Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 07, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Title of 12(b) Security | Common Stock $0.0001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Trading Symbol | DRRX | |
Entity Registrant Name | DURECT CORP | |
Entity Central Index Key | 0001082038 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 27,600,079 | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-31615 | |
Entity Tax Identification Number | 94-3297098 | |
Entity Address, Address Line One | 10260 Bubb Road | |
Entity Address, City or Town | Cupertino | |
Entity Address, State or Province | CA | |
Entity Current Reporting Status | Yes | |
Entity Address, Postal Zip Code | 95014 | |
City Area Code | 408 | |
Local Phone Number | 777-1417 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 31,760 | $ 43,483 |
Short-term investments | 2,985 | |
Short-term restricted investments | 150 | |
Accounts receivable, net | 1,304 | 3,423 |
Inventories, net | 2,262 | 2,113 |
Prepaid expenses and other current assets | 1,829 | 2,375 |
Total current assets | 40,290 | 51,394 |
Property and equipment, net | 149 | 188 |
Operating lease right-of-use assets | 2,043 | 1,943 |
Goodwill | 6,169 | 6,169 |
Long-term restricted investments | 150 | |
Other long-term assets | 6 | 256 |
Total assets | 48,657 | 60,100 |
Current liabilities: | ||
Accounts payable | 980 | 3,106 |
Accrued liabilities | 7,779 | 7,896 |
Deferred revenue, current portion | 178 | |
Term loan, current portion, net | 20,721 | 21,170 |
Operating lease liabilities, current portion | 1,324 | 1,832 |
Warrant liabilities | 10,448 | |
Total current liabilities | 41,430 | 34,004 |
Operating lease liabilities, non-current portion | 803 | 260 |
Other long-term liabilities | 924 | 851 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock | 23 | 23 |
Additional paid-in capital | 590,033 | 586,357 |
Accumulated other comprehensive loss | (6) | (13) |
Accumulated deficit | (584,550) | (561,382) |
Stockholders’ equity | 5,500 | 24,985 |
Total liabilities and stockholders’ equity | $ 48,657 | $ 60,100 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Total revenues | $ 2,081,000 | $ 2,076,000 | $ 4,135,000 | $ 3,991,000 |
Operating expenses: | ||||
Cost of product revenues | $ 359,000 | $ 393,000 | $ 747,000 | $ 728,000 |
Type of cost, good or service [extensible list] | Product Revenue, Net [Member] | Product Revenue, Net [Member] | Product Revenue, Net [Member] | Product Revenue, Net [Member] |
Research and development | $ 7,946,000 | $ 8,817,000 | $ 16,539,000 | $ 17,028,000 |
Selling, general and administrative | 3,827,000 | 3,952,000 | 7,922,000 | 7,687,000 |
Total operating expenses | 12,132,000 | 13,162,000 | 25,208,000 | 25,443,000 |
Loss from operations | (10,051,000) | (11,086,000) | (21,073,000) | (21,452,000) |
Other income (expense): | ||||
Interest and other income | 511,000 | 127,000 | 1,028,000 | 181,000 |
Change in fair value of warrant liabilities | (892,000) | 1,585,000 | ||
Interest and other expenses | (749,000) | (592,000) | (1,475,000) | (1,122,000) |
Issuance cost for warrants | (1,200,000) | |||
Loss on issuance of warrants | (2,033,000) | |||
Other income (expense), net | (1,130,000) | (465,000) | (2,095,000) | (941,000) |
Net loss | (11,181,000) | (11,551,000) | (23,168,000) | (22,393,000) |
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes | 1,000 | 4,000 | 7,000 | (15,000) |
Total comprehensive loss | $ (11,180,000) | $ (11,547,000) | $ (23,161,000) | $ (22,408,000) |
Net loss per share | ||||
Basic | $ (0.46) | $ (0.51) | $ (0.96) | $ (0.98) |
Diluted | $ (0.46) | $ (0.51) | $ (0.96) | $ (0.98) |
Weighted-average shares used in computing net loss per share | ||||
Weighted average shares used to compute basic net loss per share | 24,508 | 22,774 | 24,140 | 22,771 |
Diluted | 24,508 | 22,774 | 24,377 | 22,771 |
Collaborative Research and Development and Other Revenue [Member] | ||||
Total revenues | $ 508,000 | $ 606,000 | $ 1,151,000 | $ 1,101,000 |
Product Revenue, Net [Member] | ||||
Total revenues | $ 1,573,000 | $ 1,470,000 | $ 2,984,000 | $ 2,890,000 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive loss [Member] | Accumulated deficit [Member] |
Beginning balance at Dec. 31, 2021 | $ 57,782 | $ 23 | $ 583,818 | $ (10) | $ (526,049) |
Beginning balance, shares at Dec. 31, 2021 | 22,768 | ||||
Issuance of common stock upon exercise of stock options | 8 | 8 | |||
Issuance of common stock upon exercise of stock options, Shares | 1 | ||||
Stock-based compensation expense from stock options and ESPP shares | 678 | 678 | |||
Net loss | (10,842) | (10,842) | |||
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes | (19) | (19) | |||
Ending balance at Mar. 31, 2022 | 47,607 | $ 23 | 584,504 | (29) | (536,891) |
Ending balance, shares at Mar. 31, 2022 | 22,769 | ||||
Beginning balance at Dec. 31, 2021 | 57,782 | $ 23 | 583,818 | (10) | (526,049) |
Beginning balance, shares at Dec. 31, 2021 | 22,768 | ||||
Net loss | (22,393) | ||||
Ending balance at Jun. 30, 2022 | 36,704 | $ 23 | 585,148 | (25) | (548,442) |
Ending balance, shares at Jun. 30, 2022 | 22,776 | ||||
Beginning balance at Mar. 31, 2022 | 47,607 | $ 23 | 584,504 | (29) | (536,891) |
Beginning balance, shares at Mar. 31, 2022 | 22,769 | ||||
Issuance of common stock upon exercise of stock options | 27 | 27 | |||
Issuance of common stock upon exercise of stock options, Shares | 7 | ||||
Stock-based compensation expense from stock options and ESPP shares | 617 | 617 | |||
Net loss | (11,551) | (11,551) | |||
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes | 4 | 4 | |||
Ending balance at Jun. 30, 2022 | 36,704 | $ 23 | 585,148 | (25) | (548,442) |
Ending balance, shares at Jun. 30, 2022 | 22,776 | ||||
Beginning balance at Dec. 31, 2022 | 24,985 | $ 23 | 586,357 | (13) | (561,382) |
Beginning balance, shares at Dec. 31, 2022 | 22,785 | ||||
Issuance of common stock in the February 2023 registered direct offering/ pursuant to the 2021 Sales Agreement, shares | 1,700 | ||||
Stock-based compensation expense from stock options and ESPP shares | 2,338 | 2,338 | |||
Net loss | (11,987) | (11,987) | |||
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes | 6 | 6 | |||
Ending balance at Mar. 31, 2023 | 15,342 | $ 23 | 588,695 | (7) | (573,369) |
Ending balance, shares at Mar. 31, 2023 | 24,485 | ||||
Beginning balance at Dec. 31, 2022 | 24,985 | $ 23 | 586,357 | (13) | (561,382) |
Beginning balance, shares at Dec. 31, 2022 | 22,785 | ||||
Net loss | (23,168) | ||||
Ending balance at Jun. 30, 2023 | 5,500 | $ 23 | 590,033 | (6) | (584,550) |
Ending balance, shares at Jun. 30, 2023 | 24,609 | ||||
Beginning balance at Mar. 31, 2023 | 15,342 | $ 23 | 588,695 | (7) | (573,369) |
Beginning balance, shares at Mar. 31, 2023 | 24,485 | ||||
Issuance of common stock in the February 2023 registered direct offering/ pursuant to the 2021 Sales Agreement | 658 | 658 | |||
Issuance of common stock in the February 2023 registered direct offering/ pursuant to the 2021 Sales Agreement, shares | 118 | ||||
Issuance of common stock upon exercise of stock options and from the ESPP | 23 | 23 | |||
Issuance of common stock upon exercise of stock options and from the ESPP, Share | 6 | ||||
Stock-based compensation expense from stock options and ESPP shares | 657 | 657 | |||
Net loss | (11,181) | (11,181) | |||
Net change in unrealized loss on available-for-sale securities, net of reclassification adjustments and taxes | 1 | 1 | |||
Ending balance at Jun. 30, 2023 | $ 5,500 | $ 23 | $ 590,033 | $ (6) | $ (584,550) |
Ending balance, shares at Jun. 30, 2023 | 24,609 |
Condensed Statements of Stock_2
Condensed Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 13 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Cash flows from operating activities | |||
Net loss | $ (23,168,000) | $ (22,393,000) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 78,000 | 69,000 | |
Stock-based compensation | 1,261,000 | 1,296,000 | |
Amortization of debt issuance cost | 236,000 | 238,000 | |
Net amortization on investments | 66,000 | 13,000 | |
Changes in operating lease liabilities | (65,000) | (33,000) | |
Change in fair value of warrant liabilities | (1,585,000) | ||
Loss on issuance of warrants | 2,033,000 | ||
Changes in assets and liabilities: | |||
Accounts receivable | 2,119,000 | 5,273,000 | |
Inventories | (150,000) | (264,000) | |
Prepaid expenses and other assets | 796,000 | 574,000 | |
Accounts payable | (2,126,000) | 1,919,000 | |
Accrued liabilities | 1,721,000 | (2,234,000) | |
Deferred revenue | 178,000 | (98,000) | |
Total adjustments | 4,562,000 | 6,753,000 | |
Net cash used in operating activities | (18,606,000) | (15,640,000) | |
Cash flows from investing activities | |||
Purchases of property and equipment | (39,000) | (64,000) | |
Purchases of available-for-sale securities | (3,044,000) | ||
Proceeds from maturities of available-for-sale securities | 12,961,000 | ||
Net cash (used in) provided by investing activities | (3,083,000) | 12,897,000 | |
Cash flows from financing activities | |||
Payments on equipment financing obligations | (1,000) | (1,000) | |
Payments on term loan principal | (714,000) | ||
Net proceeds from issuances of common stock pursuant to the 2021 Sales Agreement | 658,000 | ||
Net proceeds from issuance of common stock upon exercise of stock options and from the ESPP | 23,000 | 35,000 | |
Proceeds from issuances of warrants and common stock in the February 2023 registered direct offering | 10,000,000 | ||
Net cash provided by financing activities | 9,966,000 | 34,000 | |
Net decrease in cash, cash equivalents, and restricted cash | (11,723,000) | (2,709,000) | |
Cash, cash equivalents, and restricted cash, beginning of the period | [1] | 43,633,000 | 49,994,000 |
Cash, cash equivalents, and restricted cash, end of the period | [1] | $ 31,910,000 | $ 47,285,000 |
[1] Includes restricted cash of $ 150,000 included in short term restricted investments and long term restricted investments the condensed balance sheets at June 30, 2023 and December 31, 2022, respectively. |
Condensed Statement of Cash Flo
Condensed Statement of Cash Flows (Parenthetical) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Restricted Cash and Cash Equivalents, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Restricted Investments, Noncurrent | Restricted Investments, Noncurrent |
Long Term Restricted Investments [Member] | ||
Restricted cash | $ 150,000 | $ 150,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Nature of Operations DURECT Corporation (the “Company”) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company committed to transforming the treatment of acute organ injury and chronic liver diseases by advancing novel and potentially lifesaving therapies based on its endogenous epigenetic regulator program. Larsucosterol (also known as DUR-928), the Company's lead drug candidate, binds to and inhibits the activity of DNA methyltransferases (DNMTs), epigenetic enzymes which are elevated and associated with hypermethylation found in alcohol-associated hepatitis (AH) patients. Larsucosterol is in clinical development for the potential treatment of AH, for which FDA has granted a Fast Track Designation; non-alcoholic steatohepatitis (NASH) is also being explored. In addition, POSIMIR ® (bupivacaine solution) for infiltration use, a non-opioid analgesic utilizing the innovative SABER ® platform technology, is FDA-approved and has been exclusively licensed to Innocoll Pharmaceuticals for commercialization in the United States. The Company also manufactures and sells osmotic pumps used in laboratory research, and manufactures certain excipients for certain clients for use as raw materials in their products. Basis of Presentation These condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). The unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at June 30, 2023, the operating results and comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022. The balance sheet as of December 31, 2022 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Reverse Stock Split On December 5, 2022, the Company effected a 1-for-10 reverse stock split of its outstanding common stock . The reverse stock split also affected our outstanding stock options, purchase rights and equity incentive plans and resulted in the shares underlying such instruments being reduced and the exercise price being increased proportionately. For all financial statement periods presented, references to number of shares, net loss per share, stock price and exercise price have been conformed to reflect the effects of the Company’s 1-for-10 reverse stock split , effective December 5, 2022, unless otherwise specified herein. Liquidity and Need to Raise Additional Capital As of June 30, 2023, the Company had an accumulated deficit of $ 584.6 milli on as well as negative cash flows from operating activities. Presently, the Company does not have sufficient cash resources to meet its plans for the next twelve months following the issuance of these financial statements. The Company will continue to require substantial funds to continue research and development, including clinical trials of its product candidates. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management’s plans in order to meet its operating cash flow requirements include seeking additional collaborative agreements for certain of its programs as well as financing activities such as public offerings and private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected, and the Company may have to cease operations. As further described in Note 6, the Company classified the remaining balance of its term loan as a current liability on th e Company’s balance sheet as of June 30, 2023 and December 31, 2022 due to recurring losses, liquidity concerns and a subjective acceleration clause in the Company’s Loan Agreement. These financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern. Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company capitalizes inventories produced in preparation for product launches after receiving regulatory approval on a product. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to new information that suggests that the inventory will not be saleable. If the Company is able to subsequently sell products made with raw materials that were previously written down, the Company will report an unusually high gross profit as there will be no or little associated cost of goods for these materials. The Company’s inventories consisted of the following (in thousands): June 30, December 31, Raw materials $ 167 $ 168 Work in process 1,008 1,151 Finished goods 1,087 794 Total inventories $ 2,262 $ 2,113 Leases ASC 842 requires the Company to recognize an operating lease right-of-use asset and corresponding operating lease liability for the Company’s leased properties. The Company’s operating lease right-of-use assets and liabilities are recognized under ASC 842 based on the present value of lease payments over the remaining lease term at the lease commencement date. In determining the net present value of lease payments, we estimate the incremental borrowing rate based on the information available, including remaining lease term. As of June 30, 2023, the weighted-average remaining lease term was 3.07 years for the Company’s leased properties. Revenue Recognition Product Revenue, Net The Company manufactures and sells ALZET osmotic pumps used in laboratory research, and manufactures and sells certain excipients used by pharmaceutical companies as raw materials in certain of their products, including POSIMIR, a marketed animal health product and Methydur. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Trade Discounts and Allowances: The Company provides certain customers with discounts that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns: The Company generally offers customers a limited right of return for products that have been purchased. The Company estimates the amount of its product sales that are probable of being returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities primarily using its historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development and Other Revenue The Company enters into license agreements, under which it licenses certain rights to its product candidates or products to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; reimbursement of development costs incurred by the Company under approved work plans; development, regulatory, intellectual property and commercial milestone payments; payments for manufacturing supply services the Company provides itself or through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments results in collaborative research and development revenues, except for revenues from royalties on net sales of licensed products and earn-out revenues, which are classified as other revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. For arrangements that are determined to include multiple performance obligations, the Company must develop assumptions that require judgment to determine the estimated stand-alone selling price for each performance obligation identified. These assumptions may include: forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company expects to recognize revenue for the variable consideration currently being constrained when it is probable that a significant revenue reversal will not occur. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from the transaction price allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For performance obligations comprised of licenses that are bundled with other promises, the Company utilizes its judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the Company applies an appropriate method of measuring progress for purposes of recognizing related revenues from the allocated transaction price. For performance obligations recognized over time, the Company evaluates the measure of progress each reporting period and recognizes revenues on a cumulative catch-up basis as collaborative research and development revenues. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Manufacturing Supply Services: Arrangements that include a promise for future supply of raw materials or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to the customer and if so, they are accounted for as separate performance obligations and allocated a portion of the transaction price based on the estimated standalone selling price of the material right. If the Company is entitled to additional payments when the customer exercises these options, the deferred transaction price and any additional payments are recorded in collaborative research and development revenue when the customer obtains control of the goods. Royalties and Earn-outs: For arrangements that include sales-based royalties or earn-outs, including milestone payments based on first commercial sale or the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized material royalty revenue resulting from the Company’s collaborative arrangements or material earn-out revenues from any of the Company’s agreements. Research and development services: Revenue from research and development services that are determined to represent a distinct performance obligation with the Company’s third-party collaborators is recognized over time as the related research and development services are performed using an appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and recognizes revenue on a cumulative catch-up basis, as collaborative research and development revenue. Research and development expenses under the collaborative research and development agreements generally approximate or exceed the revenue recognized under such agreements over the term of the respective agreements. Deferred revenue may result when the Company does not expend the required level of effort during a specific period in comparison to funds received under the respective agreement. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Total revenue by geographic region based on customers’ locations for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three months ended Six months ended 2023 2022 2023 2022 United States $ 1,143 $ 1,398 $ 2,421 2,605 Europe 613 414 1,044 $ 752 Japan 112 111 282 366 Other 213 153 388 268 Total $ 2,081 $ 2,076 $ 4,135 $ 3,991 Prepaid and Accrued Clinical Costs The Company incurs significant costs associated with third party consultants and organizations for pre-clinical studies, clinical trials, contract research, regulatory advice and other research and development-related services. The Company is required to estimate periodically the cost of services rendered but unbilled based on management’s estimates. Estimates are determined each reporting period by reviewing the terms and conditions of the underlying contracts, reviewing open purchase orders and by having detailed discussions with internal clinical personnel and third-party service providers as to the nature and status of the services performed in relation to amounts billed. The costs for unbilled services are estimated by applying the rates and fees applicable in the underlying contracts. If these good faith estimates are inaccurate, actual expenses incurred could materially differ from these estimates Prepaid and Accrued Manufacturing Costs The Company incurs significant costs associated with third party consultants and organizations for manufacturing, validation, testing and other research and development-related services. The Company is required to estimate periodically the cost of services rendered but unbilled based on management’s estimates. Estimates are determined each reporting period by reviewing the terms and conditions of the underlying contracts, reviewing open purchase orders and by having detailed discussions with internal personnel and third-party service providers as to the nature and status of the services performed in relation to amounts billed. The costs for unbilled services are estimated by applying the rates and fees applicable in the underlying contracts. If these good faith estimates are inaccurate, actual expenses incurred could materially differ from these estimates. Research and development expenses Research and development expenses are primarily comprised of salaries and benefits associated with research and development personnel, overhead and facility costs, preclinical and non-clinical development costs, clinical trial and related clinical manufacturing costs, contract services, and other outside costs. Research and development costs are expensed as incurred. Research and development costs paid to third parties under sponsored research agreements are recognized as the related services are performed. In addition, research and development expenses incurred that are reimbursed by the Company’s partners are recorded as collaborative research and development revenue. Comprehensive Loss Components of other comprehensive loss are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been disclosed in the Company’s Statements of Operations and Comprehensive Loss. Common Stock Warrants The Company reviews the terms of debt instruments, equity instruments, and other financing arrangements to determine whether there are embedded derivative features, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Additionally, in connection with the issuance of financing instruments, the Company may issue freestanding options and warrants. The Company accounts for its common stock warrants in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging (“ASC 815”). Based upon the provisions of ASC 480 and ASC 815, the Company accounts for common stock warrants and pre-funded warrants as current liabilities if the warrant fails the equity classification criteria. Common stock warrants and pre-funded warrants classified as liabilities are initially recorded at fair value on the grant date and remeasured at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the statements of operations. The Company values its pre-funded warrants and common stock warrants classified as liabilities using the Black-Scholes option pricing model or other acceptable valuation models, including the Monte-Carlo simulation model. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts): Three months ended Six months ended 2023 2022 2023 2022 Basic loss per share computation: Net loss $ ( 11,181 ) $ ( 11,551 ) $ ( 23,168 ) $ ( 22,393 ) Weighted average number of shares outstanding - basic 24,508 22,774 24,140 22,771 Net loss per share - basic $ ( 0.46 ) $ ( 0.51 ) $ ( 0.96 ) $ ( 0.98 ) Diluted loss per share computation: Net loss $ ( 11,181 ) $ ( 11,551 ) $ ( 23,168 ) $ ( 22,393 ) Change in fair value of warrant liabilities — — 258 — Net loss adjusted for change in fair value of warrant liabilities $ ( 11,181 ) $ ( 11,551 ) $ ( 23,426 ) $ ( 22,393 ) Weighted average shares used to compute basic net loss per share 24,508 22,774 24,140 22,771 Dilutive effect of pre-funded warrants — — 237 — Weighted average shares used to compute diluted net loss per share 24,508 22,774 24,377 22,771 Net loss per share - diluted $ ( 0.46 ) $ ( 0.51 ) $ ( 0.96 ) $ ( 0.98 ) Options to purchase approximately 3.1 million and 3.0 million shares of common stock were excluded from the denominator in the calculation of diluted net loss share for the three and six months ended June 30, 2023, respectively, as the effect would be anti-dilutive. Options to purchase approximately 2.79 million and 2.62 million shares of common stock were excluded from the denominator in the calculation of diluted net loss share for the three and six months ended June 30, 2022, respectively, as the effect would be anti-dilutive. In addition, the dilutive effect of pre-funded warrants was 237,000 shares for the six months ended June 30, 2023. Pre-funded warrants to purchase 300,000 shares were also outstanding during the three months ended June 30, 2023, but were not included in the computation of diluted net loss per share for the three months ended June 30, 2023 because the effect would be anti-dilutive. Additional common warrants to purchase 2.0 million and 1.6 million shares wer e also outstanding during the three and six months ended June 30, 2023, but were not included in the computation of diluted net loss per share because the effect would be anti-dilutive. Recently Adopted Accounting Pronouncements In August 2020, FASB issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) — Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU- 2020-06"), which, among other things, provides guidance on how to account for contracts on an entity’s own equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, the ASU eliminated the need for the Company to assess whether a contract on the entity’s own equity (1) permits settlement in unregistered shares, (2) whether counterparty rights rank higher stockholder’s rights, and (3) whether collateral is required. In addition, the ASU requires incremental disclosure related to contracts on the entity’s own equity and clarifies the treatment of certain financial instruments accounted for under this ASU on earnings per share. This ASU may be applied on a full retrospective of modified retrospective basis. For smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption of the ASU is permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted this standard on January 1, 2023 and the adoption did not have any effect on the financial statements as the Company did not have any such outstanding instruments as of January 1, 2023. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This standard is effective for fiscal years beginning after December 15, 2022 for small reporting companies, including interim reporting periods within those years and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted. The Company adopted the standard on January 1, 2023 and the adoption did not have a material effect on the financial statements. |
Strategic Agreements
Strategic Agreements | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Strategic Agreements | Note 2. Strategic Agreements The collaborative research and development and other revenues associated with the Company’s collaborators or counterparties were $ 508,000 and $ 1.2 m illion for the three and six months ended June 30, 2023, compared with $ 606,000 and $ 1.1 million for the corresponding periods in 2022, respectively. The collaborative research and development and other revenue included (a) amounts related to earn-out revenue from Indivior UK Limited ("Indivior") with respect to PERSERIS net sales; (b) feasibility programs and research and development activities funded by our collaborators and (c) royalty revenue from Orient Pharma Co., Ltd. (“Orient Pharma”) with respect to Methydur net sales. Agreement with Innocoll On December 21, 2021, the Company entered into a license agreement (the “Innocoll Agreement”) with Innocoll Pharmaceuticals Limited (“Innocoll”). Pursuant to the Innocoll Agreement, the Company has granted Innocoll an exclusive, royalty-bearing, sublicensable right and license to develop, manufacture and commercialize in the United States, POSIMIR ® , the Company’s FDA-approved post-surgical pain product, with respect to all uses and applications in humans. The Innocoll Agreement provides for the assignment of the Company’s supply agreement with its contract manufacturing organization to Innocoll and also provides Innocoll with the right, within the United States, to expand the approved indications of POSIMIR. The Company retains, outside the United States, all of the global rights to POSIMIR. Upon execution of the Innocoll Agreement, Innocoll paid the Company an initial nonrefundable, upfront fee of $ 4.0 million as well as a fee in the amount of $ 1.3 million primarily to cover the manufacturing supplies and excipients and certain equipment transferred to Innocoll pursuant to the terms of the Innocoll Agreement, and certain recently incurred DURECT expenses the parties negotiated for Innocoll to reimburse. The Innocoll Agreement includes customary representations and warranties on behalf of the Company and Innocoll, including representations as to the licensed intellectual property, regulatory matters and compliance with applicable laws. The Innocoll Agreement also provides for certain mutual indemnities for breaches of representations, warranties and covenants. The Company also evaluated Innocoll’s future purchases of an excipient from the Company and concluded that these purchases are option rights, and are at market rates, and do not constitute a material right performance obligation. As such, these future purchases have been excluded from the allocation of transaction price and the Company will account for them as separate contracts when and if Innocoll elects to issue purchase orders for the excipient. During December 2021, the upfront fee of $ 4.0 million as well as a fee in the amount of $ 1.2 million to cover reimbursed expenses, the manufacturing supplies and excipients transferred to Innocoll pursuant to the terms of the Innocoll Agreement was recognized as revenue when the performance obligations were satisfied in December 2021 and $ 0.1 million was recorded as a net reduction in equipment in December 2021. At December 31, 2021, the Company included $ 5.3 million due from Innocoll in accounts receivable on its balance sheet; these funds were received in January 2022. In August 2022, the Company was issued a new patent by the U.S. Patent and Trademark Office, extending U.S. patent coverage of POSIMIR to at least 2041, resulting in an $ 8.0 million milestone payment by Innocoll to the Company. In September 2022, Innocoll launched POSIMIR in the U.S., triggering a $ 2.0 million milestone payment to the Company for the first commercial sale of POSIMIR. Thus, the Company recognized $ 10.0 million of milestone revenue under the agreement with Innocoll during the twelve months ended December 31, 2022. As the commercial launch of POSIMIR progresses, the Company will receive tiered, low double-digit to mid-teen royalties on net product sales of POSIMIR in the United States. The Company may earn additional milestone payments of up to $ 122.0 million in the aggregate, depending on the achievement of certain regulatory, commercial, and intellectual property milestones with respect to POSIMIR. Patent Purchase Agreement with Indivior In September 2017, we entered into an agreement with Indivior (the “Indivior Agreement”), under which we assigned to Indivior certain patents that may provide further intellectual property protection for PERSERIS, Indivior’s extended-release injectable suspension for the treatment of schizophrenia in adults. In consideration for such assignment, Indivior made non-refundable upfront and milestone payments to DURECT totaling $ 17.5 million. Additionally, under the terms of the agreement with Indivior, DURECT receives quarterly earn-out payments into 2026 that are based on a single digit percentage of U.S. net sales of PERSERIS. Indivior commercially launched PERSERIS in the U.S. in February 2019. The Indivior Agreement contains customary representations, warranties and indemnities of the parties. Amounts recognized during the three and six months ended June 30, 2023 and 2022 related to earn-out revenues from PERSERIS have been immaterial and are included in collaborative research and development and other revenue. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Note 3. Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company follows a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of inputs are the following: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial instruments are valued using quoted prices in active markets or based upon other observable inputs. Money market funds are classified as Level 1 financial assets. Certificates of deposit, commercial paper, municipal bonds, corporate debt securities, and U.S. Government agency securities are classified as Level 2 financial assets. The fair value of the Level 2 assets is estimated using pricing models using current observable market information for similar securities. The Company’s Level 2 investments include U.S. government-backed securities and corporate securities that are valued based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The fair value of commercial paper is based upon the time to maturity and discounted using the three-month treasury bill rate. The average remaining maturity of the Company’s Level 2 investments as of June 30, 2023 is less than twelve months and these investments are rated by S&P and Moody’s at AAA or AA- for securities and A1, A2, P1 or P2 for commercial paper. The following is a summary of available-for-sale securities as of June 30, 2023 and December 31, 2022 (in thousands): June 30, Amortized Unrealized Unrealized Estimated Money market funds $ 697 $ — $ — $ 697 Certificates of deposit 150 — — 150 Commercial paper 30,300 — ( 7 ) 30,293 U.S. Government agencies 1,489 1 — 1,490 $ 32,636 $ 1 $ ( 7 ) $ 32,630 Reported as: Cash and cash equivalents $ 29,500 $ 1 $ ( 6 ) $ 29,495 Short-term investments 2,986 — ( 1 ) 2,985 Short-term restricted investments 150 — — 150 $ 32,636 $ 1 $ ( 7 ) $ 32,630 December 31, Amortized Unrealized Unrealized Estimated Money market funds $ 633 $ — $ — $ 633 Certificates of deposit 150 — — 150 Commercial paper 40,478 — ( 13 ) 40,465 $ 41,261 $ — $ ( 13 ) $ 41,248 Reported as: Cash and cash equivalents $ 41,111 $ — $ ( 13 ) $ 41,098 Long-term restricted investments 150 — — 150 $ 41,261 $ — $ ( 13 ) $ 41,248 The following is a summary of the cost and estimated fair value of available-for-sale securities at June 30, 2023, by contractual maturity (in thousands): June 30, Amortized Estimated Mature in one year or less $ 31,939 $ 31,933 Mature after one year through five years — — $ 31,939 $ 31,933 There were no securities that have had an unrealized loss for more than 12 months as of June 30, 2023. As of June 30, 2023, unrealized losses on available-for-sale investments are not attributed to credit risk and are considered to be temporary. The Company believes that it is more-likely-than-not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value. Warrant Liabilities In February 2023, the Company issued pre-funded warrants to purchase 300,000 shares of common stock and common warrants to purchase an aggregate of 2,000,000 shares of common stock in a registered direct offering. The pre-funded warrants are accounted for as current liabilities on the balance sheet and are adjusted to estimated fair value at period end through “other income (expense)” on the statement of operations. The estimated fair value of the pre-funded warrants was $ 1.7 million, $ 1.4 million and $ 1.5 million as of February 8, 2023 (i.e., the issuance date), March 31, 2023 and June 30, 2023, respectively. The Company calculated the estimated fair value of the pre-funded warrants using a Black-Scholes option pricing model with the following key assumptions: 2/8/2023 (issuance) March 31, 2023 June 30, 2023 Common stock price $ 5.81 $ 4.53 $ 4.95 Exercise price per share $ 0.00001 $ 0.00001 $ 0.00001 Expected volatility 86.60 % 86.20 % 89.10 % Risk-free interest rate 3.82 % 3.65 % 4.22 % Contractual term (in years) 5.00 4.90 4.60 Expected dividend yield — % — % — % The common warrants are accounted for as current liabilities on the balance sheet and are adjusted to fair value at period end through “other income (expense)” on the statement of operations. The estimated fair value of the common warrants was $ 10.3 million, $ 8.2 million and $ 9.0 million as of February 8, 2023 (i.e., the issuance date), March 31, 2023 and June 30, 2023, respectively. The Company calculated the fair value of the common warrants using a Monte Carlo simulation model with the following key assumptions. In all cases, the Company took the likelihood of achieving certain clinical events and related impact on the Company's common stock price into account. 2/8/2023 (issuance) March 31, 2023 June 30, 2023 Common stock price $ 5.81 $ 4.53 $ 4.95 Exercise price per share $ 5.00 $ 5.00 $ 5.00 Expected volatility 86.60 % 86.20 % 89.10 % Risk-free interest rate 3.82 % 3.65 % 4.22 % Contractual term (in years) 5.00 4.90 4.60 Expected dividend yield — % — % — % |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Note 4. Accrued Liabilities Accrued liabilities as of June 30, 2023 and December 31, 2022 were comprised as follows (in thousands): June 30, December 31, Accrued compensation and benefits $ 2,430 $ 3,970 Accrued clinical costs 2,117 1,966 Accrued contract research and manufacturing costs 2,379 861 Others 853 1,099 Total $ 7,779 $ 7,896 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 5. Stock-Based Compensation As of June 30, 2023, the Company has two stock-based compensation plans. The stock-based compensation cost that has been included in the statements of operations and comprehensive loss is shown as below (in thousands): Three months ended Six months ended 2023 2022 2023 2022 Cost of product revenues $ 5 $ 5 $ 9 $ 10 Research and development 301 296 593 626 Selling, general and administrative 353 317 659 660 Total stock-based compensation $ 659 $ 618 $ 1,261 $ 1,296 As of June 30, 2023 and December 31, 2022, $ 15,000 and $ 16,000 of stock-based compensation cost were capitalized in inventory on the Company’s balance sheets for each period, respectively. The Company uses the Black-Scholes option pricing model to value its stock options. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. The Company considered its historical volatility in developing its estimate of expected volatility. The Company used the following assumptions to estimate the fair value of stock options granted and shares purchased under its employee stock purchase plan for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 Stock Options Risk-free rate 3.96 % 2.9 - 3.0 % 3.96 - 4.07 % 1.8 - 3.0 % Expected dividend yield — — — — Expected life of option (in years) 7.3 7.0 - 7.3 7.0 - 7.5 7.0 - 7.3 Volatility 88 % 85 - 86 % 87 - 88 % 83 - 86 % Three months ended Six months ended 2023 2022 2023 2022 Employee Stock Purchase Plan Risk-free rate 5.14 % 1.49 % 4.58 - 5.14 % 0.04 - 1.49 % Expected dividend yield — — — — Expected life of option (in years) 0.5 0.5 0.5 0.5 Volatility 88 % 80 % 88 - 104 % 56 - 80 % |
Term Loan
Term Loan | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Term Loan | Note 6. Term Loan In July 2016, the Company entered into a $ 20.0 million secured single-draw term loan (as amended, the “Loan Agreement”) with Oxford Finance LLC (“Oxford Finance”). The Company and Oxford Finance entered into five subsequent amendments to the Loan Agreement in February 2018, November 2018, December 2019, March 2021 and May 2021. For amendments 1-3 and 5, the Company paid Oxford Finance loan modification fees of $ 100,000 , $ 900,000 , $ 825,000 and $ 712,500 , respectively. As amended, the Loan Agreement provides for interest only payments through June 1, 2023, followed by consecutive monthly payments of principal and interest in arrears starting on June 1, 2023 and continuing through the maturity date of the term loan of September 1, 2025 . The Loan Agreement provides for a floating interest rate ( 7.95 % initially and 12.55 % as of June 30, 2023) based on an index rate plus a spread . In addition, a payment equal to 10 % of the principal amount of the term loan is due when the term loan becomes due or upon the prepayment of the facility. If the Company elects to prepay the loan, there is also a prepayment fee of between 0.75 % and 2.5 % of the principal amount of the term loan depending on the timing of prepayment. The $ 150,000 facility fee that was paid at the original closing, the loan modification fees and other debt offering/issuance costs have been recorded as debt discount on the Company’s balance sheets and together with the final $ 2.0 million payment are being amortized to interest expense using the effective interest method over the revised term of the loan. The term loan is secured by substantially all of the assets of the Company, except that the collateral does not include any intellectual property (including licensing, collaboration and similar agreements relating thereto), and certain other excluded assets. The Loan Agreement contains customary representations, warranties and covenants by the Company, which covenants limit the Company’s ability to convey, sell, lease, transfer, assign or otherwise dispose of certain assets of the Company; engage in any business other than the businesses currently engaged in by the Company or reasonably related thereto; liquidate or dissolve; make certain management changes; undergo certain change of control events; create, incur, assume, or be liable with respect to certain indebtedness; grant certain liens; pay dividends and make certain other restricted payments; make certain investments; and make payments on any subordinated debt. The Loan Agreement also contains customary indemnification obligations and customary events of default, including, among other things, the Company’s failure to fulfill certain obligations of the Company under the Loan Agreement and the occurrence of a material adverse change which is defined as a material adverse change in the Company’s business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan, or a material impairment in the perfection or priority of lender’s lien in the collateral or in the value of such collateral. In the event of default by the Company under the Loan Agreement, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the Loan Agreement, which could harm the Company’s financial condition. The conditionally exercisable call option related to the event of default is considered to be an embedded derivative which is required to be bifurcated and accounted for as a separate financial instrument. In the periods presented, the value of the embedded derivative is not material, but could become material in future periods if an event of default became more probable than is currently estimated. As of June 30, 2023, the Company was in compliance with all material covenants under the Loan Agreement and there had been no material adverse change. In accordance with ASC 470-10-45-2, the term loan was classified as a current liability on the Company’s balance sheet as of June 30, 2023 and December 31, 2022 due to recurring losses, liquidity concerns and a subjective acceleration clause in the Company’s Loan Agreement. The fair value of the term loan approximates the carrying value. Future maturities due under the term loan as of June 30, 2023, are as follows (in thousands): Six months ended December 31, 2023 $ 4,286 2024 8,571 2025 8,429 Total minimum payments 21,286 Less unamortized debt discount and accrued final payment ( 565 ) Carrying value of term loan, net 20,721 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 7. Commitments Operating Leases The Company has lease arrangements for its facilities as follows. Location Approximate Square Feet Operation Expiration Cupertino, CA 30,149 sq. ft. Office, Laboratory and Manufacturing Lease expires 2024 (with an option to renew for an additional five years ) Cupertino, CA 20,100 sq. ft. Office and Laboratory Lease expires 2024 (with an option to renew for an additional five years ) Vacaville, CA 24,634 sq. ft. Manufacturing Lease expires 2028 (with an option to renew for an additional five years ) Under these leases, the Company is required to pay certain maintenance expenses in addition to monthly rent. Rent expense is recognized on a straight-line basis over the lease term for leases that have scheduled rental payment increases. The lease expense includes the amortization of the right-of-assets with the associated interest component estimated by applying the effective interest method. Rent expenses under all operating leases were $ 478,000 and $ 957,000 for both the three and six months ended June 30, 2023 and 2022, respectively. Future minimum payments under these noncancelable leases are as follows (in thousands): Operating Six months ended December 31, 2023 $ 990 2024 518 2025 250 2026 258 2027 and thereafter 493 $ 2,509 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8. Stockholders’ Equity In July 2021, the Company filed a shelf registration statement on Form S-3 with the SEC (the “2021 Registration Statement”) (File No. 333-258333), which upon being declared effective in August 2021, allows the Company to offer up to $ 250.0 million of securities from time to time in one or more public offerings, inclusive of up to $ 75.0 million of shares of the Company’s common stock which the Company may sell, subject to certain limitations, pursuant to a sales agreement dated July 30, 2021 with Cantor Fitzgerald & Co. (the “2021 Sales Agreement”). On December 5, 2022, the Company effected a 1-for-10 reverse stock split of its outstanding common stock . The reverse stock split also affected our outstanding stock options, purchase rights and equity incentive plans and resulted in the shares underlying such instruments being reduced and the exercise price being increased proportionately. Registered Direct Offering On February 3, 2023 , the Company entered into a securities purchase agreement with two institutional investors relating to the purchase and sale of an aggregate of (i) 1,700,000 shares of its common stock, par value $ 0.0001 per share, (ii) pre-funded warrants to purchase 300,000 shares of common stock, and (iii) accompanying common warrants, to purchase an aggregate of 2,000,000 shares of Common Stock in a registered direct offering (the "offering"). The issuance date of the common stock, the pre-funded warrants and the accompanying common warrants was February 8, 2023 . The aggregate gross proceeds to the Company from the offering were $ 10.0 million before deducting placement agent fees and other estimated offering expenses payable by the Company. The Company incurred offering costs of $ 1.2 million which were included in loss on issuance of warrants on the statement of operations for the three months ended March 31, 2023 and six months ended June 30, 2023. The aggregate net proceeds to the Company from the offering were approximately $ 8.8 million after deducting placement agent fees and other estimated offering expenses payable by us. The pre-funded warrants were exercisable immediately following the closing date of the offering and have an unlimited term and an initial exercise price of $ 0.00001 per share. The common warrants were immediately exercisable and have a five year term and an initial exercise price of $ 5.00 per share. The combined offering price was $ 5.00 per share and accompanying common warrant, or in the case of pre-funded warrants, $ 4.99999 per pre-funded warrant and accompanying common warrant. A holder (together with its affiliates) may not exercise any portion of a pre-funded warrant or common warrant to the extent that the holder would own more than 4.99 % (or, at the election of the holder 9.99 %) of DURECT’s outstanding common stock immediately after exercise. The Company accounts for the pre-funded warrants and the common warrants as current liabilities based upon the guidance of ASC 480 and ASC 815. The Company evaluated the common and pre-funded warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the pre-funded warrants could be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of the Company’s common stock. Because a change of 50% or more of the Company’s common stock may not result in a change in control of the Company, the Company believes that the scope exception related to the occurrence of a fundamental transaction in ASC 815-40 is not met. The common warrants have the same characteristics as the pre-funded warrants related to the occurrence of a fundamental transaction, therefore the common warrants are also precluded from equity classification. In addition, the holder of the common warrants is permitted to receive the highest volume weighted average price ("VWAP") from the date of announcement of the fundamental transaction through the date the holder provides notice of repurchase, as a way to protect the holder against reductions in the stock price in a fundamental transaction, while allowing the holder to keep the benefits of an upside, which precludes the common warrants from being considered indexed to the Company’s stock. Since the common and pre-funded warrants meet the definition of derivatives under ASC 815, the Company records these warrants as current liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the statement of operations and comprehensive loss at each reporting date. Estimating fair values of liability-classified financial instruments requires the development of estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of the Company’s common stock. Because liability-classified financial instruments are initially and subsequently carried at fair value, the Company’s financial results will reflect the volatility in these estimate and assumption changes. Changes in fair value are recognized as a component of other income (expense) in the statement of operations. At the date of issuance, the Company valued the common warrants using a Monte-Carlo valuation model with a fair value of $ 10.3 million and valued the pre-funded warrants using the Black-Scholes option valuation model with a fair value of $ 1.7 million. Since the fair value of the warrants at issuance was greater than the gross proceeds of $ 10.0 million received, the Company recorded approximately $ 2.0 million (i.e., the difference of the fair value of the warrants and the gross proceeds received) as a loss on issuance of warrants on the statement of operations at issuance. At June 30, 2023, the Company re-valued the common warrants using a Monte-Carlo valuation model with a fair value of $ 9.0 million, an increase of $ 766,000 from March 31, 2023; and re-valued the pre-funded warrants using the Black-Scholes option valuation model with a fair value of $ 1.5 million, an increase of $ 126,000 from June 30, 2023. The loss of $ 892,000 resulting from the change in the fair value of the liability for the warrants was recorded as a change in fair value of warrant liabilities in the accompanying statements of operations for the three months ended June 30, 2023. The gain of $ 1.6 million resulting from the change in the fair value of the liability for the warrants was recorded as a change in fair value of warrant liabilities in the accompanying statements of operations for the six months ended June 30, 2023. As of June 30, 2023, no ne of the warrants have been exercised. The common warrant liability and the pre-funded warrant liability will be adjusted to fair value at each balance sheet date until the warrants are settled. Changes in fair value of the warrant liabilities are recognized as a component of other income (expense), net in the statement of operations and comprehensive loss. The Company also allocated the offering expenses of $ 1.2 million to warrant liabilities and expensed (within other expense, net) $ 1.2 million upon the closing of the offering. ATM Financings During the three and six months ended June 30, 2023, the Company raised net proceeds (net of commissions) of approximately $ 658,000 from the sale of 118,132 shares of the Company’s common stock in the open market at a weighted average price of $ 5.68 per share pursuant to the 2021 Registration Statement and the 2021 Sales Agreement. As of August 7, 2023, the Company had up to $ 224.3 million of the Company’s securities available for sale under the 2021 Registration Statement, of which $ 74.3 million of the Company’s common stock are available pursuant to the 2021 Sales Agreement. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9. Subsequent Events In July 2023, the Company sold 2,991,027 shares of common stock and accompanying warrants to purchase up to 2,991,027 shares of common stock in a registered direct offering priced at-the-market under Nasdaq rules. The shares of common stock and accompanying warrants were sold at a combined purchase price of $ 5.015 per share and accompanying warrant. The warrants have an exercise price of $ 4.89 per share, are immediately exercisable and will expire five years from the date of issuance. The net proceeds from the offering t o the Company were approximately $ 13.8 million after deducting placement agent fees and other estimated offering expenses. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations DURECT Corporation (the “Company”) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company committed to transforming the treatment of acute organ injury and chronic liver diseases by advancing novel and potentially lifesaving therapies based on its endogenous epigenetic regulator program. Larsucosterol (also known as DUR-928), the Company's lead drug candidate, binds to and inhibits the activity of DNA methyltransferases (DNMTs), epigenetic enzymes which are elevated and associated with hypermethylation found in alcohol-associated hepatitis (AH) patients. Larsucosterol is in clinical development for the potential treatment of AH, for which FDA has granted a Fast Track Designation; non-alcoholic steatohepatitis (NASH) is also being explored. In addition, POSIMIR ® (bupivacaine solution) for infiltration use, a non-opioid analgesic utilizing the innovative SABER ® platform technology, is FDA-approved and has been exclusively licensed to Innocoll Pharmaceuticals for commercialization in the United States. The Company also manufactures and sells osmotic pumps used in laboratory research, and manufactures certain excipients for certain clients for use as raw materials in their products. |
Basis of Presentation | Basis of Presentation These condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). The unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at June 30, 2023, the operating results and comprehensive loss, and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022. The balance sheet as of December 31, 2022 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Reverse Stock Split On December 5, 2022, the Company effected a 1-for-10 reverse stock split of its outstanding common stock . The reverse stock split also affected our outstanding stock options, purchase rights and equity incentive plans and resulted in the shares underlying such instruments being reduced and the exercise price being increased proportionately. For all financial statement periods presented, references to number of shares, net loss per share, stock price and exercise price have been conformed to reflect the effects of the Company’s 1-for-10 reverse stock split , effective December 5, 2022, unless otherwise specified herein. |
Liquidity and Need to Raise Additional Capital | Liquidity and Need to Raise Additional Capital As of June 30, 2023, the Company had an accumulated deficit of $ 584.6 milli on as well as negative cash flows from operating activities. Presently, the Company does not have sufficient cash resources to meet its plans for the next twelve months following the issuance of these financial statements. The Company will continue to require substantial funds to continue research and development, including clinical trials of its product candidates. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management’s plans in order to meet its operating cash flow requirements include seeking additional collaborative agreements for certain of its programs as well as financing activities such as public offerings and private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected, and the Company may have to cease operations. As further described in Note 6, the Company classified the remaining balance of its term loan as a current liability on th e Company’s balance sheet as of June 30, 2023 and December 31, 2022 due to recurring losses, liquidity concerns and a subjective acceleration clause in the Company’s Loan Agreement. These financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company capitalizes inventories produced in preparation for product launches after receiving regulatory approval on a product. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to new information that suggests that the inventory will not be saleable. If the Company is able to subsequently sell products made with raw materials that were previously written down, the Company will report an unusually high gross profit as there will be no or little associated cost of goods for these materials. The Company’s inventories consisted of the following (in thousands): June 30, December 31, Raw materials $ 167 $ 168 Work in process 1,008 1,151 Finished goods 1,087 794 Total inventories $ 2,262 $ 2,113 |
Leases | Leases ASC 842 requires the Company to recognize an operating lease right-of-use asset and corresponding operating lease liability for the Company’s leased properties. The Company’s operating lease right-of-use assets and liabilities are recognized under ASC 842 based on the present value of lease payments over the remaining lease term at the lease commencement date. In determining the net present value of lease payments, we estimate the incremental borrowing rate based on the information available, including remaining lease term. As of June 30, 2023, the weighted-average remaining lease term was 3.07 years for the Company’s leased properties. |
Revenue Recognition | Revenue Recognition Product Revenue, Net The Company manufactures and sells ALZET osmotic pumps used in laboratory research, and manufactures and sells certain excipients used by pharmaceutical companies as raw materials in certain of their products, including POSIMIR, a marketed animal health product and Methydur. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Trade Discounts and Allowances: The Company provides certain customers with discounts that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns: The Company generally offers customers a limited right of return for products that have been purchased. The Company estimates the amount of its product sales that are probable of being returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities primarily using its historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development and Other Revenue The Company enters into license agreements, under which it licenses certain rights to its product candidates or products to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; reimbursement of development costs incurred by the Company under approved work plans; development, regulatory, intellectual property and commercial milestone payments; payments for manufacturing supply services the Company provides itself or through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments results in collaborative research and development revenues, except for revenues from royalties on net sales of licensed products and earn-out revenues, which are classified as other revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. For arrangements that are determined to include multiple performance obligations, the Company must develop assumptions that require judgment to determine the estimated stand-alone selling price for each performance obligation identified. These assumptions may include: forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company expects to recognize revenue for the variable consideration currently being constrained when it is probable that a significant revenue reversal will not occur. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from the transaction price allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For performance obligations comprised of licenses that are bundled with other promises, the Company utilizes its judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the Company applies an appropriate method of measuring progress for purposes of recognizing related revenues from the allocated transaction price. For performance obligations recognized over time, the Company evaluates the measure of progress each reporting period and recognizes revenues on a cumulative catch-up basis as collaborative research and development revenues. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Manufacturing Supply Services: Arrangements that include a promise for future supply of raw materials or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to the customer and if so, they are accounted for as separate performance obligations and allocated a portion of the transaction price based on the estimated standalone selling price of the material right. If the Company is entitled to additional payments when the customer exercises these options, the deferred transaction price and any additional payments are recorded in collaborative research and development revenue when the customer obtains control of the goods. Royalties and Earn-outs: For arrangements that include sales-based royalties or earn-outs, including milestone payments based on first commercial sale or the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized material royalty revenue resulting from the Company’s collaborative arrangements or material earn-out revenues from any of the Company’s agreements. Research and development services: Revenue from research and development services that are determined to represent a distinct performance obligation with the Company’s third-party collaborators is recognized over time as the related research and development services are performed using an appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and recognizes revenue on a cumulative catch-up basis, as collaborative research and development revenue. Research and development expenses under the collaborative research and development agreements generally approximate or exceed the revenue recognized under such agreements over the term of the respective agreements. Deferred revenue may result when the Company does not expend the required level of effort during a specific period in comparison to funds received under the respective agreement. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Total revenue by geographic region based on customers’ locations for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three months ended Six months ended 2023 2022 2023 2022 United States $ 1,143 $ 1,398 $ 2,421 2,605 Europe 613 414 1,044 $ 752 Japan 112 111 282 366 Other 213 153 388 268 Total $ 2,081 $ 2,076 $ 4,135 $ 3,991 Prepaid and Accrued Clinical Costs The Company incurs significant costs associated with third party consultants and organizations for pre-clinical studies, clinical trials, contract research, regulatory advice and other research and development-related services. The Company is required to estimate periodically the cost of services rendered but unbilled based on management’s estimates. Estimates are determined each reporting period by reviewing the terms and conditions of the underlying contracts, reviewing open purchase orders and by having detailed discussions with internal clinical personnel and third-party service providers as to the nature and status of the services performed in relation to amounts billed. The costs for unbilled services are estimated by applying the rates and fees applicable in the underlying contracts. If these good faith estimates are inaccurate, actual expenses incurred could materially differ from these estimates Prepaid and Accrued Manufacturing Costs The Company incurs significant costs associated with third party consultants and organizations for manufacturing, validation, testing and other research and development-related services. The Company is required to estimate periodically the cost of services rendered but unbilled based on management’s estimates. Estimates are determined each reporting period by reviewing the terms and conditions of the underlying contracts, reviewing open purchase orders and by having detailed discussions with internal personnel and third-party service providers as to the nature and status of the services performed in relation to amounts billed. The costs for unbilled services are estimated by applying the rates and fees applicable in the underlying contracts. If these good faith estimates are inaccurate, actual expenses incurred could materially differ from these estimates. |
Prepaid and Accrued Clinical Costs | Prepaid and Accrued Clinical Costs The Company incurs significant costs associated with third party consultants and organizations for pre-clinical studies, clinical trials, contract research, regulatory advice and other research and development-related services. The Company is required to estimate periodically the cost of services rendered but unbilled based on management’s estimates. Estimates are determined each reporting period by reviewing the terms and conditions of the underlying contracts, reviewing open purchase orders and by having detailed discussions with internal clinical personnel and third-party service providers as to the nature and status of the services performed in relation to amounts billed. The costs for unbilled services are estimated by applying the rates and fees applicable in the underlying contracts. If these good faith estimates are inaccurate, actual expenses incurred could materially differ from these estimates |
Prepaid and Accrued Manufacturing Costs | Prepaid and Accrued Manufacturing Costs |
Research and Development Expenses | Research and development expenses Research and development expenses are primarily comprised of salaries and benefits associated with research and development personnel, overhead and facility costs, preclinical and non-clinical development costs, clinical trial and related clinical manufacturing costs, contract services, and other outside costs. Research and development costs are expensed as incurred. Research and development costs paid to third parties under sponsored research agreements are recognized as the related services are performed. In addition, research and development expenses incurred that are reimbursed by the Company’s partners are recorded as collaborative research and development revenue. |
Comprehensive Loss | Comprehensive Loss Components of other comprehensive loss are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been disclosed in the Company’s Statements of Operations and Comprehensive Loss. Common Stock Warrants The Company reviews the terms of debt instruments, equity instruments, and other financing arrangements to determine whether there are embedded derivative features, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Additionally, in connection with the issuance of financing instruments, the Company may issue freestanding options and warrants. The Company accounts for its common stock warrants in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging (“ASC 815”). Based upon the provisions of ASC 480 and ASC 815, the Company accounts for common stock warrants and pre-funded warrants as current liabilities if the warrant fails the equity classification criteria. Common stock warrants and pre-funded warrants classified as liabilities are initially recorded at fair value on the grant date and remeasured at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the statements of operations. The Company values its pre-funded warrants and common stock warrants classified as liabilities using the Black-Scholes option pricing model or other acceptable valuation models, including the Monte-Carlo simulation model. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts): Three months ended Six months ended 2023 2022 2023 2022 Basic loss per share computation: Net loss $ ( 11,181 ) $ ( 11,551 ) $ ( 23,168 ) $ ( 22,393 ) Weighted average number of shares outstanding - basic 24,508 22,774 24,140 22,771 Net loss per share - basic $ ( 0.46 ) $ ( 0.51 ) $ ( 0.96 ) $ ( 0.98 ) Diluted loss per share computation: Net loss $ ( 11,181 ) $ ( 11,551 ) $ ( 23,168 ) $ ( 22,393 ) Change in fair value of warrant liabilities — — 258 — Net loss adjusted for change in fair value of warrant liabilities $ ( 11,181 ) $ ( 11,551 ) $ ( 23,426 ) $ ( 22,393 ) Weighted average shares used to compute basic net loss per share 24,508 22,774 24,140 22,771 Dilutive effect of pre-funded warrants — — 237 — Weighted average shares used to compute diluted net loss per share 24,508 22,774 24,377 22,771 Net loss per share - diluted $ ( 0.46 ) $ ( 0.51 ) $ ( 0.96 ) $ ( 0.98 ) Options to purchase approximately 3.1 million and 3.0 million shares of common stock were excluded from the denominator in the calculation of diluted net loss share for the three and six months ended June 30, 2023, respectively, as the effect would be anti-dilutive. Options to purchase approximately 2.79 million and 2.62 million shares of common stock were excluded from the denominator in the calculation of diluted net loss share for the three and six months ended June 30, 2022, respectively, as the effect would be anti-dilutive. In addition, the dilutive effect of pre-funded warrants was 237,000 shares for the six months ended June 30, 2023. Pre-funded warrants to purchase 300,000 shares were also outstanding during the three months ended June 30, 2023, but were not included in the computation of diluted net loss per share for the three months ended June 30, 2023 because the effect would be anti-dilutive. Additional common warrants to purchase 2.0 million and 1.6 million shares wer e also outstanding during the three and six months ended June 30, 2023, but were not included in the computation of diluted net loss per share because the effect would be anti-dilutive. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2020, FASB issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) — Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU- 2020-06"), which, among other things, provides guidance on how to account for contracts on an entity’s own equity. This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, the ASU eliminated the need for the Company to assess whether a contract on the entity’s own equity (1) permits settlement in unregistered shares, (2) whether counterparty rights rank higher stockholder’s rights, and (3) whether collateral is required. In addition, the ASU requires incremental disclosure related to contracts on the entity’s own equity and clarifies the treatment of certain financial instruments accounted for under this ASU on earnings per share. This ASU may be applied on a full retrospective of modified retrospective basis. For smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption of the ASU is permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted this standard on January 1, 2023 and the adoption did not have any effect on the financial statements as the Company did not have any such outstanding instruments as of January 1, 2023. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This standard is effective for fiscal years beginning after December 15, 2022 for small reporting companies, including interim reporting periods within those years and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted. The Company adopted the standard on January 1, 2023 and the adoption did not have a material effect on the financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Components of Inventories | The Company’s inventories consisted of the following (in thousands): June 30, December 31, Raw materials $ 167 $ 168 Work in process 1,008 1,151 Finished goods 1,087 794 Total inventories $ 2,262 $ 2,113 |
Summary of Significant Accounting Policies - Summary of Total Revenue by Geographic Region Based on Customers' Locations | Total revenue by geographic region based on customers’ locations for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three months ended Six months ended 2023 2022 2023 2022 United States $ 1,143 $ 1,398 $ 2,421 2,605 Europe 613 414 1,044 $ 752 Japan 112 111 282 366 Other 213 153 388 268 Total $ 2,081 $ 2,076 $ 4,135 $ 3,991 |
Summary of Numerators and Denominators in Calculation of Basic and Diluted Net (Loss) Income per Share | The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts): Three months ended Six months ended 2023 2022 2023 2022 Basic loss per share computation: Net loss $ ( 11,181 ) $ ( 11,551 ) $ ( 23,168 ) $ ( 22,393 ) Weighted average number of shares outstanding - basic 24,508 22,774 24,140 22,771 Net loss per share - basic $ ( 0.46 ) $ ( 0.51 ) $ ( 0.96 ) $ ( 0.98 ) Diluted loss per share computation: Net loss $ ( 11,181 ) $ ( 11,551 ) $ ( 23,168 ) $ ( 22,393 ) Change in fair value of warrant liabilities — — 258 — Net loss adjusted for change in fair value of warrant liabilities $ ( 11,181 ) $ ( 11,551 ) $ ( 23,426 ) $ ( 22,393 ) Weighted average shares used to compute basic net loss per share 24,508 22,774 24,140 22,771 Dilutive effect of pre-funded warrants — — 237 — Weighted average shares used to compute diluted net loss per share 24,508 22,774 24,377 22,771 Net loss per share - diluted $ ( 0.46 ) $ ( 0.51 ) $ ( 0.96 ) $ ( 0.98 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Money Market Funds and Available-for-Sale Securities | The following is a summary of available-for-sale securities as of June 30, 2023 and December 31, 2022 (in thousands): June 30, Amortized Unrealized Unrealized Estimated Money market funds $ 697 $ — $ — $ 697 Certificates of deposit 150 — — 150 Commercial paper 30,300 — ( 7 ) 30,293 U.S. Government agencies 1,489 1 — 1,490 $ 32,636 $ 1 $ ( 7 ) $ 32,630 Reported as: Cash and cash equivalents $ 29,500 $ 1 $ ( 6 ) $ 29,495 Short-term investments 2,986 — ( 1 ) 2,985 Short-term restricted investments 150 — — 150 $ 32,636 $ 1 $ ( 7 ) $ 32,630 December 31, Amortized Unrealized Unrealized Estimated Money market funds $ 633 $ — $ — $ 633 Certificates of deposit 150 — — 150 Commercial paper 40,478 — ( 13 ) 40,465 $ 41,261 $ — $ ( 13 ) $ 41,248 Reported as: Cash and cash equivalents $ 41,111 $ — $ ( 13 ) $ 41,098 Long-term restricted investments 150 — — 150 $ 41,261 $ — $ ( 13 ) $ 41,248 |
Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity | The following is a summary of the cost and estimated fair value of available-for-sale securities at June 30, 2023, by contractual maturity (in thousands): June 30, Amortized Estimated Mature in one year or less $ 31,939 $ 31,933 Mature after one year through five years — — $ 31,939 $ 31,933 |
Calculation of Estimated Fair Value of Warrants Using Models with Key Assumptions | The Company calculated the estimated fair value of the pre-funded warrants using a Black-Scholes option pricing model with the following key assumptions: 2/8/2023 (issuance) March 31, 2023 June 30, 2023 Common stock price $ 5.81 $ 4.53 $ 4.95 Exercise price per share $ 0.00001 $ 0.00001 $ 0.00001 Expected volatility 86.60 % 86.20 % 89.10 % Risk-free interest rate 3.82 % 3.65 % 4.22 % Contractual term (in years) 5.00 4.90 4.60 Expected dividend yield — % — % — % The Company calculated the fair value of the common warrants using a Monte Carlo simulation model with the following key assumptions. In all cases, the Company took the likelihood of achieving certain clinical events and related impact on the Company's common stock price into account. 2/8/2023 (issuance) March 31, 2023 June 30, 2023 Common stock price $ 5.81 $ 4.53 $ 4.95 Exercise price per share $ 5.00 $ 5.00 $ 5.00 Expected volatility 86.60 % 86.20 % 89.10 % Risk-free interest rate 3.82 % 3.65 % 4.22 % Contractual term (in years) 5.00 4.90 4.60 Expected dividend yield — % — % — % |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities as of June 30, 2023 and December 31, 2022 were comprised as follows (in thousands): June 30, December 31, Accrued compensation and benefits $ 2,430 $ 3,970 Accrued clinical costs 2,117 1,966 Accrued contract research and manufacturing costs 2,379 861 Others 853 1,099 Total $ 7,779 $ 7,896 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock-Based Compensation Cost that has been Included in Statements of Operations and Comprehensive Loss | The stock-based compensation cost that has been included in the statements of operations and comprehensive loss is shown as below (in thousands): Three months ended Six months ended 2023 2022 2023 2022 Cost of product revenues $ 5 $ 5 $ 9 $ 10 Research and development 301 296 593 626 Selling, general and administrative 353 317 659 660 Total stock-based compensation $ 659 $ 618 $ 1,261 $ 1,296 |
Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased | The Company used the following assumptions to estimate the fair value of stock options granted and shares purchased under its employee stock purchase plan for the three and six months ended June 30, 2023 and 2022: Three months ended Six months ended 2023 2022 2023 2022 Stock Options Risk-free rate 3.96 % 2.9 - 3.0 % 3.96 - 4.07 % 1.8 - 3.0 % Expected dividend yield — — — — Expected life of option (in years) 7.3 7.0 - 7.3 7.0 - 7.5 7.0 - 7.3 Volatility 88 % 85 - 86 % 87 - 88 % 83 - 86 % Three months ended Six months ended 2023 2022 2023 2022 Employee Stock Purchase Plan Risk-free rate 5.14 % 1.49 % 4.58 - 5.14 % 0.04 - 1.49 % Expected dividend yield — — — — Expected life of option (in years) 0.5 0.5 0.5 0.5 Volatility 88 % 80 % 88 - 104 % 56 - 80 % |
Term Loan (Tables)
Term Loan (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Future Maturities due under Term Loan | The fair value of the term loan approximates the carrying value. Future maturities due under the term loan as of June 30, 2023, are as follows (in thousands): Six months ended December 31, 2023 $ 4,286 2024 8,571 2025 8,429 Total minimum payments 21,286 Less unamortized debt discount and accrued final payment ( 565 ) Carrying value of term loan, net 20,721 |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Lease Arrangements of Company Facilities | The Company has lease arrangements for its facilities as follows. Location Approximate Square Feet Operation Expiration Cupertino, CA 30,149 sq. ft. Office, Laboratory and Manufacturing Lease expires 2024 (with an option to renew for an additional five years ) Cupertino, CA 20,100 sq. ft. Office and Laboratory Lease expires 2024 (with an option to renew for an additional five years ) Vacaville, CA 24,634 sq. ft. Manufacturing Lease expires 2028 (with an option to renew for an additional five years ) |
Schedule of Future Operating Lease Minimum Payments | Future minimum payments under these noncancelable leases are as follows (in thousands): Operating Six months ended December 31, 2023 $ 990 2024 518 2025 250 2026 258 2027 and thereafter 493 $ 2,509 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Dec. 05, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Feb. 03, 2023 | Dec. 31, 2022 | |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Accumulated deficit | $ 584,550 | $ 584,550 | $ 561,382 | ||||
Options to purchase common stock excluded from computation of diluted net loss per share | 3,100,000 | 2,790,000 | 3,000,000 | 2,620,000 | |||
Description of reverse stock split | 1-for-10 reverse stock split | 1-for-10 reverse stock split of its outstanding common stock | |||||
Dilutive effect of pre-funded warrants | 237,000 | ||||||
Weighted-average remaining lease term | 3 years 25 days | 3 years 25 days | |||||
Pre-Funded Warrants [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Options to purchase common stock excluded from computation of diluted net loss per share | 300,000 | ||||||
Number of warrants to purchase common stock | 300,000 | ||||||
Warrant [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Options to purchase common stock excluded from computation of diluted net loss per share | 2,000,000 | 1,600,000 | |||||
Number of warrants to purchase common stock | 2,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Components of Inventories (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Raw materials | $ 167 | $ 168 |
Work in process | 1,008 | 1,151 |
Finished goods | 1,087 | 794 |
Total inventories | $ 2,262 | $ 2,113 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Total Revenue by Geographic Region Based on Customers' Locations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 2,081 | $ 2,076 | $ 4,135 | $ 3,991 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 613 | 414 | 1,044 | 752 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 1,143 | 1,398 | 2,421 | 2,605 |
Japan [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 112 | 111 | 282 | 366 |
Other [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 213 | $ 153 | $ 388 | $ 268 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Numerators and Denominators in Calculation of Basic and Diluted Net (Loss) Income per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Basic loss per share computation: | ||||||
Net loss | $ (11,181) | $ (11,987) | $ (11,551) | $ (10,842) | $ (23,168) | $ (22,393) |
Weighted average number of shares outstanding - basic | 24,508,000 | 22,774,000 | 24,140,000 | 22,771,000 | ||
Net loss per share - basic | $ (0.46) | $ (0.51) | $ (0.96) | $ (0.98) | ||
Diluted loss per share computation: | ||||||
Net loss | $ (11,181) | $ (11,987) | $ (11,551) | $ (10,842) | $ (23,168) | $ (22,393) |
Change in fair value of warrant liabilities | 258 | |||||
Net loss adjusted for change in fair value of warrant liabilities | $ (11,181) | $ (11,551) | $ (23,426) | $ (22,393) | ||
Weighted average shares used to compute basic net loss per share | 24,508,000 | 22,774,000 | 24,140,000 | 22,771,000 | ||
Dilutive effect of pre-funded warrants | 237,000 | |||||
Weighted average shares used to compute diluted net loss per share | 24,508,000 | 22,774,000 | 24,377,000 | 22,771,000 | ||
Net loss per share - diluted | $ (0.46) | $ (0.51) | $ (0.96) | $ (0.98) |
Strategic Agreements - Addition
Strategic Agreements - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Sep. 30, 2022 | Aug. 31, 2022 | Sep. 30, 2017 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Total revenues | $ 2,081,000 | $ 2,076,000 | $ 4,135,000 | $ 3,991,000 | |||||
Reduction in net equipment | $ 100,000 | ||||||||
Non Refundable Upfront Payment Received | $ 17,500,000 | ||||||||
Agreement With Innocoll | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Total revenues | $ 10,000,000 | ||||||||
Performance Milestone Payments Based On Successful Development | 1,300,000 | 1,300,000 | |||||||
Additional Milestone Payment | 122,000,000 | 122,000,000 | |||||||
Upfront Fee | 4,000,000 | ||||||||
Agreement With Innocoll | Patent Based Milestone | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Milestone Payment | $ 8,000,000 | ||||||||
Agreement With Innocoll | Sales Based Milestones | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Milestone Payment | $ 2,000,000 | ||||||||
Agreement With Innocoll | Accounts Receivable | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Receivables from Customers | 5,300,000 | ||||||||
Agreement With Innocoll | Reimbursed Expenses And Certain Materials Transferred | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Upfront Fee | $ 1,200,000 | ||||||||
Collaborative Research and Development and Other Revenue [Member] | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Total revenues | $ 508,000 | $ 606,000 | 1,151,000 | $ 1,101,000 | |||||
License | Agreement With Innocoll | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Total revenues | $ 4,000,000 |
Financial Instruments - Summary
Financial Instruments - Summary of Money Market Funds and Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 32,636 | $ 41,261 |
Unrealized Gain | 1 | |
Unrealized Loss | (7) | (13) |
Estimated Fair Value | 32,630 | 41,248 |
Money market funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 697 | 633 |
Estimated Fair Value | 697 | 633 |
Certificates of deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 150 | 150 |
Estimated Fair Value | 150 | 150 |
Commercial paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 30,300 | 40,478 |
Unrealized Loss | (7) | (13) |
Estimated Fair Value | 30,293 | 40,465 |
U.S. Government agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,489 | |
Unrealized Gain | 1 | |
Estimated Fair Value | 1,490 | |
Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 29,500 | 41,111 |
Unrealized Gain | 1 | |
Unrealized Loss | (6) | (13) |
Estimated Fair Value | 29,495 | 41,098 |
Short-term investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,986 | |
Unrealized Loss | (1) | |
Estimated Fair Value | 2,985 | |
Long Term Restricted Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 150 | 150 |
Estimated Fair Value | $ 150 | $ 150 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Detail) $ in Thousands | Jun. 30, 2023 USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Mature in one year or less, Amortized Cost | $ 31,939 |
Mature after one year through five years, Amortized Cost | 0 |
Amortized Cost | 31,939 |
Mature in one year or less, Estimated Fair Value | 31,933 |
Mature after one year through five years, Estimated Fair Value | 0 |
Estimated Fair Value | $ 31,933 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 | Feb. 08, 2023 | Feb. 03, 2023 |
Marketable Securities [Line Items] | ||||
Unrealized loss of securities | $ 0 | |||
Pre-funded warrants liabilities | $ 1,700,000 | |||
Common warrants liabilities | 10,448,000 | |||
Monte-Carlo [Member] | ||||
Marketable Securities [Line Items] | ||||
Common warrants liabilities | 10,300,000 | |||
Re-valued common warrants | 9,000,000 | $ 8,200,000 | ||
Black-Scholes [Member] | ||||
Marketable Securities [Line Items] | ||||
Pre-funded warrants liabilities | $ 1,700,000 | |||
Re -valuated pre -funded warrants | $ 1,500,000 | $ 1,400,000 | ||
Warrant [Member] | ||||
Marketable Securities [Line Items] | ||||
Number of warrants to purchase common stock | 2,000,000 | |||
Pre-Funded Warrants [Member] | ||||
Marketable Securities [Line Items] | ||||
Number of warrants to purchase common stock | 300,000 |
Financial Instruments - Calcula
Financial Instruments - Calculation of Estimated Fair Value of Warrants Using Models with Key Assumptions (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Feb. 08, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Feb. 03, 2023 | |
Pre-Funded Warrants [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Common stock price | $ 4.99999 | |||
Pre-Funded Warrants [Member] | Black-Scholes [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Common stock price | $ 5.81 | $ 4.53 | $ 4.95 | |
Pre-Funded Warrants [Member] | Black-Scholes [Member] | Exercise Price [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Exercise price per share | $ 0.00001 | $ 0.00001 | $ 0.00001 | |
Pre-Funded Warrants [Member] | Black-Scholes [Member] | Expected Volatility [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected volatility | 86.60% | 86.20% | 89.10% | |
Pre-Funded Warrants [Member] | Black-Scholes [Member] | Risk Free Interest Rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Risk-free interest rate | 3.82% | 3.65% | 4.22% | |
Pre-Funded Warrants [Member] | Black-Scholes [Member] | Contractual Term [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contractual term (in years) | 5 years | 4 years 10 months 24 days | 4 years 7 months 6 days | |
Warrant [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Common stock price | $ 5 | |||
Warrant [Member] | Monte-Carlo [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Common stock price | $ 5.81 | $ 4.53 | $ 4.95 | |
Warrant [Member] | Monte-Carlo [Member] | Exercise Price [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Exercise price per share | $ 5 | $ 5 | $ 5 | |
Warrant [Member] | Monte-Carlo [Member] | Expected Volatility [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected volatility | 86.60% | 86.20% | 89.10% | |
Warrant [Member] | Monte-Carlo [Member] | Risk Free Interest Rate [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Risk-free interest rate | 3.82% | 3.65% | 4.22% | |
Warrant [Member] | Monte-Carlo [Member] | Contractual Term [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contractual term (in years) | 5 years | 4 years 10 months 24 days | 4 years 7 months 6 days |
Accrued Liabilities (Details) -
Accrued Liabilities (Details) - Schedule of accrued liabilities - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule Of Accrued Liabilities [Abstract] | ||
Accrued compensation and benefits | $ 2,430 | $ 3,970 |
Accrued clinical costs | 2,117 | 1,966 |
Accrued contract research and manufacturing costs | 2,379 | 861 |
Others | 853 | 1,099 |
Total | $ 7,779 | $ 7,896 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Cost that has been Included in Statements of Operations and Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 659 | $ 618 | $ 1,261 | $ 1,296 |
Cost of product revenues [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 5 | 5 | 9 | 10 |
Research and development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 301 | 296 | 593 | 626 |
Selling, general and administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 353 | $ 317 | $ 659 | $ 660 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Stock-based compensation cost capitalized in inventory | $ 15,000 | $ 16,000 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employees Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free rate | 5.14% | 1.49% | ||
Risk-free rate, minimum | 4.58% | 0.04% | ||
Risk-free rate, maximum | 5.14% | 1.49% | ||
Expected dividend yield | 0% | 0% | 0% | 0% |
Expected life of option (in years) | 6 months | 6 months | 6 months | 6 months |
Volatility | 88% | 80% | ||
Volatility, minimum | 88% | 56% | ||
Volatility, maximum | 104% | 80% | ||
Stock Option Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free rate | 3.96% | |||
Risk-free rate, minimum | 2.90% | 3.96% | 1.80% | |
Risk-free rate, maximum | 3% | 4.07% | 3% | |
Expected dividend yield | 0% | 0% | 0% | 0% |
Expected life of option (in years) | 7 years 3 months 18 days | |||
Volatility | 88% | |||
Volatility, minimum | 85% | 87% | 83% | |
Volatility, maximum | 86% | 88% | 86% | |
Stock Option Plan [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life of option (in years) | 7 years | 7 years | 7 years | |
Stock Option Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life of option (in years) | 7 years 3 months 18 days | 7 years 6 months | 7 years 3 months 18 days |
Term Loan - Additional Informat
Term Loan - Additional Information (Detail) - USD ($) | 1 Months Ended | |||||
May 31, 2021 | Dec. 31, 2019 | Nov. 30, 2018 | Feb. 28, 2018 | Jul. 31, 2016 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | ||||||
Loan modification fee | $ 712,500 | $ 825,000 | ||||
Oxford Finance LLC Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Secured term loan | $ 20,000,000 | |||||
Term loan repayment description | As amended, the Loan Agreement provides for interest only payments through June 1, 2023, followed by consecutive monthly payments of principal and interest in arrears starting on June 1, 2023 and continuing through the maturity date of the term loan of September 1, 2025 | |||||
First principal payment date | Jun. 01, 2023 | |||||
Term loan, maturity date | Sep. 01, 2025 | |||||
Interest rate on term loan | 7.95% | 12.55% | ||||
Term loan, floating interest rate basis | an index rate plus a spread | |||||
Facility fee paid at final payment | $ 150,000 | |||||
Percentage of an additional payment equal to principal amount | 10% | |||||
Debt offering/issuance costs | $ 2,000,000 | |||||
Loan modification fee | $ 900,000 | $ 100,000 | ||||
Oxford Finance LLC Term Loan [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of prepayment fee | 0.75% | |||||
Oxford Finance LLC Term Loan [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of prepayment fee | 2.50% |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Maturities due under Term Loan (Detail) $ in Thousands | Jun. 30, 2023 USD ($) |
Future maturities and interest payments under the term loan: | |
Six months ended December 31, 2023 | $ 4,286 |
2024 | 8,571 |
2025 | 8,429 |
Total minimum payments | 21,286 |
Less unamortized debt discount and accrued final payment | (565) |
Carrying value of term loan, net | $ 20,721 |
Commitments - Summary of Lease
Commitments - Summary of Lease Arrangements of Company Facilities (Detail) | 6 Months Ended |
Jun. 30, 2023 ft² | |
Vacaville, CA [Member] | Manufacturing [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 24,634 |
Lease Expiration Term | Lease expires 2028 (with an option to renew for an additional five years) |
Lease expiration year | 2028 |
Lease renewal term | 5 years |
Cupertino, CA [Member] | Office, Laboratory and Manufacturing [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Lease expiration year | 2024 |
Lease renewal term | 5 years |
Cupertino, CA [Member] | Office, Laboratory and Manufacturing [Member] | Lease Amendment [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 30,149 |
Lease Expiration Term | Lease expires 2024 (with an option to renew for an additional five years) |
Cupertino, CA [Member] | Office and Laboratory [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Lease expiration year | 2024 |
Lease renewal term | 5 years |
Cupertino, CA [Member] | Office and Laboratory [Member] | Lease Amendment [Member] | |
Property Subject To Or Available For Operating Lease [Line Items] | |
Approximate Square Feet | 20,100 |
Lease Expiration Term | Lease expires 2024 (with an option to renew for an additional five years) |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expenses of operating leases | $ 478,000 | $ 478,000 | $ 957,000 | $ 957,000 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Operating Lease Minimum Payments (Detail) $ in Thousands | Jun. 30, 2023 USD ($) |
Leases [Abstract] | |
Six months ended December 31, 2023 | $ 990 |
2024 | 518 |
2025 | 250 |
2026 | 258 |
2027 and thereafter | 493 |
Total operating leases future minimum payments | $ 2,509 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Feb. 08, 2023 | Feb. 03, 2023 | Dec. 05, 2022 | Jul. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Aug. 07, 2023 | Jul. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Description of reverse stock split | 1-for-10 reverse stock split | 1-for-10 reverse stock split of its outstanding common stock | |||||||
Description of Transaction | On February 3, 2023, the Company entered into a securities purchase agreement with two institutional investors | ||||||||
Date of agreement | Feb. 08, 2023 | Feb. 03, 2023 | |||||||
Issuance cost for warrants | $ (1,200,000) | $ (1,200,000) | |||||||
Gross proceeds from purchase agreement | $ 10,000,000 | ||||||||
Gross proceeds from sale of common stock | $ 8,800,000 | ||||||||
Warrants exercise price | $ 0 | $ 0 | |||||||
Common warrants liabilities | $ 10,448,000 | $ 10,448,000 | |||||||
Pre-funded warrants liabilities | $ 1,700,000 | ||||||||
Proceeds from Issuance of Warrants | 10,000,000 | ||||||||
Loss on issuance of common warrants | (2,000,000) | ||||||||
Loss (gain) on change in fair value of warrant liability | 892,000 | (1,585,000) | |||||||
Proceeds from sale of common stock, net of commissions | 658,000 | ||||||||
Subsequent Event [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock price per share | $ 5.015 | ||||||||
Gross proceeds from sale of common stock | $ 13,800,000 | ||||||||
Warrants exercisable term | 5 years | ||||||||
Direct Offering Placement [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Offering expenses | 1,200,000 | ||||||||
Monte-Carlo [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common warrants liabilities | 10,300,000 | ||||||||
Re-valued common warrants | 9,000,000 | 8,200,000 | 9,000,000 | ||||||
Increase in common warrants | 766,000 | ||||||||
Black-Scholes [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Pre-funded warrants liabilities | $ 1,700,000 | ||||||||
Re -valuated pre -funded warrants | 1,500,000 | $ 1,400,000 | $ 1,500,000 | ||||||
Increase in pre-funded warrants | $ 126,000 | ||||||||
Common Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock number of shares issued in transaction | 1,700,000 | ||||||||
Sale of stock price per share | $ 0.0001 | ||||||||
Sale of common stock during period | 118,000 | 1,700,000 | |||||||
Common Stock [Member] | Subsequent Event [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock number of shares issued in transaction | 2,991,027 | ||||||||
Pre-Funded Warrants [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock price per share | $ 4.99999 | ||||||||
Number of warrants to purchase common stock | 300,000 | ||||||||
Warrants exercise price | $ 0.00001 | ||||||||
Pre-Funded Warrants [Member] | Black-Scholes [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock price per share | $ 5.81 | $ 4.95 | $ 4.53 | $ 4.95 | |||||
Warrant [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock price per share | $ 5 | ||||||||
Number of warrants to purchase common stock | 2,000,000 | ||||||||
Warrants exercise price | $ 5 | ||||||||
Warrants exercisable term | 5 years | ||||||||
Offering expenses | $ 1,200,000 | ||||||||
Warrant [Member] | Subsequent Event [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of warrants to purchase common stock | 2,991,027 | ||||||||
Warrants exercise price | $ 4.89 | ||||||||
Warrant [Member] | Monte-Carlo [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Sale of stock price per share | $ 5.81 | $ 4.95 | $ 4.53 | $ 4.95 | |||||
Pre Funded Warrant And Common Warrant [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of ownership on outstanding common stock immediately after exercise | 4.99% | ||||||||
Percentage of ownership on outstanding common stock at election of holder | 9.99% | ||||||||
Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Securities offered | $ 250,000,000 | ||||||||
2021 Registration Statement [Member] | Maximum [Member] | Subsequent Event [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Available-for-sale Securities | $ 224,300,000 | ||||||||
2021 Sales Agreement [Member] | IPO [Member] | Subsequent Event [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Available-for-sale Securities | $ 74,300,000 | ||||||||
2021 Sales Agreement [Member] | Cantor Fitzgerald Co [Member] | Minimum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Securities offered | $ 75,000,000 | ||||||||
2021 Registration Statement and 2021 Sales Agreement [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Proceeds from sale of common stock, net of commissions | $ 658,000 | $ 658,000 | |||||||
Sale of common stock during period | 118,132 | 118,132 | |||||||
Common stock weighted average price | $ 5.68 | $ 5.68 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | ||
Feb. 03, 2023 | Jul. 31, 2023 | Jun. 30, 2023 | |
Subsequent Event [Line Items] | |||
Warrants exercise price | $ 0 | ||
Net proceeds from offering | $ 8.8 | ||
Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Sale of stock number of shares issued in transaction | 1,700,000 | ||
Sale of stock price per share | $ 0.0001 | ||
Warrant [Member] | |||
Subsequent Event [Line Items] | |||
Number of warrants to purchase common stock | 2,000,000 | ||
Sale of stock price per share | $ 5 | ||
Warrants exercise price | $ 5 | ||
Warrants exercisable term | 5 years | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Sale of stock price per share | $ 5.015 | ||
Warrants exercisable term | 5 years | ||
Net proceeds from offering | $ 13.8 | ||
Subsequent Event [Member] | Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Sale of stock number of shares issued in transaction | 2,991,027 | ||
Subsequent Event [Member] | Warrant [Member] | |||
Subsequent Event [Line Items] | |||
Number of warrants to purchase common stock | 2,991,027 | ||
Warrants exercise price | $ 4.89 |