Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
Entity Information [Line Items] | ||
Entity Registrant Name | NEWLINK GENETICS CORP | |
Entity Central Index Key | 1,126,234 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 28,718,371 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 929,606,561 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 203,377 | $ 190,404 |
Certificates of deposit | 4,202 | 12,393 |
Prepaid expenses | 11,344 | 8,333 |
Income tax receivable | 2,519 | 15,604 |
State research and development credit receivable | 440 | 13 |
Other receivables | 12,570 | 3,716 |
Total current assets | 234,452 | 230,463 |
Leasehold improvements and equipment: | ||
Leasehold improvements | 6,139 | 6,022 |
Computer equipment | 2,220 | 1,399 |
Lab equipment | 4,954 | 4,110 |
Contract manufacturing organization equipment | 1,067 | 1,023 |
Total leasehold improvements and equipment | 14,380 | 12,554 |
Less accumulated depreciation and amortization | (5,582) | (4,955) |
Leasehold improvements and equipment, net | 8,798 | 7,599 |
Total assets | 243,250 | 238,062 |
Current liabilities: | ||
Accounts payable | 1,474 | 2,412 |
Accrued expenses | 5,954 | 9,367 |
Current portion of unearned revenue | 936 | 12,966 |
Current portion of deferred rent | 85 | 84 |
Current portion of obligations under capital leases | 31 | 35 |
Current portion of notes payable | 556 | 157 |
Total current liabilities | 9,036 | 25,021 |
Long-term liabilities: | ||
Royalty obligation payable to Iowa Economic Development Authority | 6,000 | 6,000 |
Notes payable and obligations under capital leases | 450 | 941 |
Unearned revenue | 809 | 1,085 |
Deferred rent | 1,196 | 1,238 |
Total long-term liabilities | 8,455 | 9,264 |
Total liabilities | 17,491 | 34,285 |
Stockholders' Equity: | ||
Blank check preferred stock, $0.01 par value: Authorized shares — 5,000,000 at June 30, 2015 and December 31, 2014; issued and outstanding shares — 0 at June 30, 2015 and December 31, 2014 | 0 | 0 |
Common stock, $0.01 par value: Authorized shares — 75,000,000 at June 30, 2015 and December 31, 2014; issued 28,679,388 and 27,991,242 at June 30, 2015 and December 31, 2014, respectively, and outstanding 28,661,588 and 27,980,849 at June 30, 2015 and December 31, 2014, respectively | 287 | 280 |
Additional paid-in capital | 262,055 | 236,838 |
Treasury stock, at cost: 17,800 and 10,393 shares at June 30, 2015 and December 31, 2014, respectively | (551) | (222) |
Accumulated deficit | (36,032) | (33,119) |
Total stockholders' equity | 225,759 | 203,777 |
Total liabilities and stockholders' equity | $ 243,250 | $ 238,062 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' Equity: | ||
Blank check preferred stock, par value | $ 0.01 | $ 0.01 |
Blank check preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Blank check preferred stock, issued shares | 0 | 0 |
Blank check preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 75,000,000 | 75,000,000 |
Common stock, issued shares | 28,679,388 | 27,991,242 |
Common stock, outstanding shares | 28,661,588 | 27,980,849 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Grant revenue | $ 3,280,000 | $ 212,000 | $ 12,929,000 | $ 546,000 |
Licensing and collaboration revenue | 4,165,000 | 0 | 33,711,000 | 0 |
Revenues | 7,445,000 | 212,000 | 46,640,000 | 546,000 |
Operating expenses: | ||||
Research and development | 16,130,000 | 6,475,000 | 34,111,000 | 12,863,000 |
General and administrative | 7,257,000 | 2,863,000 | 15,623,000 | 6,114,000 |
Total operating expenses | 23,387,000 | 9,338,000 | 49,734,000 | 18,977,000 |
Loss from operations | (15,942,000) | (9,126,000) | (3,094,000) | (18,431,000) |
Other income and expense: | ||||
Miscellaneous income | 0 | (50,000) | 0 | 0 |
Interest income | 26,000 | 21,000 | 43,000 | 45,000 |
Interest expense | (4,000) | (9,000) | (10,000) | (13,000) |
Other (expense) income, net | 22,000 | (38,000) | 33,000 | 32,000 |
Net loss before taxes | (15,920,000) | (9,164,000) | (3,061,000) | (18,399,000) |
Income tax benefit | 1,829,000 | 0 | 160,000 | 0 |
Net loss | $ (14,091,000) | $ (9,164,000) | $ (2,901,000) | $ (18,399,000) |
Basic and diluted net loss per share | $ (0.49) | $ (0.33) | $ (0.10) | $ (0.66) |
Basic and diluted average shares outstanding | 28,661,588 | 27,876,652 | 28,408,474 | 27,742,029 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Deficit [Member] |
Balance at Dec. 31, 2014 | $ 203,777 | $ 280 | $ 236,838 | $ (222) | $ (33,119) |
Balance (shares) at Dec. 31, 2014 | 27,980,849 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | $ 9,121 | 9,121 | |||
Exercise of stock options | $ 2,168 | 4 | 2,164 | ||
Exercise of stock options (shares) | 333,508 | ||||
Sale of shares under stock purchase plan | $ 0 | 401 | |||
Sale of shares under stock purchase plan (shares) | 18,988 | ||||
Issuance of common stock under the ATM offering (net of offering costs of $692) | $ 13,534 | 3 | 13,531 | ||
Issuance of common stock under the ATM offering (net of offering costs of $692) (shares) | 329,402 | ||||
Shares withheld for statutory tax withholding | $ (341) | (341) | |||
Shares withheld for statutory tax withholding (shares) | (1,701) | ||||
Issuance of common stock from treasury | $ 0 | 12 | (12) | ||
Treasury Stock, Shares, Retired | 542 | ||||
Net loss | $ (2,901) | (2,901) | |||
Balance at Jun. 30, 2015 | $ 225,759 | $ 287 | $ 262,055 | $ 551 | $ (36,032) |
Balance (shares) at Jun. 30, 2015 | 28,661,588 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Development Activities | ||
Net loss | $ (2,901) | $ (18,399) |
Adjustments to reconcile net loss to net cash used in development activities: | ||
Share-based compensation | 9,121 | 3,604 |
Depreciation and amortization | 627 | 517 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (3,011) | 327 |
State research and development credit receivable | (427) | (168) |
Other receivables | (8,852) | 1,167 |
Accounts payable and accrued expenses | (4,007) | 16 |
Income taxes receivable | 13,085 | (125) |
Unearned revenue | (12,305) | 0 |
Deferred rent | (41) | (42) |
Net cash used in operating activities | (8,711) | (13,103) |
Cash Flows From Investing Activities | ||
Maturity of certificates of deposit | 8,191 | 0 |
Purchase of equipment | (2,173) | (297) |
Net cash used in investing activities | 6,018 | (297) |
Cash Flows From Financing Activities | ||
Issuance of common stock, net of offering costs | 16,103 | 29,247 |
Repurchase of common stock | (341) | (182) |
Principal payments on debt | (78) | (77) |
Payments under capital lease obligations | (18) | (18) |
Net cash provided by financing activities | 15,666 | 28,970 |
Net (decrease) increase in cash and cash equivalents | 12,973 | 15,570 |
Cash and cash equivalents at beginning of period | 190,404 | 61,291 |
Cash and cash equivalents at end of period | 203,377 | 76,861 |
Supplemental disclosure of cash flows information: | ||
Cash paid for interest | 10 | 13 |
Cash paid for taxes | 255 | 0 |
Noncash financing and investing activities: | ||
Purchased leasehold improvements and equipment in accounts payable | $ 3 | $ 89 |
Description of Business (Notes)
Description of Business (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | D escription of Business On June 4, 1999, NewLink Genetics Corporation (NewLink) was incorporated as a Delaware corporation. NewLink was formed for the purpose of developing treatments for cancer and other diseases. NewLink initiated operations in April 2000. In 2005, NewLink created a partially owned subsidiary, BioProtection Systems Corporation (BPS). NewLink contributed certain licensing agreements and other intangible assets for BPS to create vaccines against potential biological terror threats. On January 7, 2011, NewLink acquired all of the minority interest in BPS by merging a newly formed subsidiary of NewLink with BPS, with BPS as the surviving corporation, resulting in NewLink owning all the outstanding capital stock of BPS. In 2013, NewLink created a wholly-owned subsidiary, NewLink International (NI). NewLink plans to conduct all or a portion of its operations outside of the United States through NI. In 2014, NewLink created another wholly owned subsidiary, NewLink Global (NG), which was subsequently merged into NewLink during 2014. NewLink and its subsidiaries (the Company) are devoting substantially all of their efforts toward research and development. The Company has never earned revenue from commercial sales of its drugs. The Company had a net loss of $14.1 million and $2.9 million for the three and six months ending June 30, 2015 , respectively. For the six months ended June 30, 2015, the Company's loss was lower than the three-month period ending June 30, 2015 primarily as a result of earning a milestone payment during the first quarter of 2015 pursuant to a license and collaboration agreement the Company entered into with Merck, Sharpe and Dohme Corp., or Merck, in 2014. The accompanying financial statements as of June 30, 2015 and for the three and six months then ended have been prepared assuming the Company will continue as a going concern. The Company successfully raised net proceeds of $37.6 million from its IPO, completed a follow-on offering of its common stock raising net proceeds of $49.0 million , and raised an additional $58.7 million in net proceeds from the ATM Offering prior to June 30, 2015 . In connection with two license and collaboration agreements the Company entered into during 2014, the Company received a nonrefundable upfront cash payment of $150.0 million from Genentech Inc., a member of the Roche Group, or Genentech, in 2014, and a nonrefundable upfront cash payment of $30.0 million from Merck in 2014, as well as an additional milestone payment of $20.0 million from Merck in February 2015. The Company's cash and cash equivalents after these agreements and offerings are expected to be adequate to satisfy the Company's liquidity requirements well into 2016, although not through commercialization and launch of revenue-producing products. If available liquidity becomes insufficient to meet the Company’s operating obligations as they come due, the Company's plans include pursuing alternative funding arrangements and/or reducing expenditures as necessary to meet the Company’s cash requirements. However, there is no assurance that, if required, the Company will be able to raise additional capital or reduce discretionary spending to provide the required liquidity. Failure by the Company to successfully execute its plans or otherwise address its liquidity needs may have a material adverse effect on its business and financial position, and may materially affect the Company’s ability to continue as a going concern. |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim financial statements have been prepared and presented by the Company in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and the rules and regulations of the U.S. Securities and Exchange Commission (the SEC), without audit, and, in management’s opinion, reflect all adjustments necessary to present fairly the Company’s interim condensed financial information. Certain information and footnote disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2014 , included in the Company’s Annual Report on Form 10-K. There were no significant changes in the Company’s accounting policies since the end of fiscal 2014 . The financial results for any interim period are not necessarily indicative of financial results for the full year. |
Significant Accounting Policies
Significant Accounting Policies (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies (a) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (b) Principles of Consolidation The consolidated financial statements include the financial statements of NewLink and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Financial Instruments and Concentrations of Credit Risk Cash and cash equivalents, certificates of deposit, receivables, and accounts payable are recorded at cost, which approximates fair value based on the short-term nature of these financial instruments. The fair value and carrying value of notes payable and capital lease obligations was $1.0 million and $1.1 million as of June 30, 2015 and December 31, 2014 , respectively, and was determined using Level 2 inputs. The Company is unable to estimate the fair value of the royalty obligation based on future product sales, as the timing of payments, if any, is uncertain. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and certificates of deposit. Cash and cash equivalents are held by financial institutions and are federally insured up to certain limits. At times, the Company’s cash and cash equivalents balance exceeds the federally insured limits. To limit the credit risk, the Company invests its excess cash primarily in high-quality securities such as certificates of deposit. (d) Recent Accounting Pronouncements On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018; however, early adoption at January 1, 2017, is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method, nor has it determined the effect of the standard on its ongoing financial reporting. |
Long-Term Debt (Notes)
Long-Term Debt (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt March 2010 City of Ames Forgivable Loan In March 2010, the Company entered into a $400,000 forgivable loan agreement with the City of Ames, Iowa and the Ames Chamber of Commerce, jointly, as lenders. The project provides the Company with financial assistance to construct new facilities within the Ames city limits. In the absence of a default, there are no principal or interest payments due until March 31, 2016. The project calls for the Company to create or retain at least 150 full-time positions located in Ames, Iowa. In March 2015, the City of Ames granted a one-year extension for the deadline to obtain the required number of jobs to March 10, 2016. The agreement required the Company to enter into a five -year building lease with the option for extension for an additional five years of not less than 20,000 square feet within the corporate limits of the City of Ames by March 10, 2015, which requirement was met prior to the deadline of March 10, 2015. If, as of March 10, 2016, the Company has fulfilled the terms of the loan agreement, the loan will be forgiven. If on March 10, 2016, the Company has failed to create or retain at least 150 full-time jobs in Ames, Iowa, the Company will be required to repay approximately $3,100 per job not created or retained following such date. As of June 30, 2015 , $397,000 of the total $400,000 forgivable loan was advanced to the Company. As of June 30, 2015, the Company has created or retained at least 150 full-time positions in Ames, Iowa. In the event of default, including failure to repay any amounts under the loan when due, the Company will be required to repay the note, including 6.5% interest per annum, beginning at the date of default. |
Common Stock Equity Incentive P
Common Stock Equity Incentive Plan (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock Equity Incentive Plan | Common Stock Equity Incentive Plan 2009 Equity Incentive Plan In April 2000, the stockholders approved the Company's 2000 Equity Incentive Plan, or the 2000 Plan, and in July 2009, the stockholders approved the Company's 2009 Equity Incentive Plan, or the 2009 Plan. Following the approval of the 2009 Plan, all options outstanding under the 2000 Plan are effectively included under the 2009 Plan. Under the provisions of the 2009 Plan, the Company may grant the following types of common stock awards: • Incentive Stock Options • Nonstatutory Stock Options • Restricted Stock Awards • Stock Appreciation Rights Awards under the 2009 Plan, as amended, may be made to officers, employees, members of the Board of Directors, advisors, and consultants to the Company. As of June 30, 2015 , there were 7,192,547 shares of common stock authorized for the 2009 Plan and 927,421 shares remained available for issuance. On May 15, 2010 and January 7, 2011, stockholders authorized increases of 1,238,095 and 714,286 shares of common stock available for issuance under the 2009 Plan, respectively. On January 1, 2013, 2014 and 2015, an additional 838,375 , 1,066,340 and 1,119,255 shares of common stock were added to the shares reserved for future issuance under the 2009 Plan, respectively, pursuant to an “evergreen provision,” in accordance with which, on January 1 of each year, from 2012 to (and including) 2019, a number of shares of common stock in an amount equal to 4% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or such lesser amount of shares (or no shares) approved by the NewLink Board of Directors, was added or will be added to the shares reserved under the 2009 Plan. 2010 Non-Employee Directors' Stock Award Plan Under the terms of the Company’s 2010 Non-Employee Directors’ Stock Award Plan, or the Directors’ Plan, which became effective on November 10, 2011, 238,095 shares of common stock were reserved for future issuance. On May 9, 2013 , an additional 161,905 shares of common stock were added to the shares reserved for future issuance under the Directors' Plan. As of June 30, 2015 , 131,632 shares remained available for issuance under the plan. 2010 Employee Stock Purchase Plan Under the terms of the Company’s 2010 Employee Stock Purchase Plan, or the 2010 Purchase Plan, which became effective on November 10, 2011, 214,285 shares of common stock were reserved for future issuance. On May 9, 2013 , an additional 185,715 shares of common stock were added to the shares reserved for future issuance under the 2010 Purchase Plan. As of June 30, 2015 , 252,652 shares remained available for issuance under the plan. Share-based Compensation Share-based compensation expense for the three and six months ended June 30, 2015 and June 30, 2014 was $5.9 million , and $9.1 million , $1.5 million , and $3.6 million , respectively, and is allocated between research and development and general and administrative expenses within the consolidated statements of operations, giving rise to related tax benefits of $0 and $0 , respectively, for the three and six months ended June 30, 2015 and 2014. During the three months ended June 30, 2015 , there was $2.4 million in share-based compensation expense that was classified as research and development expense resulting from the vesting in full of an employee's options upon the employee's departure from the Company. As of June 30, 2015 , the total compensation cost related to nonvested option awards not yet recognized was $30.8 million and the weighted-average period over which it is expected to be recognized is 3.2 years. Stock Options The following table summarizes the stock option activity for the six months ended June 30, 2015 : Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at beginning of period 5,098,311 $ 9.46 Options granted 829,085 43.27 Options exercised (301,148 ) 7.19 Options forfeited (29,431 ) 40.05 Options expired — — Outstanding at end of period 5,596,817 $ 14.22 6.3 Options exercisable at end of period 3,815,242 $ 6.91 5.1 The following table summarizes the range of assumptions used to estimate the fair value of stock options issued during the six months ended June 30, 2015 : Risk-free interest rate 1.5%-2.0% Expected dividend yield —% Expected volatility 62.5%-65.6% Expected term (in years) 5.9-7.0 Weighted-average grant-date fair value per share $26.65 The intrinsic value of options exercised during the six months ended June 30, 2015 was $11.8 million . The fair value of awards vested during the six months ended June 30, 2015 was $5.0 million . The fair value of options vested for the six months ended June 30, 2015 includes the fair value of options with accelerated vesting as a result of an employee's departure from the Company of $2.8 million . Restricted Stock Restricted stock is common stock that is subject to restrictions, including risks of forfeiture, determined by the plan committee of the Board of Directors in its sole discretion, for so long as such common stock remains subject to any such restrictions. A holder of restricted stock has all rights of a stockholder with respect to such stock, including the right to vote and to receive dividends thereon, except as otherwise provided in the award agreement relating to such award. Restricted stock awards classified as equity within the consolidated balance sheets. The fair value of each restricted stock grant is estimated on the date of grant using the closing price of the Company's common stock on the NASDAQ Stock Market on the date of grant. On January 2, 2015, NewLink approved grants of restricted stock unit awards to certain of the named executive officers for extraordinary performance in 2014. These are recognized as grants made in 2015. During the six months ended June 30, 2015 and 2014 , there were 130,610 and 133,420 shares of restricted stock granted, respectively. These restricted stock grants had a weighted average fair value (per share) at date of grant of $43.67 and $21.71 , respectively. At June 30, 2015 and 2014 , there were 238,249 and 93,420 shares of unvested restricted stock outstanding, respectively. Compensation expense is determined for the issuance of restricted stock by amortizing over the requisite service period, or the vesting period, the aggregate fair value of the restricted stock awarded based on the closing price of the Company's common stock on the date of grant. A summary of the Company's unvested restricted stock at June 30, 2015 and changes during the six months ended June 30, 2015 is as follows: Restricted Stock Weighted Average Grant Date Fair Value Unvested at beginning of period 153,509 $ 23.63 Granted 130,610 43.67 Vested (38,070 ) 21.62 Forfeited/cancelled (7,800 ) 43.65 Unvested restricted stock at end of period 238,249 $ 34.28 As of June 30, 2015 , the total remaining unrecognized compensation cost related to issuances of restricted stock was approximately $7.1 million and is expected to be recognized over a weighted-average period of 3.3 years. The grant date fair value of awards granted during the three months ended June 30, 2015 was $5.7 million . The fair value of awards vested during the six months ended June 30, 2015 was $1.7 million . NewLink does not have a formal policy regarding the source of shares issued upon exercise of stock options or issuance of restricted stock. NewLink expects shares issued to be issued from treasury shares or new shares. |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three and six months ended June 30, 2015 , the Company recorded an income tax benefit of $1.8 million and $160,000 respectively. For the three and six months ended June 30, 2014 the Company incurred no income tax expense. The income tax benefit for the three and six months ended June 30, 2015 , differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to the changes in the valuation allowance for deferred taxes, the potential to carry back losses and orphan drug credits to 2014, and other permanent differences. Income tax expense for the three and six months ended June 30, 2014 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to the changes in the valuation allowance for deferred taxes. The valuation allowance for deferred tax assets as of June 30, 2015 and December 31, 2014 was $9.5 million and $7.1 million , respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected taxable income, and tax planning strategies in making this assessment. Valuation allowances have been established for the entire amount of the net deferred tax assets as of June 30, 2015 and December 31, 2014 , due to the uncertainty of future recoverability. As of June 30, 2015 , we had federal net operating loss carryforwards of $2.5 million and federal research and orphan drug credit carryforwards of $1.9 million . For the year ended December 31, 2014, we utilized $89.1 million in net operating loss and federal research credit carryforwards in 2014. Sections 382 and 383 of the Internal Revenue Code limit a corporation’s ability to utilize its net operating loss carryforwards and certain other tax attributes (including research credits) to offset any future taxable income or tax if the corporation experiences a cumulative ownership change of more than 50% over any rolling three-year period. State net operating loss carryforwards (and certain other tax attributes) may be similarly limited. An ownership change can therefore result in significantly greater tax liabilities than a corporation would incur in the absence of such a change, and any increased liabilities could adversely affect the corporation’s business, results of operations, financial condition and cash flow. Based on analysis from inception through December 31, 2014 , NewLink experienced Section 382 ownership changes in September 2001 and March 2003 , and BPS experienced Section 382 ownership changes in January 2006 and January 2011 . For the year ended December 31, 2014, these ownership changes limited NewLink’s ability to utilize federal net operating loss carryforwards (and certain other tax attributes) that accrued prior to the respective ownership changes of NewLink and BPS. Additional ownership changes may have occurred subsequent to December 31, 2014 and may occur in the future as a result of events over which the Company will have little or no control, including purchases and sales of the Company’s equity by its 5% stockholders, the emergence of new 5% stockholders, additional equity offerings or redemptions of the Company’s stock or certain changes in the ownership of any of the Company’s 5% stockholders. For the six months ended June 30, 2015, the Company received a $13.5 million refund payment from the IRS for overpayment of U.S. federal income taxes paid in 2014. |
Net Loss per Common Share (Note
Net Loss per Common Share (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Net Loss per Common Share Basic net loss per share is based upon the weighted-average number of common shares outstanding for the period, without consideration of common stock equivalents. Diluted net loss per share is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average potentially dilutive common shares outstanding during the period when the effect is dilutive. The following table presents the computation of basic and diluted net loss per common share (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Historical net loss per share Net loss attributable to common stockholders $ (14,091 ) $ (9,164 ) $ (2,901 ) $ (18,399 ) Basic and diluted weighted-average shares outstanding 28,661,588 27,876,652 28,408,474 27,742,029 Basic and diluted net loss per share $ (0.49 ) $ (0.33 ) $ (0.10 ) $ (0.66 ) As of June 30, 2015 , potentially dilutive stock options to purchase 912,736 shares of common stock and restricted stock awards representing 25,000 shares of common stock which had market prices at their award dates that were greater than the average market price, were excluded from our calculation of diluted net loss per share because to do so would be anti-dilutive. As of June 30, 2015 and 2014 , respectively, 5,596,817 and 4,804,850 common equivalent shares of potentially dilutive securities were not included in the calculation of diluted loss per common share because to do so would be anti-dilutive. |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingencies From time to time, claims are asserted against the Company arising in the ordinary course of business. In the opinion of management, liabilities, if any, arising from existing claims are not expected to have a material effect on the Company's earnings, financial position, or liquidity. |
License and Research Collaborat
License and Research Collaboration Agreements (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Revenue Recognition [Abstract] | |
Licensing and Research Collaboration Agreements [Text Block] | License and Research Collaboration Agreements Genentech, a Member of the Roche Group In October 2014, the Company entered into an exclusive worldwide collaboration and license agreement with Genentech, or the Genentech Agreement, for the development and commercialization of GDC-0919, one of the Company's clinical stage IDO pathway inhibitors. The parties also entered into a research collaboration for the discovery of next generation IDO and TDO pathway inhibitors to be developed and commercialized under this agreement. Under the terms of the Genentech Agreement, the Company received a nonrefundable upfront cash payment of $150.0 million from Genentech in 2014 and is eligible to receive additional payments of over $1.0 billion upon achieving certain GDC-0919 and Next Generation Product Development regulatory development, international patent acceptance, country marketing approval, and sales-based milestones. The Company is also eligible to receive escalating double digit royalty payments on potential commercial sales of multiple products by Genentech. For the three and six months ended June 30, 2015 the Company recognized revenue under the Genentech Agreement of $2.7 million and $12.2 million , respectively, associated with license and manufacturing technology transfer deliverables, which were completed in their entirety during the quarter. In accordance with the Company’s continuing performance obligation, $1.6 million of the $150.0 million upfront payment is being deferred and recognized in future years. The upfront payment provides no general right of return for any non-contingent deliverable and no portion of any revenue recognized is refundable. Merck Sharp & Dohme Corp. In November 2014, the Company entered into a licensing and collaboration agreement with Merck, or the Merck Agreement, to develop, manufacture and commercialize rVSV-EBOV (V920), an Ebola vaccine the Company licensed from the Public Health Agency of Canada, or PHAC. Under the terms of the Merck Agreement, the Company granted Merck an exclusive, royalty-bearing license to rVSV-EBOV (V920) and related technology. Accordingly, the accounting for the transaction commenced in the fourth quarter of 2014. Under the Merck Agreement, the Company received a $30.0 million non-refundable, upfront payment in December 2014, and a one-time $20.0 million non-refundable milestone payment in February 2015 upon the initiation of the pivotal clinical trial using the current rVSV-EBOV (V920) vaccine product as one arm of the trial. In addition, the Company can receive escalating royalties on potential commercial sales by Merck of the current product candidate ranging from single digit to double digits on the rVSV-EBOV (V920) license agreement product sales and escalating royalties on potential commercial sales by Merck of products other than current products within the Company’s patent rights ranging from low to high single digit, on increasing levels of annual net sales worldwide. Merck will lead the development of rVSV-EBOV (V920) and any other rVSV-based viral hemorrhagic fever vaccine product candidates in order to create a marketable product safe for human use. For the six months ended June 30, 2015 the Company recognized revenue under the Merck Agreement of $20.0 million associated with the one-time non-refundable milestone payment. For the three and six months ended June 30, 2015 , the Company recognized revenues of $36,000 and $134,000 , respectively, associated with the remaining deliverables. In accordance with the Company’s continuing performance obligations, $98,000 of the $30.0 million upfront payment is being deferred and recognized in future years. The upfront payment provides no general right of return for any non-contingent deliverable, and no portion of any revenue recognized is refundable. |
Subsequent Events (Notes)
Subsequent Events (Notes) | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | Subsequent Events The Company announced on July 31, 2015 that the international partnership studying the rVSV-EBOV (V920) vaccine candidate in Guinea has released interim data suggesting that it is effective against Ebola in a large clinical trial. According to the announcement, the interim results suggest that the vaccine candidate demonstrates efficacy within about ten days of administration to a person without the infection. The rVSV-EBOV (V920) vaccine candidate was originally developed by the PHAC, and was subsequently licensed to BPS. In late 2014, Merck licensed the vaccine from the Company to apply Merck's vaccine expertise to help accelerate the development of this promising candidate. Merck is now responsible for research, development and manufacturing of the vaccine candidate pursuant to the Merck Agreement. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the financial statements of NewLink and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Financial Instruments | Financial Instruments and Concentrations of Credit Risk Cash and cash equivalents, certificates of deposit, receivables, and accounts payable are recorded at cost, which approximates fair value based on the short-term nature of these financial instruments. The fair value and carrying value of notes payable and capital lease obligations was $1.0 million and $1.1 million as of June 30, 2015 and December 31, 2014 , respectively, and was determined using Level 2 inputs. The Company is unable to estimate the fair value of the |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018; however, early adoption at January 1, 2017, is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method, nor has it determined the effect of the standard on its ongoing financial reporting. |
Common Stock Equity Incentive18
Common Stock Equity Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | The following table summarizes the stock option activity for the six months ended June 30, 2015 : Number of options Weighted average exercise price Weighted average remaining contractual term (years) Outstanding at beginning of period 5,098,311 $ 9.46 Options granted 829,085 43.27 Options exercised (301,148 ) 7.19 Options forfeited (29,431 ) 40.05 Options expired — — Outstanding at end of period 5,596,817 $ 14.22 6.3 Options exercisable at end of period 3,815,242 $ 6.91 5.1 |
Assumptions Used in Black-Scholes Pricing Model for New Grants | The following table summarizes the range of assumptions used to estimate the fair value of stock options issued during the six months ended June 30, 2015 : Risk-free interest rate 1.5%-2.0% Expected dividend yield —% Expected volatility 62.5%-65.6% Expected term (in years) 5.9-7.0 Weighted-average grant-date fair value per share $26.65 |
Restricted Stock Activity | A summary of the Company's unvested restricted stock at June 30, 2015 and changes during the six months ended June 30, 2015 is as follows: Restricted Stock Weighted Average Grant Date Fair Value Unvested at beginning of period 153,509 $ 23.63 Granted 130,610 43.67 Vested (38,070 ) 21.62 Forfeited/cancelled (7,800 ) 43.65 Unvested restricted stock at end of period 238,249 $ 34.28 |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss per Common Share | The following table presents the computation of basic and diluted net loss per common share (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Historical net loss per share Net loss attributable to common stockholders $ (14,091 ) $ (9,164 ) $ (2,901 ) $ (18,399 ) Basic and diluted weighted-average shares outstanding 28,661,588 27,876,652 28,408,474 27,742,029 Basic and diluted net loss per share $ (0.49 ) $ (0.33 ) $ (0.10 ) $ (0.66 ) |
Description of Business (Detail
Description of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Feb. 04, 2013 | Nov. 16, 2011 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net loss | $ (14,091) | $ (9,164) | $ (2,901) | $ (18,399) | |||
Financings | |||||||
Genentech Upfront Payments | 150,000 | $ 150,000 | |||||
Merck Upfront Payments | 30,000 | $ 30,000 | |||||
Merck One-Time Milestones | 20,000 | ||||||
Initial Public Offering | |||||||
Financings | |||||||
FInancing proceeds | $ 37,600 | ||||||
Follow-on Offering | |||||||
Financings | |||||||
FInancing proceeds | $ 49,000 | ||||||
ATM Offering | |||||||
Financings | |||||||
FInancing proceeds | $ 58,700 | $ 58,700 |
Significant Accounting Polici21
Significant Accounting Policies (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Reported Value Measurement | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | $ 1 | $ 1.1 |
Long-Term Debt (Details)
Long-Term Debt (Details) - Jun. 30, 2015 - Amount - City of Ames Forgivable Loan 2010 - USD ($) | Total |
Debt Instrument | |
Outstanding Balance | $ 397,000 |
Original Available Balance | $ 400,000 |
Interest rate in default | 6.50% |
Jobs by March 10, 2015 | 150 |
Lease square feet | 20,000 |
Repayment per job | $ 3,100 |
Common Stock Equity Incentive23
Common Stock Equity Incentive Plan (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($)shares | Dec. 31, 2010shares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares | Dec. 31, 2013shares | Dec. 31, 2012shares | Dec. 31, 2011shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Expense | $ | $ 5,900,000 | $ 1,500,000 | $ 9,100,000 | $ 3,600,000 | |||||
Accelleration of Share-based Compensation Expense | $ | 2,400,000 | ||||||||
Income Tax Benefit from Compensation Expense | $ | 0 | $ 0 | |||||||
Stock Option Activity | |||||||||
Exercises | (333,508) | ||||||||
Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total Compensation Cost Related to Non-vested Option Awards | $ | $ 30,800,000 | $ 30,800,000 | |||||||
Weighted Average Vesting Period for Non-vested Option Awards, In Years | 3.2 | ||||||||
Intrinsic Value of Options Exercised | $ | $ 11,800,000 | ||||||||
Fair Value of Awards Vested | $ | 5,000,000 | ||||||||
Fair Value of Awards with Accellerated Vesting | $ | $ 2,800,000 | ||||||||
Assumptions Used in Black Scholes Pricing Model for New Grants | |||||||||
Risk Free Interest Rate | 1.51% | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 2.00% | ||||||||
Dividend Rate | 0.00% | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||||||||
Volatility Rate | 62.50% | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 65.60% | ||||||||
Expected Term (in years) | 5.9 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Simplified Method | 7 | ||||||||
Weighted average grant-date fair value per share | $ / shares | $ 26.65 | ||||||||
Stock Option Activity | |||||||||
Outstanding at beginning of period | 5,098,311 | ||||||||
Outstanding at beginning of period, weighted average exercise price | $ / shares | $ 9.46 | ||||||||
Grants | 829,085 | ||||||||
Grants, weighted average exercise price | $ / shares | $ 43.27 | ||||||||
Exercises | (301,148) | ||||||||
Exercises, weighted average exercise price | $ / shares | $ 7.19 | ||||||||
Forfeitures | (29,431) | ||||||||
Forfeitures, weighted average exercise price | $ / shares | $ 40.05 | ||||||||
Expirations | 0 | ||||||||
Expirations, weighted average exercise price | $ / shares | $ 0 | ||||||||
Outstanding at end of period | 5,596,817 | 5,596,817 | 5,098,311 | ||||||
Outstanding at end of period, weighted average exercise price | $ / shares | $ 14.22 | $ 14.22 | $ 9.46 | ||||||
Outstanding at end of period, weighted average remaining contractual term, in years | 6.3 | 6.3 | |||||||
Exercisable | 3,815,242 | 3,815,242 | |||||||
Exercisable, weighted average exercise price | $ / shares | $ 6.91 | $ 6.91 | |||||||
Exercisable, weighted average remaining contractual term, in years | 5.1 | 5.1 | |||||||
Restricted Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total Compensation Cost Related to Non-vested Option Awards | $ | $ 7,100,000 | $ 7,100,000 | |||||||
Weighted Average Vesting Period for Non-vested Option Awards, In Years | 3.3 | ||||||||
Assumptions Used in Black Scholes Pricing Model for New Grants | |||||||||
Weighted average grant-date fair value per share | $ / shares | $ 43.67 | $ 21.71 | |||||||
Grant Date Fair Value of Restricted Stock Awards Granted | $ | $ 5,700,000 | $ 1,700,000 | |||||||
Stock Option Activity | |||||||||
Grants | 130,610 | 133,420 | |||||||
Outstanding at end of period | 238,249 | 93,420 | 238,249 | 93,420 | |||||
2009 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of Shares Authorized | 7,192,547 | 7,192,547 | |||||||
Number of Shares Available for Grant | 927,421 | 927,421 | |||||||
Evergreen Increase Percentage | 4.00% | ||||||||
Increase in Number of Shares Authorized | 1,238,095 | 1,119,255 | 1,066,340 | 838,375 | 714,286 | ||||
2010 Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of Shares Authorized | 214,285 | ||||||||
Number of Shares Available for Grant | 252,652 | 252,652 | |||||||
Increase in Number of Shares Authorized | 185,715 | ||||||||
2010 Non-Employee Directors' Stock Option Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of Shares Authorized | 238,095 | ||||||||
Number of Shares Available for Grant | 131,632 | 131,632 | |||||||
Increase in Number of Shares Authorized | 161,905 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |||||
Operating Loss Carryforwards, Valuation Allowance | $ 2,500,000 | $ 2,500,000 | |||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 1,900,000 | 1,900,000 | |||
Income tax benefit | 1,829,000 | $ 0 | 160,000 | $ 0 | |
Deferred Tax Valuation Allowance | $ (9,500,000) | (9,500,000) | $ (7,100,000) | ||
Net Operating Loss Carryfoward Utilized | $ 89,100,000 | ||||
Proceeds from Income Tax Refunds | $ 13,500,000 |
Net Loss per Common Share (Net
Net Loss per Common Share (Net Loss Per Share Computation) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
ProfitLoss | $ (14,091) | $ (9,164) | $ (2,901) | $ (18,399) |
Basic and diluted average shares outstanding | 28,661,588 | 27,876,652 | 28,408,474 | 27,742,029 |
Basic and diluted net loss per share | $ (0.49) | $ (0.33) | $ (0.10) | $ (0.66) |
Net Loss per Common Share (Anti
Net Loss per Common Share (Antidilutive Securities) (Details) - shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Equity Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,596,817 | 4,804,850 | 912,736 |
Restricted Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 25,000 |
License and Research Collabor27
License and Research Collaboration Agreements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Deferred Revenue Arrangement [Line Items] | |||
Genentech Potential Milestones | $ 1,000,000,000 | $ 1,000,000,000 | |
Genentech Revenue Recognized | 2,700,000 | 12,200,000 | |
Genentech Upfront Payments | 150,000,000 | $ 150,000,000 | |
Merck Upfront Payments | 30,000,000 | 30,000,000 | |
Merck One-Time Milestones | 20,000,000 | ||
Merck Revenue Recognized | $ 36,000 | $ 134,000 | |
Genentech [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred Revenue | 1,600,000 | ||
Merck [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred Revenue | $ 98,000 |