Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 28, 2014 | Jun. 30, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'TRGT | ' | ' |
Entity Registrant Name | 'TARGACEPT INC | ' | ' |
Entity Central Index Key | '0001124105 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 33,743,856 | ' |
Entity Public Float | ' | ' | $97,526,569 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $54,485 | $82,240 |
Investments in marketable securities-short term | 37,844 | 42,721 |
Current receivables | 278 | 1,380 |
Prepaid expenses | 999 | 1,402 |
Total current assets | 93,606 | 127,743 |
Investments in marketable securities-long term | 51,448 | 59,966 |
Property and equipment, net | 682 | 1,639 |
Intangible assets | 97 | 115 |
Other assets | 40 | 116 |
Total assets | 145,873 | 189,579 |
Current liabilities: | ' | ' |
Accounts payable | 1,296 | 2,056 |
Accrued expenses | 8,830 | 6,085 |
Current portion of long-term debt | 853 | 851 |
Current portion of deferred revenue | ' | 2,357 |
Total current liabilities | 10,979 | 11,349 |
Long-term debt, net of current portion | 283 | 1,136 |
Deferred revenue, net of current portion | ' | 1,179 |
Total liabilities | 11,262 | 13,664 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value, 100,000,000 shares authorized; 33,718,179 and 33,615,081 shares issued and outstanding at December 31, 2013 and December 31 2012, respectively | 34 | 34 |
Preferred stock, $0.001 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2013 and 2012 | ' | ' |
Capital in excess of par value | 415,123 | 409,608 |
Accumulated other comprehensive income | 87 | 201 |
Accumulated deficit | -280,633 | -233,928 |
Total stockholders' equity | 134,611 | 175,915 |
Total liabilities and stockholders' equity | $145,873 | $189,579 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,718,179 | 33,615,081 |
Common stock, shares outstanding | 33,718,179 | 33,615,081 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Statements_of_Comprehensive_In
Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating revenues: | ' | ' | ' |
License fees and milestones from collaborations | $3,536 | $57,420 | $96,979 |
Grant revenue | 93 | 440 | 658 |
Net operating revenues | 3,629 | 57,860 | 97,637 |
Operating expenses: | ' | ' | ' |
Research and development (including stock-based compensation of $2,497, $3,792 and $4,885 in 2013, 2012 and 2011, respectively) | 38,840 | 49,087 | 95,215 |
General and administrative (including stock-based compensation of $2,719, $3,956 and $3,628 in 2013, 2012 and 2011, respectively) | 12,005 | 13,193 | 12,167 |
Reductions in force (including stock-based compensation of $98 in 2012) | ' | 3,718 | ' |
Total operating expenses | 50,845 | 65,998 | 107,382 |
Loss from operations | -47,216 | -8,138 | -9,745 |
Other income (expense): | ' | ' | ' |
Interest income | 784 | 1,070 | 1,348 |
(Loss) gain on sale of property and equipment | -213 | 55 | ' |
Interest expense | -53 | -86 | -132 |
Total other income (expense) | 518 | 1,039 | 1,216 |
Loss before income taxes | -46,698 | -7,099 | -8,529 |
Income tax (expense) benefit | -7 | 101 | 0 |
Net loss | -46,705 | -6,998 | -8,529 |
Basic and diluted net loss per share | ($1.39) | ($0.21) | ($0.27) |
Weighted average common shares outstanding-basic and diluted | 33,640,323 | 33,476,316 | 31,637,283 |
Net loss | -46,705 | -6,998 | -8,529 |
Unrealized (loss) gain on available-for-sale securities, net | -114 | 165 | -189 |
Comprehensive loss | ($46,819) | ($6,833) | ($8,718) |
Statements_of_Comprehensive_In1
Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Research and Development Expense | ' | ' | ' |
Stock-based compensation | $2,497 | $3,792 | $4,885 |
General and Administrative Expense | ' | ' | ' |
Stock-based compensation | 2,719 | 3,956 | 3,628 |
Reduction in force | ' | ' | ' |
Stock-based compensation | ' | $98 | ' |
Statements_of_Stockholders_Equ
Statements of Stockholders' Equity (USD $) | Total | Common Stock | Capital in Excess of Par Value | Other Comprehensive Income | Accumulated Deficit |
In Thousands, except Share data | |||||
Beginning balance at Dec. 31, 2010 | $91,847 | $29 | $309,994 | $225 | ($218,401) |
Beginning balance (in shares) at Dec. 31, 2010 | ' | 28,870,691 | ' | ' | ' |
Issuance of common stock related to exercise of stock options (in shares) | ' | 305,395 | ' | ' | ' |
Issuance of common stock related to exercise of stock options | 1,802 | ' | 1,802 | ' | ' |
Stock-based compensation | 8,513 | ' | 8,513 | ' | ' |
Net proceeds from public stock offering (in shares) | ' | 4,207,317 | ' | ' | ' |
Net proceeds from public stock offering | 80,844 | 4 | 80,840 | ' | ' |
Net change in unrealized holding gain on available-for-sale marketable securities | -189 | ' | ' | -189 | ' |
Net loss | -8,529 | ' | ' | ' | -8,529 |
Comprehensive loss | -8,718 | ' | ' | ' | ' |
Ending balance at Dec. 31, 2011 | 174,288 | 33 | 401,149 | 36 | -226,930 |
Ending balance (in shares) at Dec. 31, 2011 | ' | 33,383,403 | ' | ' | ' |
Issuance of common stock related to exercise of stock options (in shares) | ' | 231,678 | ' | ' | ' |
Issuance of common stock related to exercise of stock options | 614 | 1 | 613 | ' | ' |
Stock-based compensation | 7,846 | ' | 7,846 | ' | ' |
Net change in unrealized holding gain on available-for-sale marketable securities | 165 | ' | ' | 165 | ' |
Net loss | -6,998 | ' | ' | ' | -6,998 |
Comprehensive loss | -6,833 | ' | ' | ' | ' |
Ending balance at Dec. 31, 2012 | 175,915 | 34 | 409,608 | 201 | -233,928 |
Ending balance (in shares) at Dec. 31, 2012 | ' | 33,615,081 | ' | ' | ' |
Issuance of common stock related to exercise of stock options (in shares) | 103,098 | 103,098 | ' | ' | ' |
Issuance of common stock related to exercise of stock options | 299 | ' | 299 | ' | ' |
Stock-based compensation | 5,216 | ' | 5,216 | ' | ' |
Net change in unrealized holding gain on available-for-sale marketable securities | -114 | ' | ' | -114 | ' |
Net loss | -46,705 | ' | ' | ' | -46,705 |
Comprehensive loss | -46,819 | ' | ' | ' | ' |
Ending balance at Dec. 31, 2013 | $134,611 | $34 | $415,123 | $87 | ($280,633) |
Ending balance (in shares) at Dec. 31, 2013 | ' | 33,718,179 | ' | ' | ' |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating activities | ' | ' | ' |
Net loss | ($46,705) | ($6,998) | ($8,529) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' | ' |
Recognition of deferred revenue | -3,536 | -57,860 | -97,439 |
Amortization of premium on marketable securities, net | 908 | 937 | 911 |
Depreciation and amortization | 547 | 2,212 | 2,480 |
Stock-based compensation expense | 5,216 | 7,846 | 8,513 |
Loss (gain) on disposal of property and equipment | 213 | -55 | ' |
Income tax expense (benefit) from other comprehensive income | 7 | -101 | ' |
Changes in operating assets and liabilities: | ' | ' | ' |
Current receivable | 226 | -1,162 | 620 |
Other assets | 527 | 2,017 | -443 |
Accounts payable, license fees payable and accrued expenses | 1,985 | -11,515 | 4,419 |
Deferred license fee revenue | ' | 440 | 5,750 |
Net cash used in operating activities | -40,612 | -64,239 | -83,718 |
Investing activities | ' | ' | ' |
Purchase of investments in marketable securities | -57,551 | -120,972 | -156,253 |
Proceeds from sale of investments in marketable securities | 69,882 | 159,538 | 100,012 |
Purchase of property and equipment | -92 | -333 | -1,431 |
Proceeds from sale of property and equipment | 1,170 | 1,589 | 5 |
Net cash provided by (used in) investing activities | 13,409 | 39,822 | -57,667 |
Financing activities | ' | ' | ' |
Proceeds from issuance of long-term debt | ' | ' | 2,132 |
Principal payments on long-term debt | -851 | -1,240 | -1,964 |
Proceeds from issuance of common stock, net | 299 | 614 | 82,646 |
Net cash (used in) provided by financing activities | -552 | -626 | 82,814 |
Net decrease in cash and cash equivalents | -27,755 | -25,043 | -58,571 |
Cash and cash equivalents at beginning of year | 82,240 | 107,283 | 165,854 |
Cash and cash equivalents at end of year | $54,485 | $82,240 | $107,283 |
The_Company_and_Nature_of_Oper
The Company and Nature of Operations | 12 Months Ended |
Dec. 31, 2013 | |
The Company and Nature of Operations | ' |
1. The Company and Nature of Operations | |
Targacept, Inc., or the Company, is a Delaware corporation formed on March 7, 1997. The Company is a biopharmaceutical company engaged in the development of novel NNR Therapeutics™ to treat patients suffering from serious nervous system and gastrointestinal/genitourinary diseases and disorders. The Company’s NNR Therapeutics selectively target neuronal nicotinic receptors, which it refers to as NNRs. Its facilities are located in Winston-Salem, North Carolina. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||
2. Summary of Significant Accounting Policies | |||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
The Company considers cash equivalents to be those investments which are highly liquid, readily convertible to cash and mature within three months from the date of purchase. | |||||||||||||
Investments in Marketable Securities | |||||||||||||
Consistent with its investment policy, the Company invests its cash allocated to fund its short-term liquidity requirements with prominent financial institutions in bank depository accounts and institutional money market funds and the Company invests the remainder of its cash in corporate debt securities and municipal bonds rated at least A quality or equivalent, U.S. Treasury notes and bonds, U.S. and state government agency-backed securities and certificates of deposit. | |||||||||||||
The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates its classification as of each balance sheet date. All marketable securities owned during 2013 and 2012 were classified as available-for-sale. The cost of securities sold is based on the specific identification method. Investments in marketable securities are recorded as of each balance sheet date at fair value, with unrealized gains and, to the extent deemed temporary, unrealized losses included in stockholders’ equity. Interest and dividend income on investments in marketable securities, accretion of discounts and amortization of premiums and realized gains and losses are included in interest income in the statement of comprehensive income (loss). | |||||||||||||
An investment in marketable securities is considered to be impaired when a decline in fair value below its cost basis is determined to be other than temporary. The Company evaluates whether a decline in fair value of an investment in marketable securities below its cost basis is other than temporary using available evidence. In the event that the cost basis of the investment exceeds its fair value, the Company evaluates, among other factors, the amount and duration of the period that the fair value is less than the cost basis, the financial health of and business outlook for the issuer, including industry and sector performance and operational and financing cash flow factors, overall market conditions and trends, the Company’s intent to sell the investment and whether it is more likely than not the Company would be required to sell the investment before its anticipated recovery. If a decline in fair value is determined to be other than temporary, the Company records an impairment charge in the statement of comprehensive income (loss) and establishes a new cost basis in the investment. | |||||||||||||
Receivables | |||||||||||||
The Company’s current receivables at December 31, 2013 and 2012 are related to the Company’s collaboration agreement with AstraZeneca AB and the sale of equipment as a result of the Company closing its laboratory operations. During 2013, 2012, and 2011, the Company recognized revenue of $3,536,000, $57,420,000, and $96,979,000, respectively, or 97%, 99% and 99% of net operating revenues, respectively, from the collaboration and alliance agreements discussed in Note 12. During 2013 and 2012, the Company sold equipment with a book value of $519,000 and $1,534,000, respectively, of which $183,000 and $1,046,000 was receivable at December 31, 2013 and 2012, respectively. | |||||||||||||
Long-lived Assets | |||||||||||||
Property and equipment consists primarily of laboratory equipment, office furniture and fixtures and, prior to December 31, 2013, leasehold improvements and is recorded at historical cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Equipment is typically depreciated over 3 to 5 years, office furniture and fixtures are typically depreciated over 7 years, and leasehold improvements are typically amortized over the lesser of the asset life or the lease term. | |||||||||||||
The Company capitalizes the costs of intellectual property acquired or licensed from external sources as intangible assets if, at the time of acquisition, the intellectual property has reached technological feasibility. Intellectual property acquired or licensed from external sources that has not reached technological feasibility at the time of acquisition or that has no expected future use is charged to research and development expense as incurred. The Company records all other charges related to the filing, prosecution and maintenance of patents to expense as incurred. | |||||||||||||
The Company assesses the net realizable value of its long-lived assets and evaluates these assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment charge would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. An impairment charge, if recognized, would be based on the excess of the carrying value of the impaired asset over its estimated fair value. | |||||||||||||
Research and Development Expense | |||||||||||||
Research and development costs are expensed as incurred and include direct costs incurred to third parties related to research or development of the Company’s product candidates, salaries of, and stock-based compensation for, personnel involved in research and development activities, contractor fees, administrative expenses and allocations of research and development-related overhead costs. Administrative expenses and research and development-related overhead costs included in research and development expense consist of allocations of facility and equipment lease charges, depreciation and amortization of assets, and insurance, legal and supply costs that are directly related to research and development activities. The Company directly reduces research and development expenses for amounts reimbursed pursuant to the cost-sharing agreements described in Note 12. | |||||||||||||
Accrued Expenses | |||||||||||||
The Company records accruals based on estimates of the services received, efforts expended and amounts owed pursuant to contracts with clinical trial sites, contract research organizations and other service providers. In the normal course of business, the Company contracts with third parties to perform various clinical trial and other research and development activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under these agreements depend on the performance of services or the achievement of specified events, such as the production of drug substance or clinical trial materials, the recruitment of clinical trial subjects, the completion of portions of a non-clinical study or clinical trial or similar conditions. The objective of the Company’s accrual policy is to match the recording of expenses in its financial statements to the actual services received and efforts expended. As such, expense accruals are recognized based on the Company’s estimate of the degree of completion of the event or events specified in a particular contract as giving rise to a payment. | |||||||||||||
Credit Risk | |||||||||||||
Financial instruments that potentially subject the Company to credit risk consist principally of cash, investments in marketable securities and receivables from collaborations. The Company has established guidelines for investment of its cash that are designed to emphasize safety, liquidity and preservation of capital. The Company places its cash and cash equivalents with prominent financial institutions. At December 31, 2013 and 2012, the Company had deposits in excess of federally insured limits of $57,485,000 and $87,081,000, respectively. | |||||||||||||
Revenue Recognition | |||||||||||||
The Company uses the revenue recognition guidance established by Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition, or ASC 605. In determining the accounting for collaboration and alliance agreements, the Company follows the provisions of ASC 605, Subtopic 25, Multiple Element Arrangements, or ASC 605-25. ASC 605-25 provides guidance on whether an arrangement that involves multiple revenue-generating activities or deliverables should be divided into separate units of accounting for revenue recognition purposes and, if division is required, how the arrangement consideration should be allocated among the separate units of accounting. If the arrangement constitutes separate units of accounting according to the separation criteria of ASC 605-25, the consideration received is allocated among the separate units of accounting and the applicable revenue recognition criteria must be applied to each unit. If the arrangement constitutes a single unit of accounting, the revenue recognition policy must be determined for the entire arrangement and the consideration received is recognized over the period of inception through the date on which the last deliverable within the single unit of accounting is expected to be delivered. Revisions to the estimated period of recognition are reflected in revenue prospectively. | |||||||||||||
Collaboration research and development revenue is earned and recognized as research or development is performed and related expenses are incurred. Non-refundable upfront fees, which may include, for example, an initial payment upon effectiveness of the contractual relationship, payment representing a common stock purchase premium or payment to secure a right for a future license, are recorded as deferred revenue and recognized into revenue as license fees and milestones from collaborations on a straight-line basis over the estimated period of the Company’s substantive performance obligations. If the Company does not have substantive performance obligations, it recognizes non-refundable upfront fees into revenue through the date the deliverable is satisfied. | |||||||||||||
Revenue for non-refundable payments based on the achievement of milestone events under collaboration agreements is recognized in accordance with ASC 605, Subtopic 28, Milestone Method, or ASC 605-28. Milestone events under the Company’s collaboration agreements may include research, development, regulatory, commercialization or sales events. Under ASC 605-28, a milestone payment is recognized as revenue when the applicable event is achieved if the event meets the definition of a milestone and the milestone is determined to be substantive. ASC 605-28 defines a milestone event as an event having all of the following characteristics: (1) there is substantive uncertainty regarding achievement of the milestone event at the inception of the arrangement; (2) the event can only be achieved based, in whole or in part, on either the company’s performance or a specific outcome resulting from the company’s performance; and (3) if achieved, the event would result in additional payment due to the company. The Company also treats events that can only be achieved based, in whole or in part, on either a third party’s performance or a specific outcome resulting from a third party’s performance as milestone events if the criteria of ASC 605-28 are otherwise satisfied. A milestone is considered substantive if it meets all of the following criteria: (A) the payment is commensurate with either the Company’s performance to achieve the milestone or with the enhancement of the value of the delivered item; (B) the payment relates solely to past performance; and (C) the payment is reasonable relative to all of the deliverables and payment terms within the arrangement. If any of these conditions is not met, the milestone payment is deferred and recognized on a straight-line basis over a period determined as discussed above. | |||||||||||||
Research and development costs that are reimbursable under collaboration agreements are recorded in accordance with ASC 605, Subtopic 45, Principal Agent Considerations. Amounts reimbursed under a cost sharing arrangement are reflected as a reduction of research and development expense. | |||||||||||||
Grant payments received prior to the Company’s performance of work required by the terms of the award are recorded as deferred revenue and recognized as grant revenue as the Company performs the work and incurs qualifying costs. | |||||||||||||
Income Taxes | |||||||||||||
The Company uses the liability method in accounting for income taxes as required by ASC Topic 740, Income Taxes, or ASC 740. Under ASC 740, deferred tax assets and liabilities are recorded for operating loss and tax credit carryforwards and for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the assets will be realized. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. The Company’s policy is to classify any interest recognized in accordance with ASC 740 as interest expense and to classify any penalties recognized in accordance with ASC 740 as an expense other than income tax expense. | |||||||||||||
Net Income or Loss Per Share | |||||||||||||
The Company computes net income or loss per share in accordance with ASC Topic 260, Earnings Per Share, or ASC 260. Under the provisions of ASC 260, basic net income or loss per share, or Basic EPS, is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted net income or loss per share, or Diluted EPS, is computed by dividing net income or loss by the weighted average number of common shares outstanding plus, in the case of diluted net income per share, dilutive common share equivalents outstanding. | |||||||||||||
The calculations of Basic EPS and Diluted EPS are set forth in the table below (in thousands, except share and per share amounts): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic and diluted: | |||||||||||||
Net loss | $ | (46,705 | ) | $ | (6,998 | ) | $ | (8,529 | ) | ||||
Weighted average common shares—basic and diluted | 33,640,323 | 33,476,316 | 31,637,283 | ||||||||||
Basic and diluted EPS | $ | (1.39 | ) | $ | (0.21 | ) | $ | (0.27 | ) | ||||
Common share equivalents consist of the incremental common shares that would be outstanding upon the exercise of stock options, calculated using the treasury stock method. For each of the years ended December 31, 2013, 2012 and 2011, the Company excluded all common share equivalents from the calculation of Diluted EPS because the Company had a net loss. As a result, Diluted EPS is identical to Basic EPS for those years. If the Company had been in a net income position for the years ended December 31, 2013, 2012 and 2011, 4,364,064, 4,250,964 and 3,597,530 shares, respectively, subject to outstanding stock options may have been included in the calculation of common share equivalents using the treasury stock method. | |||||||||||||
Public Offerings of Common Stock | |||||||||||||
In May 2011, the Company completed an underwritten public offering of 3,658,537 shares of its common stock. In June 2011, the Company sold an additional 548,780 shares of its common stock upon the exercise of the over-allotment option granted to the underwriters. The Company’s net proceeds from the offering, after deducting underwriters’ discounts and commissions and offering expenses paid by the Company, were $80,840,000. | |||||||||||||
Stock-Based Compensation | |||||||||||||
The Company has two stock-based incentive plans, the 2000 Equity Incentive Plan of Targacept, Inc., as amended and restated through March 15, 2006, or the 2000 Plan, and the Targacept, Inc. 2006 Stock Incentive Plan, as amended and restated through March 9, 2011 and further amended on December 7, 2012, March 13, 2013 and April 10, 2013, or the 2006 Plan. The 2000 Plan and the 2006 Plan, or the Plans, are described more fully in Note 9. | |||||||||||||
The Company records stock-based compensation under the fair value recognition provisions of ASC Topic 718, Compensation—Stock Compensation, or ASC 718. Under ASC 718, the Company calculates the fair value of each option grant using the Black-Scholes-Merton valuation formula. The fair value of each grant is recorded as expense on a straight-line basis over the option’s vesting period. | |||||||||||||
ASC 718 also requires the benefits of tax deductions in excess of recognized compensation expense to be reported as a financing cash flow, rather than as an operating cash flow. This requirement reduces net operating cash flows and increases net financing cash flows for periods after adoption. The Company cannot estimate the future effect of excess tax deductions or shortfalls on cash flows because they depend on, among other things, when employees exercise stock options and the tax deductions available to the Company at those times. | |||||||||||||
Prepaid Expenses | |||||||||||||
The Company defers and capitalizes non-refundable advance payments for goods or services to be received in the future. The Company then charges the advance payments to expense ratably as the goods are delivered or the services are rendered. The Company may make adjustments to the amount charged to expense each period if expectations change regarding the timing of delivery of goods or rendering of services. | |||||||||||||
Fair Value | |||||||||||||
The carrying amounts of cash and cash equivalents, investments in marketable securities, receivables from collaborations, accounts payable and accrued expenses are considered to be representative of their respective fair values due to their short-term natures and, in the case of investments in marketable securities, their market interest rates. Likewise, the carrying amounts of the Company’s long-term debts are considered to be representative of their fair value due to their respective market interest rates. | |||||||||||||
The Company follows ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, for application to financial assets. ASC 820 defines fair value, provides a consistent framework for measuring fair value under GAAP and requires fair value financial statement disclosures. ASC 820 applies only to the measurement and disclosure of financial assets that are required or permitted to be measured and reported at fair value under other ASC topics (except for standards that relate to share-based payments such as ASC Topic 718, Compensation—Stock Compensation). | |||||||||||||
The valuation techniques required by ASC 820 may be based on either observable or unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, and unobservable inputs reflect the Company’s market assumptions. These inputs are classified into the following hierarchy: | |||||||||||||
Level 1 Inputs—quoted prices (unadjusted) in active markets for identical assets that the reporting entity has the ability to access at the measurement date; | |||||||||||||
Level 2 Inputs—inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly; and | |||||||||||||
Level 3 Inputs—unobservable inputs for the assets. | |||||||||||||
The following tables present the Company’s investments in marketable securities (including, if applicable, those classified on the Company’s balance sheet as cash equivalents) that are measured at fair value on a recurring basis as of December 31, 2013 and 2012, respectively: | |||||||||||||
December 31, 2013 | Quoted | Significant | Significant | ||||||||||
Prices in | Other | Unobservable | |||||||||||
Active | Observable | Inputs | |||||||||||
Markets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
(in thousands) | |||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | $ | 37,029 | $ | — | $ | — | |||||||
Corporate debt securities | — | 43,347 | — | ||||||||||
Municipal bonds | — | 3,509 | — | ||||||||||
Certificates of deposit | 5,000 | — | — | ||||||||||
Accrued interest | 407 | — | — | ||||||||||
Total cash equivalents and marketable securities | $ | 42,436 | $ | 46,856 | $ | — | |||||||
December 31, 2012 | Quoted | Significant | Significant | ||||||||||
Prices in | Other | Unobservable | |||||||||||
Active | Observable | Inputs | |||||||||||
Markets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
(in thousands) | |||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | $ | 46,371 | $ | — | $ | — | |||||||
Corporate debt securities | — | 47,173 | — | ||||||||||
Municipal bonds | — | 2,700 | — | ||||||||||
Certificates of deposit | 10,000 | — | — | ||||||||||
Accrued interest | 443 | — | — | ||||||||||
Total cash equivalents and marketable securities | $ | 56,814 | $ | 49,873 | $ | — | |||||||
Corporate debt securities and municipal bonds are valued based on various observable inputs such as benchmark yields, reported trades, broker/dealer quotes, benchmark securities and bids. | |||||||||||||
Accumulated Other Comprehensive Income or Loss | |||||||||||||
Accumulated other comprehensive income or loss, as presented in stockholders’ equity on the Company’s balance sheet, reflects the cumulative net unrealized gains or losses on available-for-sale securities for all periods. The table below reflects changes in accumulated other comprehensive income for the year ended December 31, 2013, in thousands. | |||||||||||||
Accumulated other comprehensive income, January 1, 2013 | $ | 201 | |||||||||||
Unrealized loss on available-for-sale securities, net | (34 | ) | |||||||||||
Net realized gains on available-for sale securities reclassified out of other comprehensive income | (87 | ) | |||||||||||
Income taxes | 7 | ||||||||||||
Accumulated other comprehensive income, December 31, 2013 | $ | 87 | |||||||||||
Investments_in_Marketable_Secu
Investments in Marketable Securities | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Investments in Marketable Securities | ' | ||||||||||||||||
3. Investments in Marketable Securities | |||||||||||||||||
The following is a reconciliation of amortized cost to fair value of available-for-sale marketable securities (including those classified on the Company’s balance sheet as cash equivalents) held at December 31, 2013 and 2012: | |||||||||||||||||
December 31, 2013 | Amortized | Gross | Gross | Fair Value | |||||||||||||
Cost | Unrealized | Unrealized | |||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Security type | |||||||||||||||||
Cash Equivalents | |||||||||||||||||
Corporate debt securities | $ | — | $ | — | $ | — | $ | — | |||||||||
Marketable Securities—Short term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 16,352 | 39 | — | 16,391 | |||||||||||||
Corporate debt securities | 14,307 | 35 | — | 14,342 | |||||||||||||
Municipal Bonds | 1,910 | 3 | — | 1,913 | |||||||||||||
Certificates of deposit | 5,000 | — | — | 5,000 | |||||||||||||
Accrued interest | 198 | — | — | 198 | |||||||||||||
Marketable Securities—Long term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 20,628 | 14 | (4 | ) | 20,638 | ||||||||||||
Corporate debt securities—long term | 28,909 | 101 | (5 | ) | 29,005 | ||||||||||||
Municipal Bonds | 1,598 | 4 | (6 | ) | 1,596 | ||||||||||||
Accrued interest | 209 | — | — | 209 | |||||||||||||
Total available-for-sale marketable securities | $ | 89,111 | $ | 196 | $ | (15 | ) | $ | 89,292 | ||||||||
December 31, 2012 | Amortized | Gross | Gross | Fair Value | |||||||||||||
Cost | Unrealized | Unrealized | |||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Security type | |||||||||||||||||
Cash Equivalents | |||||||||||||||||
Corporate debt securities | $ | 4,000 | $ | — | $ | — | $ | 4,000 | |||||||||
Marketable Securities—Short term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 25,412 | 27 | — | 25,439 | |||||||||||||
Corporate debt securities | 7,193 | 16 | — | 7,209 | |||||||||||||
Certificates of deposit | 10,000 | — | — | 10,000 | |||||||||||||
Accrued interest | 73 | — | — | 73 | |||||||||||||
Marketable Securities—Long term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 20,846 | 86 | — | 20,932 | |||||||||||||
Corporate debt securities—long term | 35,802 | 177 | (15 | ) | 35,964 | ||||||||||||
Municipal Bonds | 2,689 | 11 | — | 2,700 | |||||||||||||
Accrued interest | 370 | — | — | 370 | |||||||||||||
Total available-for-sale marketable securities | $ | 106,385 | $ | 317 | $ | (15 | ) | $ | 106,687 | ||||||||
As of December 31, 2013, the Company held investments in marketable securities with unrealized gains of $196,000 and unrealized losses of $15,000. For the investments in an unrealized loss position, the duration of the loss was less than 12 months, and the investments are not considered to be other-than-temporarily impaired. | |||||||||||||||||
As of December 31, 2013, the Company’s investments in marketable securities reach maturity between January 23, 2014 and December 12, 2016, with a weighted average maturity date of approximately January 29, 2015. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property and Equipment | ' | ||||||||
4. Property and Equipment | |||||||||
As of the respective dates shown, property and equipment consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Equipment | $ | 165 | $ | 2,628 | |||||
Office furniture and fixtures | 2,373 | 2,880 | |||||||
Leasehold improvements | 22 | — | |||||||
2,560 | 5,508 | ||||||||
Less: accumulated depreciation | (1,878 | ) | (3,869 | ) | |||||
Property and equipment, net | $ | 682 | $ | 1,639 | |||||
The Company recorded $505,000, $2,195,000, and $2,463,000 of depreciation expense for the years ended December 31, 2013, 2012 and 2011, respectively. During the year ended December 31, 2012, the Company closed its laboratory operations and completed two reductions in force (see Note 13). In connection with the reductions in force, the Company sold laboratory equipment and office furniture and fixtures with a book value of $519,000 and $1,534,000 for the year ended December 31, 2013 and 2012, respectively, which resulted in a cumulative loss of $213,000 and a cumulative gain of $55,000 for the year ended December 31, 2013 and 2012, respectively. |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Intangible Assets | ' | ||||||||
5. Intangible Assets | |||||||||
As of the respective dates shown, intangible assets consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Patents | $ | 296 | $ | 296 | |||||
Less: accumulated amortization | (199 | ) | (181 | ) | |||||
Total | $ | 97 | $ | 115 | |||||
Intangible assets consist of licensed patent rights assigned to the Company by Layton Bioscience, Inc. in 2002, which had an original value to the Company of $296,000. | |||||||||
The Company’s prospective amortization of its intangible assets is $17,000 per year to research and development expense on a straight-line basis over the remaining useful life of the patents, a period of 17 years from the date of acquisition. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses | ' | ||||||||
6. Accrued Expenses | |||||||||
As of the respective dates shown, accrued expenses consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Clinical trial and nonclinical study costs | $ | 7,578 | $ | 5,232 | |||||
Employee compensation | 1,200 | 797 | |||||||
Other | 52 | 56 | |||||||
Total | $ | 8,830 | $ | 6,085 | |||||
Longterm_Debt
Long-term Debt | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Long-term Debt | ' | ||||
7. Long-term Debt | |||||
In July 2010, the Company entered into a loan agreement with a bank that provides aggregate borrowing capacity of $4,000,000 to be provided in up to three individual term loans on or prior to June 30, 2011 to fund the purchase of equipment, furnishings, software and other fixed assets. The Company borrowed $1,228,000 under the loan agreement in September 2010 and borrowed an additional $2,132,000 in June 2011. The Company’s September 2010 borrowing bears interest at a fixed rate of 3.40% per annum and is repayable in equal monthly installments of $28,000 beginning January 1, 2011 through the maturity date of December 1, 2014. The Company’s June 2011 borrowing bears interest at a fixed rate of 3.471% per annum and is repayable in equal monthly installments of $48,000 beginning July 1, 2011 through the maturity date of June 1, 2015. Pursuant to the loan agreement, the Company granted a first priority security interest in favor of the bank in assets acquired with the proceeds of the loan. | |||||
In March 2008, the Company entered into a loan agreement with a bank that provided borrowing capacity of $5,300,000 to fund the purchase of equipment, furnishings, software and other fixed assets and enable the refinancing of an existing loan facility with another lender. The Company borrowed $4,811,000 upon entering into the loan agreement and borrowed the remaining $489,000 in September 2008. The Company’s March 2008 borrowing bore interest at a fixed rate of 5.231% per annum and was repayable in equal monthly installments of $112,000 beginning April 1, 2008 through the maturity date of March 1, 2012. The March 2008 borrowing was paid and satisfied in full on March 1, 2012. The Company used $1,679,000 of the proceeds from the March 2008 borrowing to pay and satisfy in full the principal and interest outstanding on two tranches of the existing loan facility with another lender. The Company’s September 2008 borrowing bore interest at a fixed rate of 6.131% per annum and was repayable in equal monthly installments of $11,000 beginning October 1, 2008 through the maturity date of September 1, 2012. The September 2008 borrowing was paid and satisfied in full on August 31, 2012. | |||||
The Company paid $56,000, $91,000 and $134,000 in interest under notes payable during the years ended December 31, 2013, 2012 and 2011, respectively. Future scheduled maturities of long-term debt were as follows at December 31, 2013 (in thousands): | |||||
2014 | $ | 853 | |||
2015 | 283 | ||||
2016 and thereafter | — | ||||
$ | 1,136 | ||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
8. Income Taxes | |||||||||||||
For the year ended December 31, 2012, the Company recognized $101,000 of income tax benefit as a result of the application of intraperiod tax allocation provisions of ASC 740, under which the Company is required to consider all items (including items recorded in other comprehensive income) in determining the amount of tax benefit that should be allocated to net loss. The non-cash income tax benefit was offset in full by income tax expense recorded in other comprehensive income. For the year ended December 31, 2013, the Company recorded $7,000 income tax expense, and a corresponding $7,000 income tax benefit in other comprehensive income, as the available-for-sale securities began to be sold. For the year ended December 31, 2011, the Company did not recognize any income tax expense or benefit. For the years shown, components of the Company’s income tax expense (benefit) were as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(in thousands) | |||||||||||||
Current: | |||||||||||||
Federal | $ | — | $ | — | $ | — | |||||||
State | — | — | — | ||||||||||
Net current income tax (benefit) expense | — | — | — | ||||||||||
Deferred: | |||||||||||||
Federal | (18,076 | ) | (1,128 | ) | (6,147 | ) | |||||||
State | 1,010 | (718 | ) | (1,095 | ) | ||||||||
Valuation allowance | 17,073 | 1,745 | 7,242 | ||||||||||
Net deferred income tax expense (benefit) | 7 | (101 | ) | — | |||||||||
Net income tax expense (benefit) | $ | 7 | $ | (101 | ) | $ | — | ||||||
The following is a reconciliation from the federal income tax rate to the Company’s effective tax rate. | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected federal income tax benefit/expense at statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Increase (decrease) resulting from: | |||||||||||||
Research and development credits | 4 | — | 19 | ||||||||||
Stock-based compensation | (1 | ) | (15 | ) | (13 | ) | |||||||
State income tax expense, net of federal benefit | 4 | 2 | 3 | ||||||||||
Change in state rates | (6 | ) | — | — | |||||||||
Change in unrecognized tax benefit reserves | — | — | — | ||||||||||
Change in valuation allowance | (37 | ) | (25 | ) | (85 | ) | |||||||
Other | — | 4 | 41 | ||||||||||
(1 | )% | 1 | % | — | % | ||||||||
At December 31, 2013, 2012 and 2011, the Company had net operating loss carryforwards for federal income tax purposes of $233,170,000, $187,752,000, and $135,860,000, respectively, and for state income tax purposes of $219,792,000, $176,296,000 and $134,470,000, respectively. At December 31, 2013, 2012 and 2011, the Company had research and development income tax credit carryforwards for federal income tax purposes of $12,773,000, $10,762,000 and $10,778,000, respectively. The Company had research and development income tax credit carryforwards for state income tax purposes of $587,000 at December 31, 2013, 2012 and 2011. The federal net operating loss carryforwards begin to expire in 2024. The state net operating loss carryforwards begin to expire in 2019. The federal and state research and development tax credits begin to expire in 2021. | |||||||||||||
Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. A series of stock issuances gave rise to such an ownership change in December 2004. As a result, an annual limitation is imposed on the Company’s use of net operating loss and credit carryforwards attributable to periods before the change. | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s net deferred tax assets relate principally to its research and development tax credits and net operating loss carryforwards. A valuation allowance has been recognized to offset the deferred tax assets. If and when recognized, the tax benefit for those items will be reflected in the period in which the benefit is recorded as a reduction of income tax expense. However, in the event the Company has excess tax deductions related to the exercise of stock options, the tax benefit will be reflected as an increase to capital in excess of par value. The utilization of the loss carryforwards to reduce future income taxes will depend on the Company’s ability to generate sufficient taxable income prior to the expiration of the net operating loss carryforwards. The valuation allowance increased by $17,110,000, $1,745,000, and $7,242,000 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
As of the respective dates shown, significant components of the Company’s deferred tax assets (liabilities) were as follows: | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
(in thousands) | |||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforward | $ | 81,183 | $ | 65,935 | |||||||||
Research and development tax credit | 12,044 | 10,033 | |||||||||||
Stock-based compensation | 6,498 | 5,260 | |||||||||||
Patents | 1,641 | 1,798 | |||||||||||
Collaboration revenue | — | 1,341 | |||||||||||
Other | 36 | 94 | |||||||||||
Total gross deferred tax assets | 101,402 | 84,461 | |||||||||||
Valuation allowance | (101,211 | ) | (84,101 | ) | |||||||||
Net deferred tax asset | 191 | 360 | |||||||||||
Deferred tax liabilities | |||||||||||||
Equipment and other | (191 | ) | (360 | ) | |||||||||
Net deferred tax asset | $ | — | $ | — | |||||||||
As of December 31, 2013, the Company had cumulative tax deductions from exercises of stock options in excess of expense recorded for the stock options under GAAP. The $7,551,000 benefit of these excess tax deductions had not begun to be realized as of December 31, 2013 because the Company incurred operating losses in the years the respective stock options were exercised and has incurred cumulative net operating losses since inception. Accordingly, the tax benefit will not be recognized as an increase to capital in excess of par value unless and until the excess deductions reduce income taxes payable. | |||||||||||||
The Company follows the provisions of ASC 740, which prescribes a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods and disclosures. There was no cumulative effect adjustment upon adoption. | |||||||||||||
A reconciliation of beginning and ending unrecognized tax benefits is as follows (in thousands). | |||||||||||||
Balance at January 1, 2011 | $ | 1,474 | |||||||||||
Additions (decreases) based on tax positions related to current and prior years | — | ||||||||||||
Balance at December 31, 2011 | 1,474 | ||||||||||||
Additions (decreases) based on tax positions related to current and prior years | — | ||||||||||||
Balance at December 31, 2012 | 1,474 | ||||||||||||
Additions (decreases) based on tax positions related to current and prior years | 2 | ||||||||||||
Balance at December 31, 2013 | $ | 1,476 | |||||||||||
None of the unrecognized tax benefits would, if recognized, affect the effective tax rate because the Company has recorded a valuation allowance to fully offset federal and state deferred tax assets. The Company has no tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease during 2014. No interest or penalties with respect to unrecognized tax positions are recognized in the statement of comprehensive income (loss) for any of the years ended December 31, 2013, 2012 or 2011. | |||||||||||||
Because the Company has incurred cumulative net operating losses since inception, all tax years remain open to examination by U.S. federal, North Carolina and Massachusetts tax authorities. The Company’s 2010 federal income tax return is currently under examination. |
StockBased_Incentive_Plans
Stock-Based Incentive Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Stock-Based Incentive Plans | ' | ||||||||||||||||
9. Stock-Based Incentive Plans | |||||||||||||||||
The 2000 Plan became effective in August 2000. The 2006 Plan became effective in April 2006 and is the successor equity incentive program to the 2000 Plan. All shares previously reserved under the 2000 Plan and not subject to outstanding awards under the 2000 Plan are now reserved for grant under the 2006 Plan. As of December 31, 2013, the number of shares authorized for issuance under the Plans was 7,821,554, of which 3,281,926 shares remained available for grant. | |||||||||||||||||
Awards may be made with respect to the 2006 Plan, or may have been made with respect to both Plans, to participants under the Plans in the form of incentive and nonqualified stock options, restricted stock, stock appreciation rights, stock awards, and performance awards. Eligible participants under the Plans include employees, directors and certain independent contractors, consultants or advisors of the Company or a related corporation. Awards made under the Plans have vesting periods that are determined at the discretion of the administrator and range from 0 to 5 years and most commonly have 10-year contractual terms or, in some cases, shorter terms designed to comply with Section 409A of the Internal Revenue Code. The exercise price of stock options granted under the Plans may not be less than 100% of the fair market value of the common stock on the date of grant, as determined by the administrator. | |||||||||||||||||
In addition to awards made under the Plans, on December 3, 2012, the Company granted a nonqualified option to purchase 400,000 shares of its common stock pursuant to an employment agreement entered into by the Company in connection with the hire of its president and chief executive officer. The option, which was not granted pursuant to a Plan, has similar terms to nonqualified stock options granted under the 2006 Plan. | |||||||||||||||||
Under ASC 718, the Company recognizes the grant date fair value of stock options issued to employees and non-employee directors over the requisite service periods, which are typically the vesting periods. The Company uses the Black-Scholes-Merton formula to estimate the fair value of its stock-based payments. The volatility assumption used in the Black-Scholes-Merton formula is primarily based on the Company’s implied volatility, the calculated historical volatility of twelve to sixteen benchmark companies in the Company’s industry that have been identified as comparable public entities, the Company’s historical volatility and the implied volatility of the same benchmark companies. The expected term for stock options granted during 2013, 2012 and 2011 is based on historical analysis. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. | |||||||||||||||||
The following table illustrates the weighted average assumptions for the Black-Scholes-Merton model used in determining the fair value of stock options granted as of the respective dates shown: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Dividend yield | — | — | — | ||||||||||||||
Risk-free interest rate | 1.1 | % | 1 | % | 2.5 | % | |||||||||||
Volatility | 82 | % | 69 | % | 67 | % | |||||||||||
Expected term | 5.73 years | 6.16 years | 6.00 years | ||||||||||||||
During 2013 and 2012, the Company partially accelerated the vesting of, and/or extended the permitted period for exercise for, some outstanding stock options held by several employees who departed the Company. These modifications resulted in incremental compensation cost recorded by the Company for the year ended December 31, 2013 and 2012 of $573,000 and $1,397,000. | |||||||||||||||||
A summary of option activity and changes during the year ended December 31, 2013 appears below. | |||||||||||||||||
Shares | Weighted | Weighted | Aggregate | ||||||||||||||
Subject to | Average | Average | Intrinsic | ||||||||||||||
Options | Exercise Price | Remaining | Value | ||||||||||||||
Per Share | Contractual | ||||||||||||||||
Term | |||||||||||||||||
(in thousands) | |||||||||||||||||
Outstanding at January 1, 2013 | 4,369,804 | $ | 10.84 | ||||||||||||||
Granted | 926,650 | 4.95 | |||||||||||||||
Forfeited | (653,728 | ) | 10.12 | ||||||||||||||
Exercised | (103,098 | ) | 2.89 | ||||||||||||||
Outstanding at December 31, 2013 | 4,539,628 | $ | 9.93 | 5.48 | $ | 372,288 | |||||||||||
Vested and exercisable at December 31, 2013 | 3,181,974 | $ | 11.54 | 4.05 years | $ | 372,288 | |||||||||||
The weighted average grant date fair value of options granted during the years ended December 31, 2013, 2012, and 2011 was $3.38, $2.98 and $15.87, respectively. The total intrinsic value of options exercised during the years ended December 31, 2013, 2012, and 2011 was $200,000, $472,000, and $6,082,000, respectively. During 2013, 176,102 shares subject to options expired upon reaching the 10-year contractual term, and are included in the “Forfeited” amount in the table above. | |||||||||||||||||
A summary of the status of non-vested stock options outstanding as of December 31, 2013 and changes during the year ended December 31, 2013 appears below. | |||||||||||||||||
Shares | Weighted Average | ||||||||||||||||
Subject to | Grant-Date Fair | ||||||||||||||||
Options | Value Per Share | ||||||||||||||||
Non-vested at January 1, 2013 | 1,567,570 | $ | 5.84 | ||||||||||||||
Granted | 926,650 | 3.38 | |||||||||||||||
Vested | (803,484 | ) | 6.45 | ||||||||||||||
Forfeited | (333,082 | ) | 4.92 | ||||||||||||||
Non-vested at December 31, 2013 | 1,357,654 | $ | 4.04 | ||||||||||||||
As of December 31, 2013, there was $5,491,000 of total unrecognized compensation expense related to non-vested stock-based compensation arrangements, before considering forfeitures. That cost is expected to be recorded over a weighted average period of 2.83 years. The total fair value of shares subject to stock-based compensation arrangements that vested during the years ended December 31, 2013, 2012, and 2011 was $5,140,000, $7,836,000 and $8,481,000, respectively. | |||||||||||||||||
The Company had 4,539,337 and 4,369,804 shares of common stock reserved for future issuance upon the exercise of outstanding stock options at December 31, 2013 and 2012, respectively. | |||||||||||||||||
On January 23, 2014, the Company granted 834,618 stock options to employees. The stock options will vest over 16 quarters, beginning March 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
10. Commitments and Contingencies | |||||
Leases | |||||
On December 4, 2012, the Company entered into an agreement with B/E Aerospace, Inc. to sublease approximately 18,282 square feet of office space in Winston-Salem, North Carolina. The term of the sublease began on January 1, 2013 and ends on December 30, 2015. The monthly rent payable by the Company under the sublease is approximately $22,000 for the first year, subject to escalation of approximately 3% for each subsequent year of the term. The sublease is subject to the terms and conditions of the prime lease covering the subleased space between B/E Aerospace and its landlord, SL Winston-Salem LLC. | |||||
The Company has entered into various other lease agreements, primarily for storage space and equipment. The Company’s previous office lease expired on December 31, 2012. Rent expense incurred by the Company under the office leases and other operating leases was $582,000, $2,819,000 and $2,575,000 for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
The following table illustrates expected future lease payments under all operating leases (in thousands): | |||||
2014 | $ | 492 | |||
2015 | 327 | ||||
2016 | |||||
2017 and thereafter | — | ||||
$ | 819 | ||||
Employment Arrangements | |||||
The Company has entered into employment agreements with some of its executive officers. Under the agreements, if the Company terminates the employment of the executive officer other than for just cause or if the executive officer terminates employment for good reason, in each case as that term is defined in the agreement, the executive officer is entitled, among other things, to receive severance equal to current base salary for from up to nine to 18 months following termination, depending on the executive and the circumstances of termination. The executive officer would also be entitled to continuation of the health and life insurance benefits coverage provided as of the date of termination for the period during which he receives severance. |
Retirement_Savings_Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2013 | |
Retirement Savings Plan | ' |
11. Retirement Savings Plan | |
The Company has a 401(k) retirement plan in which all of its employees are eligible to participate. The Company contributed $275,000, $454,000, and $535,000 to the plan for the years ended December 31, 2013, 2012 and 2011, respectively. The Company matched employee contributions to the plan, on a per employee basis, up to 4% of each employee’s wages, subject to statutory limits, for the years ended December 31, 2013, 2012 and 2011. |
Strategic_Alliance_and_Collabo
Strategic Alliance and Collaboration Agreements | 12 Months Ended |
Dec. 31, 2013 | |
Strategic Alliance and Collaboration Agreements | ' |
12. Strategic Alliance and Collaboration Agreements | |
AstraZeneca AB | |
In December 2005, the Company entered into a collaborative research and license agreement with AstraZeneca AB that was initially focused in cognitive disorders. In March 2013, the Company and AstraZeneca amended the agreement. As amended, the agreement permits AstraZeneca to pursue development and commercialization of compounds that it has licensed from the Company in any therapeutic area. The Company is eligible to receive license fees and milestone payments under the agreement. The amount of license fees and milestone payments depends on the timing and achievement of specified milestone events. | |
AstraZeneca paid the Company an initial fee of $10,000,000 in February 2006. Based on the agreement terms, the Company allocated $5,000,000 of the initial fee to a nonclinical research collaboration that the Company conducted with AstraZeneca under the agreement, which the Company recognized as revenue on a straight-line basis over the four-year term of the research collaboration. The Company deferred recognition of the remaining $5,000,000 of the initial fee, which was allocated to grants of licenses to develop and commercialize the Company’s product candidate TC-1734 (formerly known as AZD3480), until December 2006, when AstraZeneca made a determination to proceed with further development of TC-1734. As a result, in the first quarter of 2007, the Company began recognizing the $5,000,000 of the initial fee that it had previously deferred as revenue on a straight-line basis over the estimated development period for TC-1734. In September 2010, the Company and AstraZeneca amended the agreement to enable the Company to conduct a clinical trial of TC-1734 in mild to moderate Alzheimer’s disease and to provide for respective roles and responsibilities and associated financial terms for such a study. Under the 2010 amendment, the Company received from AstraZeneca $500,000 in October 2010, $2,000,000 in September 2011 and $3,500,000 in December 2011. | |
In March 2013, AstraZeneca exercised its right to terminate TC-1734 from the collaboration. At that time, the Company was recognizing both the portion of the $5,000,000 of the initial fee attributable to TC-1734 license grants not yet recognized and the payments received under the 2010 amendment into revenue on a straight-line basis over the period of the Company’s substantive performance obligations under the agreement, as amended. As a result of AstraZeneca’s exercise of its termination right for TC-1734, the Company recognized into revenue during the first quarter of 2013 all of the initial fee and payments received under the 2010 amendment that had not yet been recognized as of the date of AstraZeneca’s action, totaling $3,142,000. The Company recognized an aggregate of $3,536,000, $2,946,000, and $1,192,000 of the initial fee and the payments received under the 2010 amendment into revenue during the years ended December 31, 2013, 2012, and 2011, respectively. | |
The Company is eligible to receive additional payments from AstraZeneca if specified milestone events under the agreement are achieved for the Company’s product candidate AZD1446 (TC-6683). The amounts of the contingent milestone payments vary depending on the applicable indication pursued and range from an additional $7,000,000 to $14,000,000 if development milestone events are achieved, an additional $8,000,000 to $10,000,000 if a regulatory milestone event is achieved, up to an additional $12,000,000 to $49,000,000 if first commercial sale milestone events are achieved and, in specified circumstances, up to an additional $30,000,000 if sales-related milestone events are achieved. If regulatory approval is achieved for AZD1446 for any indication, the Company is also eligible to receive stepped royalties on any sales of AZD1446. If AZD1446 is subsequently developed under the agreement for other indications, the Company would also be eligible to receive contingent milestone payments of up to $35,000,000 for each successive indication, if development, regulatory and first detail milestone events are achieved. | |
Based solely on projected activities and timelines, the Company expects that the earliest a contingent milestone payment could conceivably be earned under the agreement with respect to AZD1446 is in the second half of 2014, in the amount of $2,000,000, if a development milestone event is achieved. The likelihood that the Company will earn that milestone amount or achieve any particular milestone event with respect to AZD1446 in 2014 or in any future period is uncertain, and the Company may not earn any milestone amount or achieve any milestone event with respect to AZD1446 in 2014 or ever. The Company considers that each of the potential milestone events under the agreement with respect to AZD1446 would be substantive because the applicable criteria of its revenue recognition policy (see Note 2) would be satisfied. | |
AstraZeneca has paid the Company an aggregate of $88,120,000 under the agreement since its inception, including the initial fee and payments upon the achievement of milestone events, to maintain option rights and for research services rendered in the completed preclinical research collaboration. As of December 31, 2013, this entire amount had been fully recognized into revenue. | |
Prior Collaboration Agreement | |
In December 2009, the Company entered into a collaboration and license agreement with AstraZeneca AB for the global development and commercialization of TC-5214 as a treatment for major depressive disorder. Under the agreement, AstraZeneca made an upfront payment to the Company of $200,000,000. The Company recorded the upfront payment made by AstraZeneca as deferred revenue and began recognizing the payment as revenue on a straight-line basis over the estimated period of the Company’s substantive performance obligations under the agreement, or approximately 33 months after the agreement date. The Company recognized $54,473,000 of the upfront payment as revenue for the year ended December 31, 2012 and $72,565,000 for each of the years ended December 31, 2011 and 2010. Under the terms of an existing license agreement, the Company paid $16,000,000 to University of South Florida Research Foundation, in February 2011 based on the Company’s receipt of the upfront payment from AstraZeneca. | |
Under the agreement, AstraZeneca was responsible for 80% and the Company was responsible for 20% of the costs of the global development program for TC-5214 in major depressive disorder, except that AstraZeneca was responsible for 100% of development costs that were required only for countries outside the United States and the European Union. In addition, for each of the Company and AstraZeneca, costs that were not contemplated at execution to be part of the program were in some cases excluded from the cost-sharing arrangement. | |
The Company’s portion of the costs of the TC-5214 development program was $2,175,000 and $32,046,000 for the years ended December 31, 2012 and 2011, respectively. AstraZeneca’s allocable portion of the program costs paid by the Company was $127,000 and $336,000 for the years ended December 31, 2012 and 2011, respectively. AstraZeneca’s allocable portion of the program costs paid by the Company is reflected in the Company’s financial statements as a reduction to research and development expense. | |
In the first quarter of 2012, the Company and AstraZeneca announced that, based on the totality of the results of the Phase 3 development program for TC-5214, a regulatory submission for TC-5214 as an adjunct therapy for major depressive disorder would not be pursued. Also in the first quarter of 2012, the Company reported that the Company and AstraZeneca determined to discontinue a Phase 2b clinical trial of TC-5214 as a “switch” monotherapy. These determinations resulted in a change in the estimated period of the Company’s substantive performance obligations under the agreement, and the Company revised the revenue recognition period for the upfront payment accordingly. As a result, the entire upfront payment was recognized into revenue by June 30, 2012. In April 2012, the Company received notice of termination of the agreement from AstraZeneca. By the terms of the agreement, the termination became effective in May 2012. | |
GlaxoSmithKline | |
On July 27, 2007, the Company entered into a product development and commercialization agreement with SmithKline Beecham Corporation, doing business as GlaxoSmithKline, and Glaxo Group Limited, which are referred to together as GlaxoSmithKline, that set forth the terms of an alliance designed to discover, develop and market product candidates that selectively target specified NNR subtypes for specified therapeutic focus areas. In February 2011, the Company received notice of termination of the agreement from GlaxoSmithKline. By the terms of the agreement, the termination became effective in May 2011. | |
Under the agreement and a related stock purchase agreement, GlaxoSmithKline made an initial payment to the Company of $20,000,000 and purchased 1,275,502 shares of the Company’s common stock for an aggregate purchase price of $15,000,000 on July 27, 2007. The purchase price paid by GlaxoSmithKline reflected an aggregate deemed premium of $3,521,000, based on the closing price of the Company’s common stock on the trading day immediately preceding the date that the agreements were signed and announced. The Company deferred recognition of both the initial payment made by GlaxoSmithKline and the deemed premium paid for the shares of the Company’s common stock purchased by GlaxoSmithKline and began recognizing both amounts into revenue on a straight-line basis over the nine-year period of the Company’s research and early development obligations estimated at inception of the agreement. | |
In December 2007, the Company received a $6,000,000 payment from GlaxoSmithKline upon the achievement of a specified milestone event under the agreement. The Company determined the payment did not meet each of the conditions of its revenue recognition policy (see Note 2) required for recognition of the full amount into revenue upon achievement of the milestone. Specifically, based on the progress as of inception of the agreement of the product candidate to which the payment related, there was not substantive uncertainty regarding achievement of the milestone event within the meaning of the Company’s revenue recognition policy. Accordingly, the Company recorded the payment as deferred revenue and began recognizing it into revenue on a straight-line basis over the remaining portion of the nine-year period of the Company’s research and early development obligations estimated at inception of the agreement. | |
As a result of its receipt in February 2011 of notice of termination of the agreement, the Company recognized the remaining $18,421,000 of the payments discussed above that had not previously been recognized into revenue for the first quarter of 2011 in accordance with its revenue recognition policy (see Note 2). |
Reductions_In_Force
Reductions In Force | 12 Months Ended |
Dec. 31, 2013 | |
Reductions In Force | ' |
13. Reductions In Force | |
On April 25, 2012, the Company announced a reduction in force as part of a plan to focus its resources on its more advanced programs. The restructuring was completed in the second quarter of 2012. The Company recorded $2,312,000 in severance and other charges related to the reduction in force in the year ended December 31, 2012. Upon the completion of the restructuring, the Company’s workforce was reduced by 65 employees, or approximately 46%. | |
On October 8, 2012, the Company announced a further reduction in force and the closing of its laboratory operations. Both of these actions were completed in the fourth quarter of 2012. The Company recorded $1,406,000 in severance and other charges related to the reduction in force in the year ended December 31, 2012. Upon the completion of the restructuring, the Company’s workforce was further reduced by 27 employees, or approximately 38%. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Selected Quarterly Financial Data (unaudited) | ' | ||||||||||||||||
14. Selected Quarterly Financial Data (unaudited) | |||||||||||||||||
2013 Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Net operating revenues | $ | 3,536 | $ | — | $ | — | $ | 93 | |||||||||
Loss from operations | (8,274 | ) | (12,488 | ) | (13,146 | ) | (13,308 | ) | |||||||||
Net loss | (8,066 | ) | (12,371 | ) | (12,902 | ) | (13,366 | ) | |||||||||
Basic net loss per share(1) | $ | (0.24 | ) | $ | (0.37 | ) | $ | (0.38 | ) | $ | (0.40 | ) | |||||
Weighted average common shares outstanding—basic and diluted(2) | 33,616,342 | 33,626,980 | 33,644,256 | 33,673,047 | |||||||||||||
2012 Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Net operating revenues | $ | 22,857 | $ | 33,645 | $ | 768 | $ | 590 | |||||||||
Income (loss) from operations | 1,986 | 14,234 | (8,098 | ) | (16,260 | ) | |||||||||||
Net income (loss) | 2,259 | 14,492 | (7,879 | ) | (15,870 | ) | |||||||||||
Basic net income (loss) per share(1) | $ | 0.07 | $ | 0.43 | $ | (0.24 | ) | $ | (0.47 | ) | |||||||
Diluted net income (loss) per share(1) | $ | 0.07 | $ | 0.43 | $ | (0.24 | ) | $ | (0.47 | ) | |||||||
Weighted average common shares outstanding—basic | 33,390,286 | 33,409,341 | 33,494,106 | 33,609,867 | |||||||||||||
Weighted average common shares outstanding—diluted(2) | 33,822,010 | 33,638,629 | 33,494,106 | 33,609,867 | |||||||||||||
-1 | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, the sum of quarterly amounts may not equal the annual amount because of differences in the weighted average common shares outstanding during each period, principally due to the effect of share issuances by the Company during the year. | ||||||||||||||||
-2 | Diluted weighted average common shares outstanding are identical to basic weighted average common shares outstanding and Diluted EPS is identical to Basic EPS for the each quarter of 2013 and for the third and fourth quarters of 2012 because common share equivalents are excluded from the calculations of diluted weighted average common shares outstanding for those quarters, as their effect is antidilutive. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and Cash Equivalents | |||||||||||||
The Company considers cash equivalents to be those investments which are highly liquid, readily convertible to cash and mature within three months from the date of purchase. | |||||||||||||
Investments in Marketable Securities | ' | ||||||||||||
Investments in Marketable Securities | |||||||||||||
Consistent with its investment policy, the Company invests its cash allocated to fund its short-term liquidity requirements with prominent financial institutions in bank depository accounts and institutional money market funds and the Company invests the remainder of its cash in corporate debt securities and municipal bonds rated at least A quality or equivalent, U.S. Treasury notes and bonds, U.S. and state government agency-backed securities and certificates of deposit. | |||||||||||||
The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates its classification as of each balance sheet date. All marketable securities owned during 2013 and 2012 were classified as available-for-sale. The cost of securities sold is based on the specific identification method. Investments in marketable securities are recorded as of each balance sheet date at fair value, with unrealized gains and, to the extent deemed temporary, unrealized losses included in stockholders’ equity. Interest and dividend income on investments in marketable securities, accretion of discounts and amortization of premiums and realized gains and losses are included in interest income in the statement of comprehensive income (loss). | |||||||||||||
An investment in marketable securities is considered to be impaired when a decline in fair value below its cost basis is determined to be other than temporary. The Company evaluates whether a decline in fair value of an investment in marketable securities below its cost basis is other than temporary using available evidence. In the event that the cost basis of the investment exceeds its fair value, the Company evaluates, among other factors, the amount and duration of the period that the fair value is less than the cost basis, the financial health of and business outlook for the issuer, including industry and sector performance and operational and financing cash flow factors, overall market conditions and trends, the Company’s intent to sell the investment and whether it is more likely than not the Company would be required to sell the investment before its anticipated recovery. If a decline in fair value is determined to be other than temporary, the Company records an impairment charge in the statement of comprehensive income (loss) and establishes a new cost basis in the investment. | |||||||||||||
Receivables | ' | ||||||||||||
Receivables | |||||||||||||
The Company’s current receivables at December 31, 2013 and 2012 are related to the Company’s collaboration agreement with AstraZeneca AB and the sale of equipment as a result of the Company closing its laboratory operations. During 2013, 2012, and 2011, the Company recognized revenue of $3,536,000, $57,420,000, and $96,979,000, respectively, or 97%, 99% and 99% of net operating revenues, respectively, from the collaboration and alliance agreements discussed in Note 12. During 2013 and 2012, the Company sold equipment with a book value of $519,000 and $1,534,000, respectively, of which $183,000 and $1,046,000 was receivable at December 31, 2013 and 2012, respectively. | |||||||||||||
Long-lived Assets | ' | ||||||||||||
Long-lived Assets | |||||||||||||
Property and equipment consists primarily of laboratory equipment, office furniture and fixtures and, prior to December 31, 2013, leasehold improvements and is recorded at historical cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Equipment is typically depreciated over 3 to 5 years, office furniture and fixtures are typically depreciated over 7 years, and leasehold improvements are typically amortized over the lesser of the asset life or the lease term. | |||||||||||||
The Company capitalizes the costs of intellectual property acquired or licensed from external sources as intangible assets if, at the time of acquisition, the intellectual property has reached technological feasibility. Intellectual property acquired or licensed from external sources that has not reached technological feasibility at the time of acquisition or that has no expected future use is charged to research and development expense as incurred. The Company records all other charges related to the filing, prosecution and maintenance of patents to expense as incurred. | |||||||||||||
The Company assesses the net realizable value of its long-lived assets and evaluates these assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment charge would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. An impairment charge, if recognized, would be based on the excess of the carrying value of the impaired asset over its estimated fair value. | |||||||||||||
Research and Development Expense | ' | ||||||||||||
Research and Development Expense | |||||||||||||
Research and development costs are expensed as incurred and include direct costs incurred to third parties related to research or development of the Company’s product candidates, salaries of, and stock-based compensation for, personnel involved in research and development activities, contractor fees, administrative expenses and allocations of research and development-related overhead costs. Administrative expenses and research and development-related overhead costs included in research and development expense consist of allocations of facility and equipment lease charges, depreciation and amortization of assets, and insurance, legal and supply costs that are directly related to research and development activities. The Company directly reduces research and development expenses for amounts reimbursed pursuant to the cost-sharing agreements described in Note 12. | |||||||||||||
Accrued Expenses | ' | ||||||||||||
Accrued Expenses | |||||||||||||
The Company records accruals based on estimates of the services received, efforts expended and amounts owed pursuant to contracts with clinical trial sites, contract research organizations and other service providers. In the normal course of business, the Company contracts with third parties to perform various clinical trial and other research and development activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under these agreements depend on the performance of services or the achievement of specified events, such as the production of drug substance or clinical trial materials, the recruitment of clinical trial subjects, the completion of portions of a non-clinical study or clinical trial or similar conditions. The objective of the Company’s accrual policy is to match the recording of expenses in its financial statements to the actual services received and efforts expended. As such, expense accruals are recognized based on the Company’s estimate of the degree of completion of the event or events specified in a particular contract as giving rise to a payment. | |||||||||||||
Credit Risk | ' | ||||||||||||
Credit Risk | |||||||||||||
Financial instruments that potentially subject the Company to credit risk consist principally of cash, investments in marketable securities and receivables from collaborations. The Company has established guidelines for investment of its cash that are designed to emphasize safety, liquidity and preservation of capital. The Company places its cash and cash equivalents with prominent financial institutions. At December 31, 2013 and 2012, the Company had deposits in excess of federally insured limits of $57,485,000 and $87,081,000, respectively. | |||||||||||||
Revenue Recognition | ' | ||||||||||||
Revenue Recognition | |||||||||||||
The Company uses the revenue recognition guidance established by Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition, or ASC 605. In determining the accounting for collaboration and alliance agreements, the Company follows the provisions of ASC 605, Subtopic 25, Multiple Element Arrangements, or ASC 605-25. ASC 605-25 provides guidance on whether an arrangement that involves multiple revenue-generating activities or deliverables should be divided into separate units of accounting for revenue recognition purposes and, if division is required, how the arrangement consideration should be allocated among the separate units of accounting. If the arrangement constitutes separate units of accounting according to the separation criteria of ASC 605-25, the consideration received is allocated among the separate units of accounting and the applicable revenue recognition criteria must be applied to each unit. If the arrangement constitutes a single unit of accounting, the revenue recognition policy must be determined for the entire arrangement and the consideration received is recognized over the period of inception through the date on which the last deliverable within the single unit of accounting is expected to be delivered. Revisions to the estimated period of recognition are reflected in revenue prospectively. | |||||||||||||
Collaboration research and development revenue is earned and recognized as research or development is performed and related expenses are incurred. Non-refundable upfront fees, which may include, for example, an initial payment upon effectiveness of the contractual relationship, payment representing a common stock purchase premium or payment to secure a right for a future license, are recorded as deferred revenue and recognized into revenue as license fees and milestones from collaborations on a straight-line basis over the estimated period of the Company’s substantive performance obligations. If the Company does not have substantive performance obligations, it recognizes non-refundable upfront fees into revenue through the date the deliverable is satisfied. | |||||||||||||
Revenue for non-refundable payments based on the achievement of milestone events under collaboration agreements is recognized in accordance with ASC 605, Subtopic 28, Milestone Method, or ASC 605-28. Milestone events under the Company’s collaboration agreements may include research, development, regulatory, commercialization or sales events. Under ASC 605-28, a milestone payment is recognized as revenue when the applicable event is achieved if the event meets the definition of a milestone and the milestone is determined to be substantive. ASC 605-28 defines a milestone event as an event having all of the following characteristics: (1) there is substantive uncertainty regarding achievement of the milestone event at the inception of the arrangement; (2) the event can only be achieved based, in whole or in part, on either the company’s performance or a specific outcome resulting from the company’s performance; and (3) if achieved, the event would result in additional payment due to the company. The Company also treats events that can only be achieved based, in whole or in part, on either a third party’s performance or a specific outcome resulting from a third party’s performance as milestone events if the criteria of ASC 605-28 are otherwise satisfied. A milestone is considered substantive if it meets all of the following criteria: (A) the payment is commensurate with either the Company’s performance to achieve the milestone or with the enhancement of the value of the delivered item; (B) the payment relates solely to past performance; and (C) the payment is reasonable relative to all of the deliverables and payment terms within the arrangement. If any of these conditions is not met, the milestone payment is deferred and recognized on a straight-line basis over a period determined as discussed above. | |||||||||||||
Research and development costs that are reimbursable under collaboration agreements are recorded in accordance with ASC 605, Subtopic 45, Principal Agent Considerations. Amounts reimbursed under a cost sharing arrangement are reflected as a reduction of research and development expense. | |||||||||||||
Grant payments received prior to the Company’s performance of work required by the terms of the award are recorded as deferred revenue and recognized as grant revenue as the Company performs the work and incurs qualifying costs. | |||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes | |||||||||||||
The Company uses the liability method in accounting for income taxes as required by ASC Topic 740, Income Taxes, or ASC 740. Under ASC 740, deferred tax assets and liabilities are recorded for operating loss and tax credit carryforwards and for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the assets will be realized. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. The Company’s policy is to classify any interest recognized in accordance with ASC 740 as interest expense and to classify any penalties recognized in accordance with ASC 740 as an expense other than income tax expense. | |||||||||||||
Net Income or Loss Per Share | ' | ||||||||||||
Net Income or Loss Per Share | |||||||||||||
The Company computes net income or loss per share in accordance with ASC Topic 260, Earnings Per Share, or ASC 260. Under the provisions of ASC 260, basic net income or loss per share, or Basic EPS, is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted net income or loss per share, or Diluted EPS, is computed by dividing net income or loss by the weighted average number of common shares outstanding plus, in the case of diluted net income per share, dilutive common share equivalents outstanding. | |||||||||||||
The calculations of Basic EPS and Diluted EPS are set forth in the table below (in thousands, except share and per share amounts): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic and diluted: | |||||||||||||
Net loss | $ | (46,705 | ) | $ | (6,998 | ) | $ | (8,529 | ) | ||||
Weighted average common shares—basic and diluted | 33,640,323 | 33,476,316 | 31,637,283 | ||||||||||
Basic and diluted EPS | $ | (1.39 | ) | $ | (0.21 | ) | $ | (0.27 | ) | ||||
Common share equivalents consist of the incremental common shares that would be outstanding upon the exercise of stock options, calculated using the treasury stock method. For each of the years ended December 31, 2013, 2012 and 2011, the Company excluded all common share equivalents from the calculation of Diluted EPS because the Company had a net loss. As a result, Diluted EPS is identical to Basic EPS for those years. If the Company had been in a net income position for the years ended December 31, 2013, 2012 and 2011, 4,364,064, 4,250,964 and 3,597,530 shares, respectively, subject to outstanding stock options may have been included in the calculation of common share equivalents using the treasury stock method. | |||||||||||||
Public Offerings of Common Stock | ' | ||||||||||||
Public Offerings of Common Stock | |||||||||||||
In May 2011, the Company completed an underwritten public offering of 3,658,537 shares of its common stock. In June 2011, the Company sold an additional 548,780 shares of its common stock upon the exercise of the over-allotment option granted to the underwriters. The Company’s net proceeds from the offering, after deducting underwriters’ discounts and commissions and offering expenses paid by the Company, were $80,840,000. | |||||||||||||
Stock-Based Compensation | ' | ||||||||||||
Stock-Based Compensation | |||||||||||||
The Company has two stock-based incentive plans, the 2000 Equity Incentive Plan of Targacept, Inc., as amended and restated through March 15, 2006, or the 2000 Plan, and the Targacept, Inc. 2006 Stock Incentive Plan, as amended and restated through March 9, 2011 and further amended on December 7, 2012, March 13, 2013 and April 10, 2013, or the 2006 Plan. The 2000 Plan and the 2006 Plan, or the Plans, are described more fully in Note 9. | |||||||||||||
The Company records stock-based compensation under the fair value recognition provisions of ASC Topic 718, Compensation—Stock Compensation, or ASC 718. Under ASC 718, the Company calculates the fair value of each option grant using the Black-Scholes-Merton valuation formula. The fair value of each grant is recorded as expense on a straight-line basis over the option’s vesting period. | |||||||||||||
ASC 718 also requires the benefits of tax deductions in excess of recognized compensation expense to be reported as a financing cash flow, rather than as an operating cash flow. This requirement reduces net operating cash flows and increases net financing cash flows for periods after adoption. The Company cannot estimate the future effect of excess tax deductions or shortfalls on cash flows because they depend on, among other things, when employees exercise stock options and the tax deductions available to the Company at those times. | |||||||||||||
Prepaid Expenses | ' | ||||||||||||
Prepaid Expenses | |||||||||||||
The Company defers and capitalizes non-refundable advance payments for goods or services to be received in the future. The Company then charges the advance payments to expense ratably as the goods are delivered or the services are rendered. The Company may make adjustments to the amount charged to expense each period if expectations change regarding the timing of delivery of goods or rendering of services. | |||||||||||||
Fair Value | ' | ||||||||||||
Fair Value | |||||||||||||
The carrying amounts of cash and cash equivalents, investments in marketable securities, receivables from collaborations, accounts payable and accrued expenses are considered to be representative of their respective fair values due to their short-term natures and, in the case of investments in marketable securities, their market interest rates. Likewise, the carrying amounts of the Company’s long-term debts are considered to be representative of their fair value due to their respective market interest rates. | |||||||||||||
The Company follows ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, for application to financial assets. ASC 820 defines fair value, provides a consistent framework for measuring fair value under GAAP and requires fair value financial statement disclosures. ASC 820 applies only to the measurement and disclosure of financial assets that are required or permitted to be measured and reported at fair value under other ASC topics (except for standards that relate to share-based payments such as ASC Topic 718, Compensation—Stock Compensation). | |||||||||||||
The valuation techniques required by ASC 820 may be based on either observable or unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, and unobservable inputs reflect the Company’s market assumptions. These inputs are classified into the following hierarchy: | |||||||||||||
Level 1 Inputs—quoted prices (unadjusted) in active markets for identical assets that the reporting entity has the ability to access at the measurement date; | |||||||||||||
Level 2 Inputs—inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly; and | |||||||||||||
Level 3 Inputs—unobservable inputs for the assets. | |||||||||||||
The following tables present the Company’s investments in marketable securities (including, if applicable, those classified on the Company’s balance sheet as cash equivalents) that are measured at fair value on a recurring basis as of December 31, 2013 and 2012, respectively: | |||||||||||||
December 31, 2013 | Quoted | Significant | Significant | ||||||||||
Prices in | Other | Unobservable | |||||||||||
Active | Observable | Inputs | |||||||||||
Markets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
(in thousands) | |||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | $ | 37,029 | $ | — | $ | — | |||||||
Corporate debt securities | — | 43,347 | — | ||||||||||
Municipal bonds | — | 3,509 | — | ||||||||||
Certificates of deposit | 5,000 | — | — | ||||||||||
Accrued interest | 407 | — | — | ||||||||||
Total cash equivalents and marketable securities | $ | 42,436 | $ | 46,856 | $ | — | |||||||
December 31, 2012 | Quoted | Significant | Significant | ||||||||||
Prices in | Other | Unobservable | |||||||||||
Active | Observable | Inputs | |||||||||||
Markets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
(in thousands) | |||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | $ | 46,371 | $ | — | $ | — | |||||||
Corporate debt securities | — | 47,173 | — | ||||||||||
Municipal bonds | — | 2,700 | — | ||||||||||
Certificates of deposit | 10,000 | — | — | ||||||||||
Accrued interest | 443 | — | — | ||||||||||
Total cash equivalents and marketable securities | $ | 56,814 | $ | 49,873 | $ | — | |||||||
Corporate debt securities and municipal bonds are valued based on various observable inputs such as benchmark yields, reported trades, broker/dealer quotes, benchmark securities and bids. | |||||||||||||
Accumulated Other Comprehensive Income or Loss | ' | ||||||||||||
Accumulated Other Comprehensive Income or Loss | |||||||||||||
Accumulated other comprehensive income or loss, as presented in stockholders’ equity on the Company’s balance sheet, reflects the cumulative net unrealized gains or losses on available-for-sale securities for all periods. The table below reflects changes in accumulated other comprehensive income for the year ended December 31, 2013, in thousands. | |||||||||||||
Accumulated other comprehensive income, January 1, 2013 | $ | 201 | |||||||||||
Unrealized loss on available-for-sale securities, net | (34 | ) | |||||||||||
Net realized gains on available-for sale securities reclassified out of other comprehensive income | (87 | ) | |||||||||||
Income taxes | 7 | ||||||||||||
Accumulated other comprehensive income, December 31, 2013 | $ | 87 | |||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Calculations of Basic EPS and Diluted EPS | ' | ||||||||||||
The calculations of Basic EPS and Diluted EPS are set forth in the table below (in thousands, except share and per share amounts): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic and diluted: | |||||||||||||
Net loss | $ | (46,705 | ) | $ | (6,998 | ) | $ | (8,529 | ) | ||||
Weighted average common shares—basic and diluted | 33,640,323 | 33,476,316 | 31,637,283 | ||||||||||
Basic and diluted EPS | $ | (1.39 | ) | $ | (0.21 | ) | $ | (0.27 | ) | ||||
Investments In Marketable Securities Measured at Fair Value On a Recurring Basis | ' | ||||||||||||
The following tables present the Company’s investments in marketable securities (including, if applicable, those classified on the Company’s balance sheet as cash equivalents) that are measured at fair value on a recurring basis as of December 31, 2013 and 2012, respectively: | |||||||||||||
December 31, 2013 | Quoted | Significant | Significant | ||||||||||
Prices in | Other | Unobservable | |||||||||||
Active | Observable | Inputs | |||||||||||
Markets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
(in thousands) | |||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | $ | 37,029 | $ | — | $ | — | |||||||
Corporate debt securities | — | 43,347 | — | ||||||||||
Municipal bonds | — | 3,509 | — | ||||||||||
Certificates of deposit | 5,000 | — | — | ||||||||||
Accrued interest | 407 | — | — | ||||||||||
Total cash equivalents and marketable securities | $ | 42,436 | $ | 46,856 | $ | — | |||||||
December 31, 2012 | Quoted | Significant | Significant | ||||||||||
Prices in | Other | Unobservable | |||||||||||
Active | Observable | Inputs | |||||||||||
Markets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
(in thousands) | |||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | $ | 46,371 | $ | — | $ | — | |||||||
Corporate debt securities | — | 47,173 | — | ||||||||||
Municipal bonds | — | 2,700 | — | ||||||||||
Certificates of deposit | 10,000 | — | — | ||||||||||
Accrued interest | 443 | — | — | ||||||||||
Total cash equivalents and marketable securities | $ | 56,814 | $ | 49,873 | $ | — | |||||||
Changes in Accumulated Other Comprehensive Income or Loss | ' | ||||||||||||
The table below reflects changes in accumulated other comprehensive income for the year ended December 31, 2013, in thousands. | |||||||||||||
Accumulated other comprehensive income, January 1, 2013 | $ | 201 | |||||||||||
Unrealized loss on available-for-sale securities, net | (34 | ) | |||||||||||
Net realized gains on available-for sale securities reclassified out of other comprehensive income | (87 | ) | |||||||||||
Income taxes | 7 | ||||||||||||
Accumulated other comprehensive income, December 31, 2013 | $ | 87 | |||||||||||
Investments_in_Marketable_Secu1
Investments in Marketable Securities (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Reconciliation of Amortized Cost to Fair Value of Available-For-Sale Marketable Securities | ' | ||||||||||||||||
The following is a reconciliation of amortized cost to fair value of available-for-sale marketable securities (including those classified on the Company’s balance sheet as cash equivalents) held at December 31, 2013 and 2012: | |||||||||||||||||
December 31, 2013 | Amortized | Gross | Gross | Fair Value | |||||||||||||
Cost | Unrealized | Unrealized | |||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Security type | |||||||||||||||||
Cash Equivalents | |||||||||||||||||
Corporate debt securities | $ | — | $ | — | $ | — | $ | — | |||||||||
Marketable Securities—Short term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 16,352 | 39 | — | 16,391 | |||||||||||||
Corporate debt securities | 14,307 | 35 | — | 14,342 | |||||||||||||
Municipal Bonds | 1,910 | 3 | — | 1,913 | |||||||||||||
Certificates of deposit | 5,000 | — | — | 5,000 | |||||||||||||
Accrued interest | 198 | — | — | 198 | |||||||||||||
Marketable Securities—Long term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 20,628 | 14 | (4 | ) | 20,638 | ||||||||||||
Corporate debt securities—long term | 28,909 | 101 | (5 | ) | 29,005 | ||||||||||||
Municipal Bonds | 1,598 | 4 | (6 | ) | 1,596 | ||||||||||||
Accrued interest | 209 | — | — | 209 | |||||||||||||
Total available-for-sale marketable securities | $ | 89,111 | $ | 196 | $ | (15 | ) | $ | 89,292 | ||||||||
December 31, 2012 | Amortized | Gross | Gross | Fair Value | |||||||||||||
Cost | Unrealized | Unrealized | |||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Security type | |||||||||||||||||
Cash Equivalents | |||||||||||||||||
Corporate debt securities | $ | 4,000 | $ | — | $ | — | $ | 4,000 | |||||||||
Marketable Securities—Short term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 25,412 | 27 | — | 25,439 | |||||||||||||
Corporate debt securities | 7,193 | 16 | — | 7,209 | |||||||||||||
Certificates of deposit | 10,000 | — | — | 10,000 | |||||||||||||
Accrued interest | 73 | — | — | 73 | |||||||||||||
Marketable Securities—Long term | |||||||||||||||||
U.S. Treasury and U.S. or state government agency-backed securities | 20,846 | 86 | — | 20,932 | |||||||||||||
Corporate debt securities—long term | 35,802 | 177 | (15 | ) | 35,964 | ||||||||||||
Municipal Bonds | 2,689 | 11 | — | 2,700 | |||||||||||||
Accrued interest | 370 | — | — | 370 | |||||||||||||
Total available-for-sale marketable securities | $ | 106,385 | $ | 317 | $ | (15 | ) | $ | 106,687 | ||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property and Equipment | ' | ||||||||
As of the respective dates shown, property and equipment consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Equipment | $ | 165 | $ | 2,628 | |||||
Office furniture and fixtures | 2,373 | 2,880 | |||||||
Leasehold improvements | 22 | — | |||||||
2,560 | 5,508 | ||||||||
Less: accumulated depreciation | (1,878 | ) | (3,869 | ) | |||||
Property and equipment, net | $ | 682 | $ | 1,639 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Intangible Assets | ' | ||||||||
As of the respective dates shown, intangible assets consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Patents | $ | 296 | $ | 296 | |||||
Less: accumulated amortization | (199 | ) | (181 | ) | |||||
Total | $ | 97 | $ | 115 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Expenses | ' | ||||||||
As of the respective dates shown, accrued expenses consisted of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Clinical trial and nonclinical study costs | $ | 7,578 | $ | 5,232 | |||||
Employee compensation | 1,200 | 797 | |||||||
Other | 52 | 56 | |||||||
Total | $ | 8,830 | $ | 6,085 | |||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Maturities of Long-Term Debt | ' | ||||
Future scheduled maturities of long-term debt were as follows at December 31, 2013 (in thousands): | |||||
2014 | $ | 853 | |||
2015 | 283 | ||||
2016 and thereafter | — | ||||
$ | 1,136 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Company's Income Tax Expense (Benefit) | ' | ||||||||||||
For the years shown, components of the Company’s income tax expense (benefit) were as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(in thousands) | |||||||||||||
Current: | |||||||||||||
Federal | $ | — | $ | — | $ | — | |||||||
State | — | — | — | ||||||||||
Net current income tax (benefit) expense | — | — | — | ||||||||||
Deferred: | |||||||||||||
Federal | (18,076 | ) | (1,128 | ) | (6,147 | ) | |||||||
State | 1,010 | (718 | ) | (1,095 | ) | ||||||||
Valuation allowance | 17,073 | 1,745 | 7,242 | ||||||||||
Net deferred income tax expense (benefit) | 7 | (101 | ) | — | |||||||||
Net income tax expense (benefit) | $ | 7 | $ | (101 | ) | $ | — | ||||||
Reconciliation of Federal Income Tax Rate to Company's Effective Tax Rate | ' | ||||||||||||
The following is a reconciliation from the federal income tax rate to the Company’s effective tax rate. | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected federal income tax benefit/expense at statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Increase (decrease) resulting from: | |||||||||||||
Research and development credits | 4 | — | 19 | ||||||||||
Stock-based compensation | (1 | ) | (15 | ) | (13 | ) | |||||||
State income tax expense, net of federal benefit | 4 | 2 | 3 | ||||||||||
Change in state rates | (6 | ) | — | — | |||||||||
Change in unrecognized tax benefit reserves | — | — | — | ||||||||||
Change in valuation allowance | (37 | ) | (25 | ) | (85 | ) | |||||||
Other | — | 4 | 41 | ||||||||||
(1 | )% | 1 | % | — | % | ||||||||
Components of the Company's Deferred Tax Assets (Liabilities) | ' | ||||||||||||
As of the respective dates shown, significant components of the Company’s deferred tax assets (liabilities) were as follows: | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
(in thousands) | |||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforward | $ | 81,183 | $ | 65,935 | |||||||||
Research and development tax credit | 12,044 | 10,033 | |||||||||||
Stock-based compensation | 6,498 | 5,260 | |||||||||||
Patents | 1,641 | 1,798 | |||||||||||
Collaboration revenue | — | 1,341 | |||||||||||
Other | 36 | 94 | |||||||||||
Total gross deferred tax assets | 101,402 | 84,461 | |||||||||||
Valuation allowance | (101,211 | ) | (84,101 | ) | |||||||||
Net deferred tax asset | 191 | 360 | |||||||||||
Deferred tax liabilities | |||||||||||||
Equipment and other | (191 | ) | (360 | ) | |||||||||
Net deferred tax asset | $ | — | $ | — | |||||||||
Reconciliation of Beginning and Ending Unrecognized Tax Benefits | ' | ||||||||||||
A reconciliation of beginning and ending unrecognized tax benefits is as follows (in thousands). | |||||||||||||
Balance at January 1, 2011 | $ | 1,474 | |||||||||||
Additions (decreases) based on tax positions related to current and prior years | — | ||||||||||||
Balance at December 31, 2011 | 1,474 | ||||||||||||
Additions (decreases) based on tax positions related to current and prior years | — | ||||||||||||
Balance at December 31, 2012 | 1,474 | ||||||||||||
Additions (decreases) based on tax positions related to current and prior years | 2 | ||||||||||||
Balance at December 31, 2013 | $ | 1,476 | |||||||||||
StockBased_Incentive_Plans_Tab
Stock-Based Incentive Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Weighted Average Assumptions of Stock Options Granted | ' | ||||||||||||||||
The following table illustrates the weighted average assumptions for the Black-Scholes-Merton model used in determining the fair value of stock options granted as of the respective dates shown: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Dividend yield | — | — | — | ||||||||||||||
Risk-free interest rate | 1.1 | % | 1 | % | 2.5 | % | |||||||||||
Volatility | 82 | % | 69 | % | 67 | % | |||||||||||
Expected term | 5.73 years | 6.16 years | 6.00 years | ||||||||||||||
Summary of Option Activity | ' | ||||||||||||||||
A summary of option activity and changes during the year ended December 31, 2013 appears below. | |||||||||||||||||
Shares | Weighted | Weighted | Aggregate | ||||||||||||||
Subject to | Average | Average | Intrinsic | ||||||||||||||
Options | Exercise Price | Remaining | Value | ||||||||||||||
Per Share | Contractual | ||||||||||||||||
Term | |||||||||||||||||
(in thousands) | |||||||||||||||||
Outstanding at January 1, 2013 | 4,369,804 | $ | 10.84 | ||||||||||||||
Granted | 926,650 | 4.95 | |||||||||||||||
Forfeited | (653,728 | ) | 10.12 | ||||||||||||||
Exercised | (103,098 | ) | 2.89 | ||||||||||||||
Outstanding at December 31, 2013 | 4,539,628 | $ | 9.93 | 5.48 | $ | 372,288 | |||||||||||
Vested and exercisable at December 31, 2013 | 3,181,974 | $ | 11.54 | 4.05 years | $ | 372,288 | |||||||||||
Summary of Non-Vested Stock Options | ' | ||||||||||||||||
A summary of the status of non-vested stock options outstanding as of December 31, 2013 and changes during the year ended December 31, 2013 appears below. | |||||||||||||||||
Shares | Weighted Average | ||||||||||||||||
Subject to | Grant-Date Fair | ||||||||||||||||
Options | Value Per Share | ||||||||||||||||
Non-vested at January 1, 2013 | 1,567,570 | $ | 5.84 | ||||||||||||||
Granted | 926,650 | 3.38 | |||||||||||||||
Vested | (803,484 | ) | 6.45 | ||||||||||||||
Forfeited | (333,082 | ) | 4.92 | ||||||||||||||
Non-vested at December 31, 2013 | 1,357,654 | $ | 4.04 | ||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Expected Future Lease Payments Under All Operating Leases | ' | ||||
The following table illustrates expected future lease payments under all operating leases (in thousands): | |||||
2014 | $ | 492 | |||
2015 | 327 | ||||
2016 | |||||
2017 and thereafter | — | ||||
$ | 819 | ||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Data | ' | ||||||||||||||||
2013 Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Net operating revenues | $ | 3,536 | $ | — | $ | — | $ | 93 | |||||||||
Loss from operations | (8,274 | ) | (12,488 | ) | (13,146 | ) | (13,308 | ) | |||||||||
Net loss | (8,066 | ) | (12,371 | ) | (12,902 | ) | (13,366 | ) | |||||||||
Basic net loss per share(1) | $ | (0.24 | ) | $ | (0.37 | ) | $ | (0.38 | ) | $ | (0.40 | ) | |||||
Weighted average common shares outstanding—basic and diluted(2) | 33,616,342 | 33,626,980 | 33,644,256 | 33,673,047 | |||||||||||||
2012 Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Net operating revenues | $ | 22,857 | $ | 33,645 | $ | 768 | $ | 590 | |||||||||
Income (loss) from operations | 1,986 | 14,234 | (8,098 | ) | (16,260 | ) | |||||||||||
Net income (loss) | 2,259 | 14,492 | (7,879 | ) | (15,870 | ) | |||||||||||
Basic net income (loss) per share(1) | $ | 0.07 | $ | 0.43 | $ | (0.24 | ) | $ | (0.47 | ) | |||||||
Diluted net income (loss) per share(1) | $ | 0.07 | $ | 0.43 | $ | (0.24 | ) | $ | (0.47 | ) | |||||||
Weighted average common shares outstanding—basic | 33,390,286 | 33,409,341 | 33,494,106 | 33,609,867 | |||||||||||||
Weighted average common shares outstanding—diluted(2) | 33,822,010 | 33,638,629 | 33,494,106 | 33,609,867 | |||||||||||||
-1 | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, the sum of quarterly amounts may not equal the annual amount because of differences in the weighted average common shares outstanding during each period, principally due to the effect of share issuances by the Company during the year. | ||||||||||||||||
-2 | Diluted weighted average common shares outstanding are identical to basic weighted average common shares outstanding and Diluted EPS is identical to Basic EPS for the each quarter of 2013 and for the third and fourth quarters of 2012 because common share equivalents are excluded from the calculations of diluted weighted average common shares outstanding for those quarters, as their effect is antidilutive. |
Company_and_Nature_of_Operatio
Company and Nature of Operations - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Organization and Nature of Operations [Line Items] | ' |
Corporation formed | 7-Mar-97 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2011 | 31-May-11 | |
EquityPlan | |||||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
License fees and milestones from collaborations | $3,536,000 | $57,420,000 | $96,979,000 | ' | ' |
Percent of net operating revenue recognized from collaborative activity | 97.00% | 99.00% | 99.00% | ' | ' |
Equipment sold, book value | 519,000 | 1,534,000 | ' | ' | ' |
Deposits in excess of federally insured limits | 57,485,000 | 87,081,000 | ' | ' | ' |
Shares subject to outstanding stock options | 4,364,064 | 4,250,964 | 3,597,530 | ' | ' |
Common stock shares issued | ' | ' | ' | ' | 3,658,537 |
Additional common stock shares issued | ' | ' | ' | 548,780 | ' |
Net proceeds from public stock offering | ' | ' | 80,840,000 | ' | ' |
Number of stock-based incentive plans | 2 | ' | ' | ' | ' |
Equipment | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Equipment sold, book value | 519,000 | 1,534,000 | ' | ' | ' |
Equipment sold, receivable | $183,000 | $1,046,000 | ' | ' | ' |
Equipment | Minimum | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful life of long lived assets | '3 years | ' | ' | ' | ' |
Equipment | Maximum | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful life of long lived assets | '5 years | ' | ' | ' | ' |
Office furniture and fixtures | ' | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' |
Estimated useful life of long lived assets | '7 years | ' | ' | ' | ' |
Summary_of_Calculations_of_Bas
Summary of Calculations of Basic EPS and Diluted EPS (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Basic and diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Net loss | ($13,366) | ($12,902) | ($12,371) | ($8,066) | ($15,870) | ($7,879) | $14,492 | $2,259 | ($46,705) | ($6,998) | ($8,529) | ||||
Weighted average common shares-basic and diluted | 33,673,047 | [1] | 33,644,256 | [1] | 33,626,980 | [1] | 33,616,342 | [1] | ' | ' | ' | ' | 33,640,323 | 33,476,316 | 31,637,283 |
Basic and diluted EPS | ' | ' | ' | ' | ' | ' | ' | ' | ($1.39) | ($0.21) | ($0.27) | ||||
[1] | Diluted weighted average common shares outstanding are identical to basic weighted average common shares outstanding and Diluted EPS is identical to Basic EPS for the each quarter of 2013 and for the third and fourth quarters of 2012 because common share equivalents are excluded from the calculations of diluted weighted average common shares outstanding for those quarters, as their effect is antidilutive. |
Investments_in_Marketable_Secu2
Investments in Marketable Securities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | $89,292 | $106,687 |
Fair Value, Inputs, Level 1 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | 42,436 | 56,814 |
Fair Value, Inputs, Level 1 | US Treasury and Government | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | 37,029 | 46,371 |
Fair Value, Inputs, Level 1 | Certificates of Deposit | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | 5,000 | 10,000 |
Fair Value, Inputs, Level 1 | Accrued Interest | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | 407 | 443 |
Fair Value, Inputs, Level 2 | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | 46,856 | 49,873 |
Fair Value, Inputs, Level 2 | Corporate Debt Securities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | 43,347 | 47,173 |
Fair Value, Inputs, Level 2 | Municipal Bonds | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash equivalents and marketable securities | $3,509 | $2,700 |
Changes_in_Accumulated_Other_C
Changes in Accumulated Other Comprehensive Income Loss (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' |
Accumulated other comprehensive income, January 1, 2013 | $201 |
Unrealized loss on available-for-sale securities, net | -34 |
Net realized gains on available-for sale securities reclassified out of other comprehensive income | -87 |
Income taxes | 7 |
Accumulated other comprehensive income, December 31, 2013 | $87 |
Investments_in_Marketable_Secu3
Investments in Marketable Securities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | $89,111 | $106,385 |
Gross Unrealized Gains | 196 | 317 |
Gross Unrealized Losses | -15 | -15 |
Fair Value | 89,292 | 106,687 |
Cash Equivalents | Corporate Debt Securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | ' | 4,000 |
Fair Value | ' | 4,000 |
Marketable Securities - Short term | Corporate Debt Securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 14,307 | 7,193 |
Gross Unrealized Gains | 35 | 16 |
Fair Value | 14,342 | 7,209 |
Marketable Securities - Short term | US Treasury and Government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 16,352 | 25,412 |
Gross Unrealized Gains | 39 | 27 |
Fair Value | 16,391 | 25,439 |
Marketable Securities - Short term | Certificates of Deposit | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 5,000 | 10,000 |
Fair Value | 5,000 | 10,000 |
Marketable Securities - Short term | Municipal Bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 1,910 | ' |
Gross Unrealized Gains | 3 | ' |
Fair Value | 1,913 | ' |
Marketable Securities - Short term | Accrued Interest | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 198 | 73 |
Fair Value | 198 | 73 |
Marketable Securities - Long term | Corporate Debt Securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 28,909 | 35,802 |
Gross Unrealized Gains | 101 | 177 |
Gross Unrealized Losses | -5 | -15 |
Fair Value | 29,005 | 35,964 |
Marketable Securities - Long term | US Treasury and Government | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 20,628 | 20,846 |
Gross Unrealized Gains | 14 | 86 |
Gross Unrealized Losses | -4 | ' |
Fair Value | 20,638 | 20,932 |
Marketable Securities - Long term | Municipal Bonds | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 1,598 | 2,689 |
Gross Unrealized Gains | 4 | 11 |
Gross Unrealized Losses | -6 | ' |
Fair Value | 1,596 | 2,700 |
Marketable Securities - Long term | Accrued Interest | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Amortized Cost | 209 | 370 |
Fair Value | $209 | $370 |
Investments_in_Marketable_Secu4
Investments in Marketable Securities - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Investment [Line Items] | ' | ' |
Unrealized gains on marketable securities | $196,000 | $317,000 |
Unrealized losses on marketable securities | $15,000 | ' |
Maturity date of investments in marketable securities, range start | 23-Jan-14 | ' |
Maturity date of investments in marketable securities, range end | 12-Dec-16 | ' |
Weighted average maturity date | 29-Jan-15 | ' |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $2,560 | $5,508 |
Less: accumulated depreciation | -1,878 | -3,869 |
Property and equipment, net | 682 | 1,639 |
Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 165 | 2,628 |
Office Furniture and Fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | 2,373 | 2,880 |
Leasehold Improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Gross | $22 | ' |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation expense | $505,000 | $2,195,000 | $2,463,000 |
Sale of office property and equipment | 519,000 | 1,534,000 | ' |
Gain (Loss) on sale of property and equipment | ($213,000) | $55,000 | ' |
Intangible_Assets_Detail
Intangible Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Patents | $296 | $296 |
Less: accumulated amortization | -199 | -181 |
Total | $97 | $115 |
Intangible_Assets_Additional_I
Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Finite Lived Intangible Assets Future Amortization Expense [Line Items] | ' | ' |
Patents | $296,000 | $296,000 |
Finite lived intangible assets prospective amortization per year | $17,000 | ' |
Number of years assets to be amortized | '17 years | ' |
Accrued_Expenses_Detail
Accrued Expenses (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities [Line Items] | ' | ' |
Clinical trial and nonclinical study costs | $7,578 | $5,232 |
Employee compensation | 1,200 | 797 |
Other | 52 | 56 |
Total | $8,830 | $6,085 |
Longterm_Debt_Additional_Infor
Long-term Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||
Mar. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 31, 2010 | Mar. 31, 2008 | Jun. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2008 | Mar. 31, 2008 | |
Loan Agreement | Loan Agreement | Bank Term Loan | Bank Term Loan | Bank Term Loan | Bank Term Loan | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate borrowing capacity | ' | ' | ' | ' | $4,000,000 | $5,300,000 | ' | ' | ' | ' |
Bank loan | ' | ' | ' | ' | ' | ' | 2,132,000 | 1,228,000 | 489,000 | 4,811,000 |
Interest on borrowings | ' | ' | ' | ' | ' | ' | 3.47% | 3.40% | 6.13% | 5.23% |
Monthly installment | ' | ' | ' | ' | ' | ' | 48,000 | 28,000 | 11,000 | 112,000 |
Installment start date | ' | ' | ' | ' | ' | ' | 1-Jul-11 | 1-Jan-11 | 1-Oct-08 | 1-Apr-08 |
Installment end date | ' | ' | ' | ' | ' | ' | 1-Jun-15 | 1-Dec-14 | 1-Sep-12 | 1-Mar-12 |
Repayments of other debt | 1,679,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest paid under notes payable | ' | $56,000 | $91,000 | $134,000 | ' | ' | ' | ' | ' | ' |
Maturities_of_Longterm_Debt_De
Maturities of Long-term Debt (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Debt Instrument [Line Items] | ' |
2014 | $853 |
2015 | 283 |
2016 | ' |
Long-term Debt, Total | $1,136 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax [Line Items] | ' | ' | ' |
Income tax expense recognized | $7,000 | ($101,000) | $0 |
Income tax benefit, available for sale securities | -7,000 | ' | ' |
Research and development carryforwards | 12,044,000 | 10,033,000 | ' |
Deferred tax assets valuation allowance increase (Decrease) | 17,110,000 | 1,745,000 | 7,242,000 |
Cumulative tax deductions for periods of net loss from exercises of stock options | 7,551,000 | ' | ' |
Recognized interest and penalty related to unrecognized tax benefit | 0 | 0 | 0 |
Federal Income Tax | ' | ' | ' |
Income Tax [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 233,170,000 | 187,752,000 | 135,860,000 |
Research and development carryforwards | 12,773,000 | 10,762,000 | 10,778,000 |
Net operating loss carry forwards expire period | '2024 | ' | ' |
Research and development tax credit carryforward expiration period | '2021 | ' | ' |
State Income Tax Credits | ' | ' | ' |
Income Tax [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 219,792,000 | 176,296,000 | 134,470,000 |
Research and development carryforwards | $587,000 | $587,000 | $587,000 |
Net operating loss carry forwards expire period | '2019 | ' | ' |
Research and development tax credit carryforward expiration period | '2021 | ' | ' |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Benefit) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current: | ' | ' | ' |
Federal | ' | ' | ' |
State | ' | ' | ' |
Net current income tax (benefit) expense | ' | ' | ' |
Deferred: | ' | ' | ' |
Federal | -18,076 | -1,128 | -6,147 |
State | 1,010 | -718 | -1,095 |
Valuation allowance | 17,073 | 1,745 | 7,242 |
Net deferred income tax expense (benefit) | 7 | -101 | ' |
Net income tax expense (benefit) | $7 | ($101) | $0 |
Reconciliation_of_Federal_Inco
Reconciliation of Federal Income Tax Rate to Company's Effective Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Examination [Line Items] | ' | ' | ' |
Expected federal income tax benefit/expense at statutory rate | 35.00% | 35.00% | 35.00% |
Increase (decrease) resulting from: | ' | ' | ' |
Research and development credits | 4.00% | ' | 19.00% |
Stock-based compensation | -1.00% | -15.00% | -13.00% |
State income tax expense, net of federal benefit | 4.00% | 2.00% | 3.00% |
Change in state rates | -6.00% | ' | ' |
Change in unrecognized tax benefit reserves | ' | ' | ' |
Change in valuation allowance | -37.00% | -25.00% | -85.00% |
Other | ' | 4.00% | 41.00% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent, Total | -1.00% | 1.00% | ' |
Components_of_Companys_Deferre
Components of Company's Deferred Tax Assets (Liabilities) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Net operating loss carryforward | $81,183 | $65,935 |
Research and development tax credit | 12,044 | 10,033 |
Stock-based compensation | 6,498 | 5,260 |
Patents | 1,641 | 1,798 |
Collaboration revenue | ' | 1,341 |
Other | 36 | 94 |
Total gross deferred tax assets | 101,402 | 84,461 |
Valuation allowance | -101,211 | -84,101 |
Net deferred tax asset | 191 | 360 |
Deferred tax liabilities | ' | ' |
Equipment and other | -191 | -360 |
Net deferred tax asset | ' | ' |
Reconciliation_of_Beginning_an
Reconciliation of Beginning and Ending Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 |
Reconciliation of Unrecognized Tax Benefits [Line Items] | ' | ' | ' |
Beginning Balance | $1,474 | $1,474 | $1,474 |
Additions (decreases) based on tax positions related to current and prior years | 2 | ' | ' |
Ending Balance | $1,476 | $1,474 | $1,474 |
StockBased_Incentive_Plans_Add
Stock-Based Incentive Plans - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jan. 23, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | |
Chief Executive Officer | Subsequent Event | Two Thousand And Six Plan | Two Thousand And Six Plan | Two Thousand And Six Plan | Two Thousand And Six Plan | Two Thousand And Six Plan | |||
Employee Stock Option | Minimum | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock authorized for issuance | ' | ' | ' | ' | 7,821,554 | ' | ' | ' | ' |
Common stock available for grant | ' | ' | ' | ' | 3,281,926 | ' | ' | ' | ' |
Stock options vesting period | ' | ' | ' | '5 years 3 months 29 days | ' | ' | ' | '0 years | '5 years |
Contractual term of stock | ' | ' | ' | ' | '10 years | ' | '10 years | ' | ' |
Exercise price as a percentage of the fair market value of the common stock | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' |
Number of common stock shares available to purchase under nonqualified option plan | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' |
Incremental compensation costs as a result of modifications | ' | ' | ' | ' | $573,000 | $1,397,000 | ' | ' | ' |
Weighted average grant date fair value | ' | ' | ' | ' | $3.38 | $2.98 | $15.87 | ' | ' |
Intrinsic value of options | ' | ' | ' | ' | 200,000 | 472,000 | 6,082,000 | ' | ' |
Options expired | ' | ' | ' | ' | ' | ' | 176,102 | ' | ' |
Unrecognized compensation expense | ' | ' | ' | ' | 5,491,000 | ' | ' | ' | ' |
Unrecognized compensation cost, recognition period | ' | ' | ' | ' | '2 years 9 months 29 days | ' | ' | ' | ' |
Fair value of shares vested under 2006 plans | ' | ' | ' | ' | $5,140,000 | $7,836,000 | $8,481,000 | ' | ' |
Stock reserved for future issuance | 4,539,337 | 4,369,804 | ' | ' | ' | ' | ' | ' | ' |
Options granted | 926,650 | ' | ' | 834,618 | ' | ' | ' | ' | ' |
Stock options vesting period, beginning date | ' | ' | ' | 31-Mar-14 | ' | ' | ' | ' | ' |
Summary_of_Weighted_Average_As
Summary of Weighted Average Assumptions of Stock Options Granted (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share based Compensation Arrangement Assumptions Used to Estimate Fair Values of Share Options Granted [Line Items] | ' | ' | ' |
Dividend yield | ' | ' | ' |
Risk-free interest rate | 1.10% | 1.00% | 2.50% |
Volatility | 82.00% | 69.00% | 67.00% |
Expected term | '5 years 8 months 23 days | '6 years 1 month 28 days | '6 years |
Summary_of_Option_Activity_Det
Summary of Option Activity (Detail) (USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 |
Shares | ' |
Shares, Beginning Balance | 4,369,804 |
Granted | 926,650 |
Forfeited | -653,728 |
Exercised | -103,098 |
Shares, Ending Balance | 4,539,628 |
Vested and exercisable at December 31, 2013 | 3,181,974 |
Weighted Average Exercise Price Per Share | ' |
Weighted Average Exercise Price Per Share, Beginning Balance | $10.84 |
Granted | $4.95 |
Forfeited | $10.12 |
Exercised | $2.89 |
Weighted Average Exercise Price Per Share, Ending Balance | $9.93 |
Vested and exercisable at December 31, 2013 | $11.54 |
Outstanding at December 31, 2013 | '5 years 5 months 23 days |
Vested and exercisable at December 31, 2013 | '4 years 18 days |
Outstanding at December 31, 2013 | $372,288 |
Vested and exercisable at December 31, 2013 | $372,288 |
Summary_of_Nonvested_Stock_Opt
Summary of Nonvested Stock Options (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Non-vested at January 1, 2013 | 1,567,570 |
Granted | 926,650 |
Vested | -803,484 |
Forfeited | -333,082 |
Non-vested at December 31, 2013 | 1,357,654 |
Weighted Average Grant-Date Fair Value Per Share | ' |
Non-vested at January 1, 2013 | $5.84 |
Granted | $3.38 |
Vested | $6.45 |
Forfeited | $4.92 |
Non-vested at December 31, 2013 | $4.04 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
Dec. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
sqft | ||||
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Subleased office area | 18,282 | ' | ' | ' |
Sublease agreement entry date | 1-Jan-13 | ' | ' | ' |
Sublease agreement end date | 30-Dec-15 | ' | ' | ' |
Monthly rent payable on sublease | $22,000 | ' | ' | ' |
Annual percentage increases in monthly rental payment | 3.00% | ' | ' | ' |
Operating lease rent expense | ' | $582,000 | $2,819,000 | $2,575,000 |
Minimum | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Severance period for executive officers | ' | '9 months | ' | ' |
Maximum | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Severance period for executive officers | ' | '18 months | ' | ' |
Expected_Future_Lease_Payments
Expected Future Lease Payments Under Operating Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Loss Contingencies [Line Items] | ' |
2014 | $492 |
2015 | 327 |
2016 | ' |
2017 and thereafter | ' |
Operating Leases, Future Minimum Payments Due, Total | $819 |
Retirement_Savings_Plan_Additi
Retirement Savings Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' |
Employer contribution under 401(k) retirement plan | $275,000 | $454,000 | $535,000 |
Maximum percentage of employee gross pay that the employer may contribute | 4.00% | 4.00% | 4.00% |
Strategic_Alliance_and_Collabo1
Strategic Alliance and Collaboration Agreements - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 95 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2006 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2011 | Sep. 30, 2011 | Oct. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Feb. 28, 2011 | Dec. 31, 2007 | Mar. 31, 2011 | Jul. 27, 2007 | |
TC - 5214 | TC - 5214 | TC - 5214 | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | AstraZeneca | Parent Company | University Of South Florida Research Foundation | GlaxoSmithKline | GlaxoSmithKline | GlaxoSmithKline | ||||
TC - 5214 | TC - 5214 | TC - 5214 | TC - 5214 | Accelerated Portion | Clinical Trial TC-1734 | Clinical Trial TC-1734 | Clinical Trial TC-1734 | Clinical Trial TC-1734 | Clinical Trial TC-1734 | Clinical Trial TC-1734 | Development Milestone Events | Development Milestone Events | Development Milestone Events | Regulatory Milestone Events | Regulatory Milestone Events | First Commercial Sale Milestone Events | First Commercial Sale Milestone Events | Sales Milestone | Other Milestones | TC - 5214 | TC - 5214 | ||||||||||||
AZD 1446 | AZD 1446 | AZD 1446 | AZD 1446 | AZD 1446 | AZD 1446 | AZD 1446 | AZD 1446 | AZD 1446 | |||||||||||||||||||||||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Maximum | Maximum | ||||||||||||||||||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount received for research and development process | ' | ' | ' | $200,000,000 | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | $3,500,000 | $2,000,000 | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocation of initial fee to research collaboration | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of research collaboration | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '9 years |
Initial fee unrecognized, recognition deferred | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recognized of initial fee as revenue and payments received under amendment | ' | ' | ' | ' | ' | ' | ' | ' | ' | 54,473,000 | 72,565,000 | 72,565,000 | 3,142,000 | ' | ' | ' | 3,536,000 | 2,946,000 | 1,192,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional payments receivable on milestone achievements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | 14,000,000 | 8,000,000 | 10,000,000 | 12,000,000 | 49,000,000 | 30,000,000 | 35,000,000 | ' | ' | ' | ' | ' |
Contingent milestone payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount received for research and development process | ' | ' | ' | ' | ' | ' | ' | 88,120,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue recognition period | ' | ' | ' | '33 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment made to UKRF and USFRF | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,000,000 | ' | ' | ' |
Percentage of development costs, responsible party Rest of World | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage cost of the program attributable to respective party US and Europe | ' | ' | ' | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' |
Initial program cost for research and development | 38,840,000 | 49,087,000 | 95,215,000 | ' | 2,175,000 | 32,046,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocable portion of the program costs | ' | ' | ' | ' | 127,000 | 336,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 |
Common stock purchased by GSK | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,275,502 |
Purchase price of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 |
Aggregate deemed premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,521,000 |
Payment received on achievement of milestone events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' | ' |
Recognition of deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $18,421,000 | ' |
Reduction_In_Force_Additional_
Reduction In Force - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Oct. 08, 2012 | Apr. 25, 2012 | Dec. 31, 2012 |
Person | Person | ||
Special Charges [Line Items] | ' | ' | ' |
Severance and other charges related to the reduction in force | $1,406 | $2,312 | $3,718 |
Number of positions eliminated | 27 | 65 | ' |
Percentage of workforce reduced | 38.00% | 46.00% | ' |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||
Quarterly Financial Data [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||
Net operating revenues | $93 | ' | ' | $3,536 | $590 | $768 | $33,645 | $22,857 | $3,629 | $57,860 | $97,637 | ||||||||
Income (loss) from operations | -13,308 | -13,146 | -12,488 | -8,274 | -16,260 | -8,098 | 14,234 | 1,986 | -47,216 | -8,138 | -9,745 | ||||||||
Net income (loss) | ($13,366) | ($12,902) | ($12,371) | ($8,066) | ($15,870) | ($7,879) | $14,492 | $2,259 | ($46,705) | ($6,998) | ($8,529) | ||||||||
Basic net income (loss) per share | ($0.40) | [1] | ($0.38) | [1] | ($0.37) | [1] | ($0.24) | [1] | ($0.47) | [1] | ($0.24) | [1] | $0.43 | [1] | $0.07 | [1] | ' | ' | ' |
Diluted net income (loss) per share | ' | ' | ' | ' | ($0.47) | [1] | ($0.24) | [1] | $0.43 | [1] | $0.07 | [1] | ' | ' | ' | ||||
Weighted average common shares outstanding-basic and diluted | 33,673,047 | [2] | 33,644,256 | [2] | 33,626,980 | [2] | 33,616,342 | [2] | ' | ' | ' | ' | 33,640,323 | 33,476,316 | 31,637,283 | ||||
Weighted average common shares outstanding-basic | ' | ' | ' | ' | 33,609,867 | 33,494,106 | 33,409,341 | 33,390,286 | ' | ' | ' | ||||||||
Weighted average common shares outstanding-diluted | ' | ' | ' | ' | 33,609,867 | [2] | 33,494,106 | [2] | 33,638,629 | [2] | 33,822,010 | [2] | ' | ' | ' | ||||
[1] | Per common share amounts for the quarters and full years have been calculated separately. Accordingly, the sum of quarterly amounts may not equal the annual amount because of differences in the weighted average common shares outstanding during each period, principally due to the effect of share issuances by the Company during the year. | ||||||||||||||||||
[2] | Diluted weighted average common shares outstanding are identical to basic weighted average common shares outstanding and Diluted EPS is identical to Basic EPS for the each quarter of 2013 and for the third and fourth quarters of 2012 because common share equivalents are excluded from the calculations of diluted weighted average common shares outstanding for those quarters, as their effect is antidilutive. |