | 6.00-6.25 years | 6.00-6.25 years | |||||||||||||||||||||||||
Expected term | 5.00 to 6.00 years | ||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | ||||||||||||||||||||||||||||
Summary of information on the Company's restricted stock | ' | ' | |||||||||||||||||||||||||||
Restricted stock | |||||||||||||||||||||||||||||
Number of | Weighted | ||||||||||||||||||||||||||||
shares | average grant | ||||||||||||||||||||||||||||
date fair value | |||||||||||||||||||||||||||||
January 1, 2013 | — | — | |||||||||||||||||||||||||||
Granted | 1,131,524 | $ | 10.68 | ||||||||||||||||||||||||||
Vested | — | $ | — | ||||||||||||||||||||||||||
Forfeited | (17,717 | ) | $ | 10.63 | |||||||||||||||||||||||||
Unvested at September 30, 2013 | 1,113,807 | $ | 10.68 | ||||||||||||||||||||||||||
Schedule of share-based compensation expense recorded in the statement of operations | ' | ' | |||||||||||||||||||||||||||
Nine months ended | |||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||||||||||
Research and development | $ | 653,462 | $ | 1,377,640 | |||||||||||||||||||||||||
General and administrative | 1,162,260 | 3,764,547 | |||||||||||||||||||||||||||
Total | $ | 1,815,722 | $ | 5,142,187 | |||||||||||||||||||||||||
Selected_quarterly_financial_d4
Selected quarterly financial data (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||||
Selected quarterly financial data | ' | ' | |||||||||||||||||||||||
Summary of quarterly data | ' | ' | |||||||||||||||||||||||
Summarized quarterly data for 2012 and 2013 are as follows (in thousands, except per share data): | |||||||||||||||||||||||||
For the quarters ending | |||||||||||||||||||||||||
March 31 | June 30 | September 30 | |||||||||||||||||||||||
For the quarters ending | |||||||||||||||||||||||||
2012:00:00 | March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||||
Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | |||||||||||||||||||
Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | 2011:00:00 | |||||||||||||||||||||
Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | Collaboration and grant revenue | $ | 4,853,008 | $ | 4,772,720 | $ | 86,423,733 | $ | 9,362,686 | ||||||||||
Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | Operating expenses | 19,848,797 | 19,682,313 | 18,315,064 | 16,983,976 | ||||||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | Income (loss) from operations | (14,995,789 | ) | (14,909,593 | ) | 68,108,669 | (7,621,290 | ) | ||||||||||||||
Less beneficial conversion charge | — | (377,787 | ) | — | Net income (loss) | (15,550,607 | ) | (15,388,398 | ) | 67,608,165 | (5,764,646 | ) | |||||||||||||
Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | Basic net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 52.39 | $ | (5,290.57 | ) | ||||||||
Basic net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | Diluted net income (loss) per common share(1) | $ | (14,289.99 | ) | $ | (14,140.93 | ) | $ | 9.95 | $ | (5,290.57 | ) | |||||
Diluted net income (loss) per common share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | 2012:00:00 | ||||||||||||||||
2013:00:00 | Collaboration and grant revenue | $ | 12,525,720 | $ | 7,585,177 | $ | 7,195,076 | $ | 6,640,090 | ||||||||||||||||
Collaboration and grant revenue | $ | 7,141,664 | $ | 6,854,212 | $ | 16,289,573 | Operating expenses | 18,745,957 | 15,083,384 | 14,250,383 | 12,674,520 | ||||||||||||||
Operating expenses | 15,718,073 | 21,307,148 | 20,565,188 | Income (loss) from operations | (6,220,237 | ) | (7,498,207 | ) | (7,055,307 | ) | (6,034,430 | ) | |||||||||||||
Income (loss) from operations | (8,576,409 | ) | (14,452,936 | ) | (4,275,615 | ) | Net income (loss) | (6,597,861 | ) | (6,068,072 | ) | (7,297,125 | ) | (6,272,044 | ) | ||||||||||
Net income (loss) | (14,684,535 | ) | (14,586,578 | ) | (4,416,499 | ) | Gain on exchange of convertible preferred stock in connection with recapitalization | — | 159,954,069 | — | — | ||||||||||||||
Deemed dividend | (18,248,768 | ) | — | — | Less beneficial conversion charge | — | (377,787 | ) | — | — | |||||||||||||||
Gain on exchange of convertible preferred stock in connection with recapitalization | 3,390,750 | — | — | Net income (loss) attributable to common stockholders | (6,597,861 | ) | 153,508,210 | (7,297,125 | ) | (6,372,044 | ) | ||||||||||||||
Net income (loss) attributable to common stockholders | (29,542,553 | ) | (14,586,578 | ) | (4,416,499 | ) | Basic net income (loss) attributable to common stockholders per share | $ | (5,992.61 | ) | $ | 168 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | |||||||
Basic net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | Diluted net income (loss) attributable to common stockholders per share(1) | $ | (5,992.61 | ) | $ | 48.29 | $ | (1,605.53 | ) | $ | (1,380.13 | ) | ||||
Diluted net income (loss) per common share(1) | $ | (6,527.30 | ) | $ | (5.51 | ) | $ | (0.19 | ) | ||||||||||||||||
(1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||||||||||||
(1) The amounts were computed independently for each quarter and the sum of the quarters may not total the annual amounts. | |||||||||||||||||||||||||
The_Company_Details1
The Company (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
The Company | ' | ' | ' |
Accumulated deficit | $310,912,330 | $277,224,718 | $250,611,829 |
Summary_of_significant_account8
Summary of significant accounting policies (Details) (Common stock) | 0 Months Ended |
Mar. 07, 2013 | |
Common stock | ' |
Reverse stock split | ' |
Reverse stock split ratio | 0.0083 |
Fair_value_of_financial_instru6
Fair value of financial instruments and marketable securities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Financial assets measured at fair value on recurring basis | ' | ' | ' |
Marketable securities | $133,182,565 | ' | ' |
Recurring basis | Total | ' | ' | ' |
Financial assets measured at fair value on recurring basis | ' | ' | ' |
Marketable securities | 133,182,565 | ' | ' |
Warrant liability | 98,819 | 95,661 | 1,878,316 |
Recurring basis | Significant other observable inputs (level 2) | ' | ' | ' |
Financial assets measured at fair value on recurring basis | ' | ' | ' |
Marketable securities | 133,182,565 | ' | ' |
Recurring basis | Significant unobservable inputs (level 3) | ' | ' | ' |
Financial assets measured at fair value on recurring basis | ' | ' | ' |
Warrant liability | $98,819 | $95,661 | $1,878,316 |
Fair_value_of_financial_instru7
Fair value of financial instruments and marketable securities (Details 2) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Marketable securities accounted for as available-for-sale securities | ' |
Amortized Cost | $133,223,032 |
Gross Unrealized Gains | 40,169 |
Gross Unrealized Losses | -80,636 |
Total Marketable securities | 133,182,565 |
Commercial paper | ' |
Marketable securities accounted for as available-for-sale securities | ' |
Amortized Cost | 24,978,703 |
Gross Unrealized Gains | 20,527 |
Total Marketable securities | 24,999,230 |
U.S. corporate debt securities | ' |
Marketable securities accounted for as available-for-sale securities | ' |
Amortized Cost | 108,244,329 |
Gross Unrealized Gains | 19,642 |
Gross Unrealized Losses | -80,636 |
Total Marketable securities | $108,183,335 |
Fair_value_of_financial_instru8
Fair value of financial instruments and marketable securities (Details 3) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Marketable securities on the balance sheet | ' | ' |
Total Marketable securities, Less Than 12 Months | $82,823,887 | ' |
Total Marketable securities, More Than 12 Months | 50,358,678 | ' |
Marketable securities | ' | 0 |
Commercial paper | ' | ' |
Marketable securities on the balance sheet | ' | ' |
Total Marketable securities, Less Than 12 Months | 24,999,230 | ' |
U.S. corporate debt securities | ' | ' |
Marketable securities on the balance sheet | ' | ' |
Total Marketable securities, Less Than 12 Months | 57,824,657 | ' |
Total Marketable securities, More Than 12 Months | $50,358,678 | ' |
Fair_value_of_financial_instru9
Fair value of financial instruments and marketable securities (Details 4) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | Warrant | |||||
Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | Preferred shares | Preferred shares | Preferred shares | ||||||||
Changes in the fair value of warrant liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | ' | ' | ' | ' | $95,661 | $1,878,316 | $2,340,263 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued in connection with convertible promissory notes | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deemed dividend | -4,416,499 | -18,248,768 | -7,297,125 | 18,248,768 | 18,248,768 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrants issued in connection with convertible promissory notes | ' | ' | ' | ' | -24,248,765 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of warrant liability | ' | ' | ' | ' | 3,155 | -1,782,655 | -461,947 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ending balance | ' | ' | ' | ' | $98,819 | $95,661 | $1,878,316 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility (as a percent) | ' | ' | ' | ' | ' | 87.00% | 88.00% | 69.00% | ' | ' | 87.00% | ' | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 0.02% | 0.16% | 0.25% | 1.71% | 1.18% | 1.62% | ' | ' | ' |
Strike price (in dollars per share) | ' | ' | ' | ' | $128 | $16 | ' | ' | ' | $7.26 | ' | ' | $16 | ' | ' | ' |
Fair value of common shares (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $21.46 | $2.35 | $16 |
Expected life | ' | ' | ' | ' | ' | ' | ' | '2 months 19 days | '1 year | '2 years | '5 years 11 months 23 days | '7 years | '8 years | ' | ' | ' |
Other_comprehensive_income_los2
Other comprehensive income (loss) and accumulated other comprehensive items (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Other comprehensive income (loss) and accumulated other comprehensive items | ' |
Other comprehensive loss before reclassifications | ($40,467) |
Other comprehensive loss | -40,467 |
Balance at the end of the period | -40,467 |
Unrealized Losses On Marketable Securities | ' |
Other comprehensive income (loss) and accumulated other comprehensive items | ' |
Other comprehensive loss before reclassifications | -40,467 |
Other comprehensive loss | -40,467 |
Balance at the end of the period | ($40,467) |
Accounts_payable_and_accrued_e5
Accounts payable and accrued expenses (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts payable and accrued expenses | ' | ' | ' |
Employee compensation, benefits, and related accruals | $3,659,084 | $3,096,475 | $3,492,170 |
Consulting and contracted research | 3,556,350 | 2,515,678 | 6,749,272 |
Professional fees | 1,532,458 | 559,228 | 492,811 |
Accounts payable | 1,017,122 | 621,591 | 1,878,109 |
Other | 440,479 | 230,999 | 437,092 |
Accounts payable and accrued expenses | $10,205,493 | $7,023,971 | $13,049,454 |
Debt_Details
Debt (Details) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | ||
Jul. 31, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Sep. 30, 2009 | Dec. 31, 2012 | |
Secured debt facility | Secured debt facility | Secured debt facility | |||
item | item | ||||
Debt | ' | ' | ' | ' | ' |
Paid outstanding principal and interest, due under promissory notes issued | $2,600,000 | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | 25,000,000 | 25,000,000 | ' |
Number of lenders | ' | ' | 2 | 2 | ' |
Fixed interest rate of notes (as a percent) | ' | ' | 13.65% | ' | 13.65% |
Loss on extinguishment of debt | ' | ($129,963) | ' | ' | ' |
Capital_structure_Details1
Capital structure (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||
Jul. 31, 2012 | Mar. 31, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | 31-May-13 | Dec. 31, 2011 | Mar. 07, 2013 | Feb. 28, 2013 | Mar. 07, 2013 | 31-May-13 | Mar. 07, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Mar. 07, 2013 | |
Series One and Series Two | Series One and Series Two | Series Four | Series Four | Series Five | Series Five | Common stock | Common stock | Series Four and Series Five Convertible Preferred Stock | Convertible promissory notes | Convertible promissory notes | Convertible promissory notes | |||||||||
Warrants | Warrants | Warrants | Series Four | |||||||||||||||||
Capital structure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of convertible promissory notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,000,000 | ' |
Warrants issued to purchase shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,527,675 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount recorded to interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' | ' |
Shares issued and sold | ' | ' | ' | ' | ' | ' | ' | ' | 2,527,675 | ' | 4,497,035 | 375,000 | ' | ' | ' | 9,627,800 | ' | ' | ' | ' |
Aggregate gross proceeds | ' | ' | ' | ' | 29,354,752 | 29,354,752 | ' | ' | ' | ' | 54,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount raised in bridge financing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' | ' |
Gross proceeds raised | ' | 60,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon conversion of convertible promissory notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 502,919 |
Reverse stock split ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.0083 | ' | ' | ' | ' | ' |
Number of shares issued upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,700,487 | 2,095,515 | ' | ' | 14,170,956 | ' | ' | ' |
Gain on extinguishment of shares of Series One, Two and Three stock | 160,000,000 | 3,390,750 | 159,954,069 | 3,390,750 | 159,954,069 | 159,954,069 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12 | ' | ' | ' | $15 | ' | ' | ' | ' |
Aggregate purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, Authorized shares | ' | ' | ' | 125,000,000 | ' | 17,000,000 | 125,000,000 | 216,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial Public Offering | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock shares issuable pursuant to the exercise by the underwriters of an over-allotment option | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,255,800 | ' | ' | ' | ' |
Net proceeds from initial public offering after deducting underwriting discounts and commissions and other offering expenses payable | ' | ' | ' | $131,649,688 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $131,600,000 | ' | ' | ' | ' |
Capital_structure_Details_21
Capital structure (Details 2) (Warrants, USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Series Two | 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | 24,712 | ' |
Exercise price (in dollars per share) | ' | $16 | ' |
Series Two | 2017 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | 50,000 | ' |
Exercise price (in dollars per share) | ' | $16 | ' |
Series Two | 2019 and 2020 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | ' | 56,250 | ' |
Exercise price (in dollars per share) | ' | $16 | ' |
Common stock | 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 3,088 | ' | ' |
Exercise price (in dollars per share) | $128 | ' | ' |
Common stock | 2017 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 6,250 | ' | ' |
Exercise price (in dollars per share) | $128 | ' | ' |
Common stock | 2019 and 2020 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 7,030 | ' | ' |
Exercise price (in dollars per share) | $128 | ' | ' |
Common stock | 2013 and 2014 | ' | ' | ' |
Warrants | ' | ' | ' |
Warrant shares | 645 | 645 | 645 |
Exercise price (in dollars per share) | $2,520 | $2,520 | $2,520 |
Net_income_loss_per_share_Deta
Net income (loss) per share (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jul. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Numerator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ($4,416,499) | ($14,586,578) | ($14,684,535) | ($6,272,044) | ($7,297,125) | ($6,068,072) | ($6,597,861) | ($5,764,646) | $67,608,165 | ($15,388,398) | ($15,550,607) | ($33,687,612) | ($19,963,058) | ($26,235,102) | $30,904,514 |
Deemed dividend | ' | 4,416,499 | ' | 18,248,768 | ' | 7,297,125 | ' | ' | ' | ' | ' | ' | -18,248,768 | ' | ' | ' |
Gain on exchange of convertible preferred stock in connection with recapitalization | 160,000,000 | ' | ' | 3,390,750 | ' | ' | 159,954,069 | ' | ' | ' | ' | ' | 3,390,750 | 159,954,069 | 159,954,069 | ' |
Less beneficial conversion charge | ' | ' | ' | ' | ' | ' | -377,787 | ' | ' | ' | ' | ' | ' | -377,787 | -377,787 | ' |
Less net income attributable to participating securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -139,077,495 | -132,609,918 | -30,878,445 |
Net loss attributable to common stockholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($48,545,630) | $535,729 | $731,262 | $26,069 |
Denominator | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator for basic net income (loss) per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,995,167 | 2,937 | 3,328 | 1,089 |
Effect of dilutive securities Series Three convertible preferred stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,656 | 13,877 | ' |
Denominator for diluted net income (loss) per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,995,167 | 13,593 | 17,205 | 5,729 |
Net income (loss) per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $168 | ($5,992.61) | ($5,290.57) | $52.39 | ($14,140.93) | ($14,289.99) | ($5.40) | $182.41 | $219.76 | $23.95 |
Diluted (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $48.29 | ($5,992.61) | ($5,290.57) | $9.95 | ($14,140.93) | ($14,289.99) | ($5.40) | $39.41 | $42.50 | $4.55 |
Net_income_loss_per_share_Deta1
Net income (loss) per share (Details 2) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Net income (loss) per share | ' | ' | ' | ' |
Total shares excluded from calculation | 3,101,667 | 44,218 | 600,000 | 1,300,000 |
Stock Options | ' | ' | ' | ' |
Net income (loss) per share | ' | ' | ' | ' |
Total shares excluded from calculation | 1,987,860 | 44,218 | ' | ' |
Unvested restricted stock | ' | ' | ' | ' |
Net income (loss) per share | ' | ' | ' | ' |
Total shares excluded from calculation | 1,113,807 | ' | ' | ' |
Stock_option_plan_Details1
Stock option plan (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 05, 2013 | Mar. 05, 2013 | Mar. 05, 2013 | 31-May-13 | Dec. 31, 2012 | 31-May-13 | 31-May-13 | 31-May-13 |
Restricted stock | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | 2013 Stock Incentive Plan | 2013 Stock Incentive Plan | 2013 Stock Incentive Plan | 2009 Stock Incentive Plan | 2009 Stock Incentive Plan | 2013 Long Term Incentive Plan | 2013 Long Term Incentive Plan | 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | |
Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | Restricted stock | Stock options | Common stock | Common stock | Common stock | Common stock | Common stock | ||||||
Minimum | Maximum | |||||||||||||||||
Stock option plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 739,937 | ' | ' | ' | ' | ' |
Number of additional shares authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' |
Number of shares available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,271 | ' | ' | 122,296 |
Number of shares subject to outstanding awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,040,444 | ' |
Annual increase in the number of shares on the first day of the fiscal year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' |
Annual increase in the number of shares outstanding on the first day of the fiscal year (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' | ' |
Number of options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | 42,394 | 46,794 | 39,557 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | 2,007,713 | 5,715 | 8,123 | ' | ' | ' | ' | ' | ' | 735,324 | 4,613 | ' | ' | ' | ' | ' | ' |
Forfeited (in shares) | ' | -62,247 | -10,115 | -875 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | 1,987,860 | 42,394 | 46,794 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in shares) | ' | 61,834 | 33,414 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | ' | ' | $218.40 | $226.80 | $226.80 | $1,149.60 | $1,149.60 | $1,149.60 | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | $218.40 | $490.80 | $10.59 | ' | ' | $10.85 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | ' | $10.85 | $218.40 | $226.80 | $1,149.60 | $1,149.60 | $1,149.60 | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | ' | $10.59 | $218.40 | $226.80 | $1,149.60 | $1,149.60 | $1,149.60 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars per share) | ' | ' | ' | ' | $10.59 | $218.40 | ' | $1,149.60 | $1,149.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | $469.48 | $532.80 | $547.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | $10.85 | $218.40 | $490.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | $17.10 | $604.80 | $757.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | $20.44 | $469.48 | $532.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars per share) | ' | $290.39 | $482.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average remaining contractual term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | '9 years 6 months 4 days | '5 years 7 days | '5 years 8 months 26 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period | ' | '6 years 22 days | '4 years 1 month 20 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars) | ' | $20,652 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars) | ' | $265 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Valuation assumptions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 1.14% | 2.40% | 0.85% | ' | ' | 1.69% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | 87.00% | 87.00% | 87.00% | ' | ' | 88.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | ' | ' | '5 years | '6 years | '6 years | '6 years | '6 years 3 months | '6 years 3 months | ' | ' | ' | ' | ' | ' | ' | ' |
Expected dividend yield (as a percent) | ' | 0.00% | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | ' | $7.86 | $160.65 | $364.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | 1,131,524 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in shares) | -17,717 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested at the end of the period (in shares) | 1,113,807 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Grant Date Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | $10.68 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | $10.63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unvested at the end of the period (in dollars per share) | $10.68 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_option_plan_Details_21
Stock option plan (Details 2) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based compensation expense recorded in the statement of operations | ' | ' | ' | ' |
Share-based compensation expense | $5,142,187 | $1,815,722 | $2,288,000 | $2,817,000 |
Research and development | ' | ' | ' | ' |
Share-based compensation expense recorded in the statement of operations | ' | ' | ' | ' |
Share-based compensation expense | 1,377,640 | 653,462 | ' | ' |
General and administrative | ' | ' | ' | ' |
Share-based compensation expense recorded in the statement of operations | ' | ' | ' | ' |
Share-based compensation expense | $3,764,547 | $1,162,260 | ' | ' |
Stock_option_plan_Details_3
Stock option plan (Details 3) (1998, 2009 and 2013 Plans, USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
1998, 2009 and 2013 Plans | ' | ' |
Additional disclosures | ' | ' |
Unrecognized compensation cost | $21,000,000 | $2,200,000 |
Weighted average remaining service period for recognition of unrecognized compensation cost | '2 years 3 months 11 days | ' |
Collaboration_Revenue_Details
Collaboration Revenue (Details) (USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Aug. 08, 2013 |
Collaboration Revenue. | ' |
Milestone payment received from Roche | $10 |
Selected_quarterly_financial_d5
Selected quarterly financial data (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jul. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Selected quarterly financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration and grant revenue | ' | $16,289,573 | $6,854,212 | $7,141,664 | $6,640,090 | $7,195,076 | $7,585,177 | $12,525,720 | $9,362,686 | $86,423,733 | $4,772,720 | $4,853,008 | $30,285,449 | $27,305,973 | $33,946,063 | $105,412,147 |
Operating expenses | ' | 20,565,188 | 21,307,148 | 15,718,073 | 12,674,520 | 14,250,383 | 15,083,384 | 18,745,957 | 16,983,976 | 18,315,064 | 19,682,313 | 19,848,797 | 57,590,409 | 48,079,724 | 60,754,244 | 74,830,150 |
Income (loss) from operations | ' | -4,275,615 | -14,452,936 | -8,576,409 | -6,034,430 | -7,055,307 | -7,498,207 | -6,220,237 | -7,621,290 | 68,108,669 | -14,909,593 | -14,995,789 | -27,304,960 | -20,773,751 | -26,808,181 | 30,581,997 |
Net income (loss) | ' | -4,416,499 | -14,586,578 | -14,684,535 | -6,272,044 | -7,297,125 | -6,068,072 | -6,597,861 | -5,764,646 | 67,608,165 | -15,388,398 | -15,550,607 | -33,687,612 | -19,963,058 | -26,235,102 | 30,904,514 |
Deemed dividend | ' | -4,416,499 | ' | -18,248,768 | ' | -7,297,125 | ' | ' | ' | ' | ' | ' | 18,248,768 | ' | ' | ' |
Gain on exchange of convertible preferred stock in connection with recapitalization | 160,000,000 | ' | ' | 3,390,750 | ' | ' | 159,954,069 | ' | ' | ' | ' | ' | 3,390,750 | 159,954,069 | 159,954,069 | ' |
Less beneficial conversion charge | ' | ' | ' | ' | ' | ' | -377,787 | ' | ' | ' | ' | ' | ' | -377,787 | -377,787 | ' |
Net income (loss) attributable to common stockholders | ' | ($4,416,499) | ($14,586,578) | ($29,542,553) | ($6,372,044) | ($7,297,125) | $153,508,210 | ($6,597,861) | ' | ' | ' | ' | ($48,545,630) | $139,613,224 | $133,341,180 | $30,904,514 |
Basic (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $168 | ($5,992.61) | ($5,290.57) | $52.39 | ($14,140.93) | ($14,289.99) | ($5.40) | $182.41 | $219.76 | $23.95 |
Diluted (in dollars per share) | ' | ($0.19) | ($5.51) | ($6,527.30) | $1,380.13 | ($1,605.53) | $48.29 | ($5,992.61) | ($5,290.57) | $9.95 | ($14,140.93) | ($14,289.99) | ($5.40) | $39.41 | $42.50 | $4.55 |
Subsequent_events_Details1
Subsequent events (Details) (USD $) | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Aug. 08, 2013 | Dec. 31, 2011 | Nov. 30, 2011 | Dec. 31, 2011 | Aug. 31, 2013 | Dec. 13, 2013 | Dec. 13, 2013 | Jan. 31, 2014 | |
Collaboration agreement | Collaboration agreement | Collaboration agreement | Collaboration agreement | Subsequent event | Subsequent event | Subsequent event | ||
Roche and SMA Foundation | Roche and SMA Foundation | Roche and SMA Foundation | Roche and SMA Foundation | Stock options | Executive officers | Collaboration agreement | ||
Sales milestones | Development event milestones | Stock options | Roche and SMA Foundation | |||||
Maximum | Clinical development milestones | |||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront payment | ' | $30,000,000 | $30,000,000 | ' | ' | ' | ' | ' |
Milestone payments | 10,000,000 | ' | ' | 460,000,000 | 10,000,000 | ' | ' | 7,500,000 |
Expected compensation cost on modification of awards | ' | ' | ' | ' | ' | $600,000 | ' | ' |
Awards vested during the period on waiver of remaining performance condition (as a percent) | ' | ' | ' | ' | ' | ' | 25.00% | ' |
Expected vesting percentage | ' | ' | ' | ' | ' | ' | 2.08% | ' |