Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GALT | |
Entity Registrant Name | GALECTIN THERAPEUTICS INC | |
Entity Central Index Key | 1,133,416 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 29,396,619 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 16,059 | $ 25,846 |
Prepaid expenses and other current assets | 53 | 554 |
Total current assets | 16,112 | 26,400 |
Intangible assets, net | 3 | 8 |
Total assets | 16,115 | 26,408 |
Current liabilities: | ||
Accounts payable | 652 | 448 |
Accrued expenses | 3,435 | 845 |
Accrued dividends payable | 67 | |
Total current liabilities | 4,087 | 1,360 |
Total liabilities | 4,087 | 1,360 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Undesignated stock, $0.01 par value; 20,000,000 shares authorized, 8,001,000 designated at September 30, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.001 par value; 50,000,000 shares authorized at September 30, 2016 and December 31, 2015, 29,396,619 and 28,825,033 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 29 | 28 |
Additional paid-in capital | 162,176 | 157,504 |
Retained deficit | (158,524) | (140,049) |
Total stockholders' equity | 10,305 | 18,040 |
Total liabilities, redeemable convertible preferred stock and stockholders' equity | 16,115 | 26,408 |
Series B-1 12% redeemable convertible preferred stock | ||
Current liabilities: | ||
Convertible preferred stock, value | 1,748 | |
Series B-2 12% redeemable convertible preferred stock | ||
Current liabilities: | ||
Convertible preferred stock, value | 3,537 | |
Series C super dividend convertible preferred stock | ||
Current liabilities: | ||
Convertible preferred stock, value | 1,723 | 1,723 |
Series A 12% convertible preferred stock | ||
Stockholders' equity: | ||
Convertible preferred stock, value | 557 | $ 557 |
Series B-1 12% convertible preferred stock | ||
Stockholders' equity: | ||
Convertible preferred stock, value | 1,760 | |
Series B-2 12% convertible preferred stock | ||
Stockholders' equity: | ||
Convertible preferred stock, value | 3,697 | |
Series B-3 8% convertible preferred stock | ||
Stockholders' equity: | ||
Convertible preferred stock, value | $ 610 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Undesignated stock, par value | $ 0.01 | $ 0.01 |
Undesignated stock, shares authorized | 20,000,000 | 20,000,000 |
Undesignated stock, shares designated | 8,001,000 | 8,001,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 29,396,619 | 28,825,033 |
Common stock, outstanding | 29,396,619 | 28,825,033 |
Series B-1 12% redeemable convertible preferred stock | ||
Convertible preferred stock, shares authorized | 900,000 | |
Convertible preferred stock, shares issued | 900,000 | |
Convertible preferred stock, shares outstanding | 900,000 | |
Series B-2 12% redeemable convertible preferred stock | ||
Convertible preferred stock, shares authorized | 2,100,000 | |
Convertible preferred stock, shares issued | 2,100,000 | |
Convertible preferred stock, shares outstanding | 2,100,000 | |
Series C super dividend convertible preferred stock | ||
Convertible preferred stock, shares authorized | 1,000 | 1,000 |
Convertible preferred stock, shares issued | 176 | 176 |
Convertible preferred stock, shares outstanding | 176 | 176 |
Convertible preferred stock, redemption value | $ 6,355,000 | |
Convertible preferred stock, liquidation value | $ 1,760,000 | |
Series A 12% convertible preferred stock | ||
Convertible preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Convertible preferred stock, issued | 1,377,500 | 1,377,500 |
Convertible preferred stock, outstanding | 1,377,500 | 1,377,500 |
Convertible preferred stock, liquidation value | $ 1,377,500 | |
Series B-1 12% convertible preferred stock | ||
Convertible preferred stock, shares authorized | 900,000 | |
Convertible preferred stock, issued | 900,000 | |
Convertible preferred stock, outstanding | 900,000 | |
Convertible preferred stock, liquidation value | $ 1,800,000 | |
Series B-2 12% convertible preferred stock | ||
Convertible preferred stock, shares authorized | 2,100,000 | |
Convertible preferred stock, issued | 2,100,000 | |
Convertible preferred stock, outstanding | 2,100,000 | |
Convertible preferred stock, liquidation value | $ 4,200,000 | |
Series B-3 8% convertible preferred stock | ||
Convertible preferred stock, shares authorized | 1,500,000 | |
Convertible preferred stock, issued | 1,500,000 | |
Convertible preferred stock, outstanding | 1,500,000 | |
Convertible preferred stock, liquidation value | $ 1,500,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating expenses: | ||||
Research and development | $ 3,289 | $ 4,464 | $ 11,892 | $ 10,200 |
General and administrative | 1,248 | 1,435 | 4,990 | 5,196 |
Total operating expenses | 4,537 | 5,899 | 16,882 | 15,396 |
Total operating loss | (4,537) | (5,899) | (16,882) | (15,396) |
Other income (expense): | ||||
Interest income | 11 | 12 | 37 | 40 |
Total other income (expense) | 11 | 12 | 37 | 40 |
Net loss | (4,526) | (5,887) | (16,845) | (15,356) |
Preferred stock dividends | (63) | (208) | (466) | (629) |
Preferred stock accretion | (56) | (57) | (171) | (172) |
Deemed dividend related to beneficial conversion feature of convertible preferred stock | (991) | (991) | ||
Net loss applicable to common stockholders | $ (5,636) | $ (6,152) | $ (18,473) | $ (16,157) |
Net loss per common share - basic and diluted | $ (0.19) | $ (0.26) | $ (0.64) | $ (0.69) |
Weighted average common shares outstanding - basic and diluted | 29,282 | 23,793 | 29,045 | 23,531 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (16,845) | $ (15,356) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5 | 6 |
Stock-based compensation expense | 2,001 | 2,527 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 501 | 350 |
Accounts payable and accrued expenses | 2,794 | 91 |
Net cash used in operating activities | (11,544) | (12,382) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net cash used in investing activities | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of Series B-3 preferred stock and warrants | 1,500 | |
Net proceeds from issuance of common stock and warrants | 257 | 4,573 |
Net cash provided by financing activities | 1,757 | 4,573 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (9,787) | (7,809) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 25,846 | 29,128 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 16,059 | 21,319 |
NONCASH FINANCING ACTIVITIES: | ||
Payment of preferred stock dividends in common stock | $ 534 | $ 629 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation | 1. Basis of Presentation Galectin Therapeutics Inc. (the “Company”) is a clinical stage biopharmaceutical company that is applying its leadership in galectin science and drug development to create new therapies for fibrotic disease and cancer. These candidates are based on the Company’s targeting of galectin proteins which are key mediators of biologic and pathologic function. These compounds also may have application for drugs to treat other diseases and chronic health conditions. The unaudited condensed consolidated financial statements as reported in this Quarterly Report on Form 10-Q reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of September 30, 2016 and the results of its operations for the three and nine months ended September 30, 2016 and 2015 and its cash flows for the nine months ended September 30, 2016 and 2015. All adjustments made to the interim financial statements include all those of a normal and recurring nature. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date these financial statements are available to be issued. The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year. The unaudited condensed consolidated financial statements of the Company should be read in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2015. The Company has operated at a loss since its inception and has had no significant revenues. The Company anticipates that losses will continue for the foreseeable future. At September 30, 2016, the Company had $16.1 million of unrestricted cash and cash equivalents available to fund future operations. The Company believes that with the cash on hand at September 30, 2016, there is sufficient cash to fund currently planned operations through August 2017. The Company’s ability to fund operations after its current cash resources are exhausted depends on its ability to obtain additional financing or achieve profitable operations, as to which no assurances can be given. Accordingly, based on the forecasts and estimates underlying the Company’s current operating plan, the financial statements do not currently include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company was founded in July 2000, was incorporated in the State of Nevada in January 2001 under the name “Pro-Pharmaceuticals, Inc.,” and changed its name to “Galectin Therapeutics Inc.” on May 26, 2011. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Expenses | 2. Accrued Expenses Accrued expenses consist of the following: June 30, December 31, (in thousands) Legal and accounting fees $ 192 $ 123 Accrued compensation 576 626 Accrued research and development costs and other 2,667 96 Total $ 3,435 $ 845 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | 3. Stock-Based Compensation Following is the stock-based compensation expense related to common stock options, common stock, restricted common stock and common stock warrants: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Research and development $ 165 $ 237 $ 598 $ 780 General and administrative 211 556 1,403 1,747 Total stock-based compensation expense $ 376 $ 793 $ 2,001 $ 2,527 The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2015 through September 30, 2016: Shares Weighted Average Outstanding, December 31, 2015 3,342,325 $ 5.70 Granted 277,500 1.37 Exercised — — Options forfeited/cancelled (120,187 ) 3.41 Outstanding, September 30, 2016 3,499,638 $ 5.43 As of September 30, 2016, there was $875,000 of unrecognized compensation related to 445,149 unvested options, which is expected to be recognized over a weighted–average period of approximately 1.76 years. The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used: Nine Six 2016 2015 Risk-free interest rate 1.7 % 1.58 % Expected life of the options 6.0 years 6.0 years Expected volatility of the underlying stock 94 % 114 % Expected dividend rate 0 % 0 % The following table summarizes the restricted stock grant activity in the Company’s equity incentive plans from December 31, 2015 through September 30, 2016: Shares Outstanding, December 31, 2015 754,605 Granted — Exercised — Options forfeited/cancelled — Outstanding, September 30, 2016 754,605 On March 12, 2015, the Company granted 81,352 shares of restricted stock to non-employee directors as a component of their compensation. A total of 77,784 shares were issued to seven directors representing non-cash compensation cost of $280,000 which will be recognized on a straight-line basis from the grant date through December 15, 2016, when the restricted shares will vest in full. A total of 3,568 shares were issued to two directors, who were not nominated for reelection, representing non-cash compensation cost of $12,845 that will be recognized on a straight-line basis from the grant date through December 15, 2016, when the restricted shares will vest in full. |
Common Stock Warrants
Common Stock Warrants | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock Warrants | 4. Common Stock Warrants The following table summarizes the common stock warrant activity from December 31, 2015 through September 30, 2016: Shares Weighted Average Outstanding, December 31, 2015 8,908,586 $ 3.18 Granted 1,544,258 3.00 Exercised — — Forfeited/cancelled — — Outstanding, June 30, 2016 10,452,844 $ 3.17 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments The Company has certain financial assets and liabilities recorded at fair value. Fair values determined by Level 1 inputs utilize observable data such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts reflected in the consolidated balance sheets for cash equivalents, accounts payable and accrued expenses approximate their carrying value due to their short-term nature. There were no level 2 or level 3 assets or liabilities at September 30, 2016 or December 31, 2015. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Loss Per Share | 6. Loss Per Share Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares and other potential common shares then outstanding. Potential common shares consist of common shares issuable upon the assumed exercise of in-the-money stock options and warrants and potential common shares related to the conversion of the preferred stock. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share. Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows: September 30, 2016 September 30, 2015 Warrants to purchase shares of common stock 10,452,844 5,370,995 Options to purchase shares of common stock 3,499,638 3,342,325 Shares of common stock issuable upon conversion of preferred stock 3,415,285 2,522,936 Unvested shares of restricted common stock 337,935 337,935 17,705,702 11,574,191 |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock | 7. Common Stock 2014 At Market Issuance of Common Stock On March 30, 2014, the Company entered into an At Market Issuance Sales Agreement (the “2014 At Market Agreement”) with a sales agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $30.0 million from time to time through the sales agent. Sales of the Company’s common stock through the sales agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S. Securities and Exchange Commission. The Company will pay to the sales agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the sales agent under the 2014 At Market Agreement. In the three months ended June 30, 2016, the Company issued 176,950 share of common stock for net proceeds of approximately $257,000 under the 2014 At Market Agreement. In three months ended March 31, 2015, the Company issued 1,279,416 shares of common stock for net proceeds of approximately $4,532,000 under the 2014 At Market Agreement. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2016 | |
Preferred Stock | 8. Preferred Stock On September 22, 2016, the Company entered into a securities purchase agreement (the “B-3 Agreement”) pursuant to which it agreed to issue and sell to 10X Fund LP: (i) 1.500,000 shares its Series B-3 convertible preferred stock (“Series B-3 preferred stock” or “Series B-3”) with an aggregate stated value and proceeds of $1.5 million and convertible into 892,349 shares of common stock, and (ii) warrants to purchase up to 669,262 shares of common stock. Also, pursuant to agreements signed on September 22, 2016 with 10X Fund LP, the Company issued 875,000 warrants to purchase common stock in exchange in exchange for the 10X Fund LP agreeing not to sell any shares of common or preferred stock in the Company for 18 months, except in limited circumstances. Additionally, as previously agreed to by the 10X Fund LP, the sole holder of the Company’s Series B-1 convertible preferred stock (the “Series B-1”), Series B-2 convertible preferred stock (the “Series B-2”) and Series B-3 preferred stock (collectively, with the Series B-1 and Series B-2, the “Series B”), in the Second Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series B preferred stock we removed the ability of the holders of the Series B to cause a redemption of their shares of Series B. Accordingly, the Company accounted for the removal of this redemption feature as a modification and reclassified the Series B-1 and Series B-2 preferred stock into permanent equity at September 30, 2016. The terms of the Series B-3 are as follows: Dividends Conversion Rights Liquidation Rights pari passu Voting Rights Other Restrictions Warrants The fair value of the warrants issued in connection with the Series B-3 was $2,262,000 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 95%, risk free interest rate of 1.42% and zero dividends. The Company allocated the gross proceeds of $1.5 million based on the relative fair value of the Series B-3 and the related warrants, resulting in $890,000 of the proceeds being allocated to additional paid-in capital and $610,000 being allocated to the Series B-3. The Company analyzed the Series B-3, post-allocation of the gross proceeds, and determined that there was a beneficial conversion feature at the dates of issuance. Because the closing price of the common stock on the closing date was greater than the effective conversion price, an embedded beneficial conversion feature of the Series B-3 amounting to $991,000 was charged to additional paid in capital and accumulated deficit. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | Shareholder Class Actions and Derivative Lawsuits Between July 30, 2014, and August 6, 2014, three putative class action complaints were filed in the United States District Court for the District of Nevada (the “Nevada District Court”) against the Company and certain of its officers and directors on behalf of all persons who purchased or otherwise acquired the Company’s stock between January 6, 2014 and July 28, 2014. The complaints allege that the defendants made false or misleading statements in certain press releases and other public statements in violation of the federal securities laws and seek class certification, unspecified monetary damages, costs, and attorneys’ fees. The Company disputes the allegations in the complaints and intends to vigorously defend against the claims. On August 22, 2014, the Nevada District Court entered an order consolidating the three cases, relieving the defendants of any obligation to respond to the complaints then on file, and providing that defendants may respond to a consolidated amended complaint to be filed by a lead plaintiff(s) to be appointed pursuant to the Private Securities Litigation Reform Act of 1995. On January 5, 2015, the Nevada District Court granted Defendants’ motion to transfer the consolidated putative securities class action to the United States District Court for the Northern District of Georgia. On March 24, 2015, the Court appointed a lead plaintiff (“Plaintiff’). Plaintiff filed his Consolidated Class Action Complaint (the “Complaint”) on May 8, 2015. The Complaint asserts claims on behalf of a putative class of all persons who purchased or otherwise acquired the Company’s common stock between October 25, 2013 and July 28, 2014. The Complaint alleges that the Company and certain of its officers and directors (the “Class Action Individual Defendants”) violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 through allegedly false or misleading statements in certain SEC filings, press releases and other public statements. The Complaint further alleges that the Class Action Individual Defendants and one of the Company’s shareholders face liability for the alleged Section 10(b) and Rule 10b-5 violations pursuant to Section 20(a) of the Exchange Act. The Complaint seeks class certification, unspecified monetary damages, costs, and attorneys’ fees. The Company disputes the allegations and filed a motion to dismiss the Complaint on June 26, 2015. On December 30, 2015, the Court dismissed the putative class action with prejudice and entered a final judgment in favor of the defendants. Plaintiff filed a notice of appeal seeking review of the dismissal order and final judgment. The appeal is fully briefed and is currently pending before the United States Court of Appeals for the Eleventh Circuit. On August 1 and 25, 2014, persons claiming to be Galectin shareholders filed putative shareholder derivative complaints in the Nevada District Court, seeking recovery on behalf of the Company against certain of the Company’s directors and officers. On September 10, 2014, the Nevada District Court entered an order consolidating the two cases, relieving the defendants of any obligation to respond to the initial complaints, and providing that defendants may respond to a consolidated complaint to be filed by the plaintiffs. On January 5, 2015, the Nevada District Court granted Defendants’ motion to transfer the consolidated putative derivative litigation to the United States District Court for the Northern District of Georgia (hereinafter referred to as the “Georgia Federal Derivative Action.”) The plaintiffs filed a consolidated complaint on February 27, 2015. On April 6, 2015, the Company and defendants filed motions to dismiss the consolidated complaint. Rather than respond to those motions, the plaintiffs sought and obtained leave to file an amended complaint. Plaintiffs filed their amended complaint (the “Complaint”) on May 26, 2015. The Complaint alleges that certain of the Company’s directors and officers (the “Derivative Action Individual Defendants”) breached their fiduciary duties to the Company’s shareholders by causing or permitting the Company to make allegedly false and misleading public statements concerning the Company’s financial and business prospects. The Complaint also alleges that the Derivative Action Individual Defendants violated the federal securities laws by allegedly making false or misleading statements of material fact in the Company’s proxy filings, committed waste of corporate assets, were unjustly enriched, and that certain defendants breached their fiduciary duties through allegedly improper sales of Galectin stock. In addition, the Complaint alleges that the Derivative Action Individual Defendants and one of the Company’s shareholders aided and abetted the alleged breaches of fiduciary duties. The Complaint seeks unspecified monetary damages on behalf of the Company, corporate governance reforms, disgorgement of profits, benefits and compensation by the defendants, costs, and attorneys’ and experts’ fees. The Company and defendants filed motions to dismiss the Complaint on July 8, 2015. On December 30, 2015, the United States District Court for the Northern District of Georgia dismissed the Georgia Federal Derivative Action with prejudice and entered a final judgment in favor of the defendants. Plaintiffs filed a notice of appeal seeking review of the dismissal order and final judgment. On July 7, 2016, the United States Court of Appeals for the Eleventh Circuit dismissed the appeal as the Plaintiffs failed to timely file their appeal brief. In September 2016, the Board received a demand letter from one of the plaintiffs in the Georgia Federal Derivative Action. The demand letter, among other things, requests that the Board investigate the conduct alleged in the Complaint and implement certain remedial measures purportedly designed to address the alleged conduct. It is expected that the Board will consider the demand letter in due course and in light of the related pending shareholder litigation described herein. On August 29, 2014, another alleged Galectin shareholder filed a putative shareholder derivative complaint in state court in Las Vegas, Nevada, seeking recovery on behalf of the Company against the same Galectin directors and officers who are named as defendants in the derivative litigation pending in the Georgia Federal Derivative Action. The plaintiff in the Nevada action subsequently filed first and second amended complaints. The second amended complaint alleges claims for breach of fiduciary duties, unjust enrichment, and waste of corporate assets, based on allegations that are substantially similar to those asserted in the Georgia Federal Derivative Action (except that the Nevada action does not allege violations of the federal securities laws and does not assert any claim against the Galectin shareholder named as a defendant in the Georgia Federal Derivative Action), and seeks unspecified monetary damages on behalf of the Company, corporate governance reforms, disgorgement of profits, benefits and compensation by the defendants, costs, and attorneys’ and experts’ fees. The Company and defendants filed motions to dismiss the second amended complaint on April 22, 2015. On April 29, 2015, the plaintiffs in the Georgia Federal Derivative Action (the “Intervenor Plaintiffs”) filed a motion to intervene in the Nevada action which, among other things, raised questions regarding the Nevada plaintiff’s standing. Thereafter, the Nevada plaintiff filed a motion to join additional plaintiffs. At a hearing held on June 11, 2015, the Nevada court: (i) granted the Intervenor Plaintiffs’ motion to intervene; (ii) directed the Intervenor Plaintiffs to file a complaint in intervention; (iii) directed the Nevada plaintiff to file a motion for leave to file a further amended complaint to add additional plaintiffs; (iv) stated that the defendants’ motions to dismiss the second amended complaint were denied “at this point;” (v) ordered the Nevada action stayed until December 11 , 2015; and (vi) directed the parties to submit a status report on December 11, 2015, updating the court on the progress and status of the Georgia Federal Derivative Action. On July 9, 2015, pursuant to the Nevada State Court’s instruction, the Intervenor Plaintiffs filed a complaint-in-intervention in Nevada State Court, asserting similar claims to the ones they alleged in the Georgia Federal Derivative Action described above. On December 11, 2015, further to the Nevada State Court’s instruction, the parties submitted status reports detailing the status of the Georgia Federal Derivative Action. On January 5, 2016, the Nevada State Court held a status conference during which the dismissal of the Georgia Federal Derivative Action was discussed. Subsequent to that conference, on January 19, 2016, the defendants filed a motion to dismiss the Nevada State Court litigation based on the dismissal of the similar Georgia Federal Derivative Action, among other grounds. Defendants’ motion to dismiss was fully briefed to the Nevada court in February 2016. At a hearing on March 3, 2016, the Nevada State Court granted dismissal of the Nevada State Court litigation pending entry of a final order of dismissal. The Nevada State Court issued its order of dismissal on April 1, 2016. Defendants thereafter filed a motion requesting that the Nevada State Court correct certain language in the dismissal order. In an order dated June 10, 2016, the Nevada State Court denied Defendants’ motion seeking correction of certain language in the dismissal order. On June 21, 2016, Notice of Entry of the Nevada State Court’s order dismissing the Nevada State Court litigation was docketed. The Nevada plaintiff and Intervenor Plaintiffs have filed notices of appeal seeking review of the Nevada State Court’s dismissal order. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, are in the early stages of the proceedings, and are subject to appeal. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, the matters described above. Based on information currently available, the Company does not believe that any reasonably possible losses arising from currently pending legal matters will be material to the Company’s results of operations or financial condition. However, in light of the inherent uncertainties involved in such matters, an adverse outcome in one or more of these matters could materially and adversely affect the Company’s financial condition, results of operations or cash flows in any particular reporting period. Other Legal Proceedings The Company records accruals for such contingencies to the extent that the Company concludes that their occurrence is probable and the related damages are estimable. There are no other pending legal proceedings except as noted above. |
Galectin Sciences LLC
Galectin Sciences LLC | 9 Months Ended |
Sep. 30, 2016 | |
Galectin Sciences LLC | 10. Galectin Sciences LLC In January 2014, we created Galectin Sciences, LLC (the “LLC” or “Investee”), a collaborative joint venture co-owned by SBH Sciences, Inc. (“SBH”), to research and develop small organic molecule inhibitors of galectin-3 for oral administration. The LLC was initially capitalized with a $400,000 cash investment to fund future research and development activities, which was provided by the Company, and specific in-process research and development (“IPR&D”) contributed by SBH. The estimated fair value of the IPR&D contributed by SBH, on the date of contribution, was $400,000. Initially, the Company and SBH had a 50% equity ownership interest in the LLC, with neither party having control over the LLC. Accordingly, from inception through the fourth quarter of 2014, the Company accounted for its investment in the LLC using the equity method of accounting. Under the equity method of accounting, the Company’s investment was initially recorded at cost with subsequent adjustments to the carrying value to recognize additional investments in or distributions from the Investee, as well as the Company’s share of the Investee’s earnings, losses and/or changes in capital. The estimated fair value of the IPR&D contributed to the LLC was immediately expensed upon contribution as there was no alternative future use available at the point of contribution. The operating agreement provides that if either party does not desire to contribute its equal share of funding required after the initial capitalization, then the other party, providing all of the funding, will have its ownership share increased in proportion to the total amount contributed from inception. In the fourth quarter of 2014, after the LLC had expended the $400,000 in cash, SBH decided not to contribute its share of the funding required. As a result, the Company contributed the $73,000 needed for the fourth quarter of 2014 expenses of the LLC. As a result, the Company’s ownership percentage in the LLC was 54.2% at December 31, 2014. The Company contributed $687,000 for the LLC expenses in 2015 adjusting the Company’s ownership percentage to 74.7% at December 31, 2015. The Company also contributed $618,000 for the LLC expenses in the nine months ended September 30, 2016 which adjusted the Company’s ownership percentage to 81.8% at September 30, 2016. The Company accounts for the interest in the LLC as a consolidated, less than wholly owned subsidiary. Because the LLC’s equity is immaterial, the value of the non-controlling interest is also deemed to be immaterial. |
Recent Account Pronouncements
Recent Account Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Recent Account Pronouncements | In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The new standard will be effective for us on January 1, 2017. This standard is not expected to have a material impact on our financial position, results of operations or statements of cash flows upon adoption. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements — Going Concern (“ASU 2014-15”), which would require disclosure of uncertainties about an entity’s ability to continue as a going concern. The new guidance is effective for the annual period ending after December 15, 2016 and for interim periods thereafter. Early application is permitted. We plan to adopt ASU 2014-15 beginning December 31, 2016. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments.” This ASU provides new guidance on eight specific cash flow issues related to how such cash receipts and cash payments should be presented in a statement of cash flows. This ASU is effective for us beginning after January 1, 2018. We are currently assessing the impact the adoption of this update will have on our consolidated cash flows. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Expenses | Accrued expenses consist of the following: June 30, December 31, (in thousands) Legal and accounting fees $ 192 $ 123 Accrued compensation 576 626 Accrued research and development costs and other 2,667 96 Total $ 3,435 $ 845 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation Expense Related to Common Stock Options, Common Stock, Restricted Common Stock and Common Stock Warrants | Following is the stock-based compensation expense related to common stock options, common stock, restricted common stock and common stock warrants: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Research and development $ 165 $ 237 $ 598 $ 780 General and administrative 211 556 1,403 1,747 Total stock-based compensation expense $ 376 $ 793 $ 2,001 $ 2,527 |
Summary of Stock Option Activity | The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2015 through September 30, 2016: Shares Weighted Average Outstanding, December 31, 2015 3,342,325 $ 5.70 Granted 277,500 1.37 Exercised — — Options forfeited/cancelled (120,187 ) 3.41 Outstanding, September 30, 2016 3,499,638 $ 5.43 |
Weighted Average Assumptions Used to Determine Fair Value of Options Granted | The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used: Nine Six 2016 2015 Risk-free interest rate 1.7 % 1.58 % Expected life of the options 6.0 years 6.0 years Expected volatility of the underlying stock 94 % 114 % Expected dividend rate 0 % 0 % |
Summary of Restricted Stock Grant Activity | The following table summarizes the restricted stock grant activity in the Company’s equity incentive plans from December 31, 2015 through September 30, 2016: Shares Outstanding, December 31, 2015 754,605 Granted — Exercised — Options forfeited/cancelled — Outstanding, September 30, 2016 754,605 |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock Warrant Activity | The following table summarizes the common stock warrant activity from December 31, 2015 through September 30, 2016: Shares Weighted Average Outstanding, December 31, 2015 8,908,586 $ 3.18 Granted 1,544,258 3.00 Exercised — — Forfeited/cancelled — — Outstanding, June 30, 2016 10,452,844 $ 3.17 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Dilutive Shares Which Could Exist Pursuant to Exercise of Outstanding Stock Instruments and Which were not Included in Calculation | Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows: September 30, 2016 September 30, 2015 Warrants to purchase shares of common stock 10,452,844 5,370,995 Options to purchase shares of common stock 3,499,638 3,342,325 Shares of common stock issuable upon conversion of preferred stock 3,415,285 2,522,936 Unvested shares of restricted common stock 337,935 337,935 17,705,702 11,574,191 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Basis of Presentation [Line Items] | ||||
Unrestricted cash and cash equivalents | $ 16,059 | $ 25,846 | $ 21,319 | $ 29,128 |
Accrued Expenses (Detail)
Accrued Expenses (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Accrued Liabilities [Line Items] | ||
Legal and accounting fees | $ 192 | $ 123 |
Accrued compensation | 576 | 626 |
Accrued research and development costs and other | 2,667 | 96 |
Total | $ 3,435 | $ 845 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense Related to Common Stock Options, Restricted Common Stock and Common Stock Warrants (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 376 | $ 793 | $ 2,001 | $ 2,527 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 165 | 237 | 598 | 780 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 211 | $ 556 | $ 1,403 | $ 1,747 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Detail) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Shares | |
Beginning Balance | shares | 3,342,325 |
Granted | shares | 277,500 |
Exercised | shares | 0 |
Options forfeited/cancelled | shares | (120,187) |
Ending Balance | shares | 3,499,638 |
Weighted Average Exercise Price | |
Beginning Balance | $ / shares | $ 5.70 |
Granted | $ / shares | 1.37 |
Exercised | $ / shares | 0 |
Options forfeited/cancelled | $ / shares | 3.41 |
Ending Balance | $ / shares | $ 5.43 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | Mar. 12, 2015USD ($)Directorshares | Sep. 30, 2016USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ | $ 875,000 | |
Unvested option | 445,149 | |
Unrecognized compensation cost, recognition period | 1 year 9 months 4 days | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards granted | 81,352 | 0 |
Restricted Stock | Non Employees Seven Board Of Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards granted | 77,784 | |
Number of non-employee directors | Director | 7 | |
Non-cash stock-based compensation expense to be recognized | $ | $ 280,000 | |
Share based compensation, cliff vest in full date | Dec. 15, 2016 | |
Restricted Stock | Non Employees Two Board Of Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards granted | 3,568 | |
Number of non-employee directors | Director | 2 | |
Non-cash stock-based compensation expense to be recognized | $ | $ 12,845 | |
Share based compensation, cliff vest in full date | Dec. 15, 2016 |
Weighted Average Assumptions Us
Weighted Average Assumptions Used to Determine Fair Value of Options Granted (Detail) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.58% | 1.70% |
Expected life of the options | 6 years | 6 years |
Expected volatility of the underlying stock | 114.00% | 94.00% |
Expected dividend rate | 0.00% | 0.00% |
Summary of Restricted Stock Gra
Summary of Restricted Stock Grant Activity (Detail) - Restricted Stock - shares | Mar. 12, 2015 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Beginning Balance | 754,605 | |
Granted | 81,352 | 0 |
Exercised | 0 | |
Options forfeited/cancelled | 0 | |
Ending Balance | 754,605 |
Common Stock Warrant Activity (
Common Stock Warrant Activity (Detail) - Warrant | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Shares | |
Beginning Balance | shares | 8,908,586 |
Granted | shares | 1,544,258 |
Exercised | shares | 0 |
Forfeited/cancelled | shares | 0 |
Ending Balance | shares | 10,452,844 |
Weighted Average Exercise Price | |
Outstanding, December 31, 2015 | $ / shares | $ 3.18 |
Granted | $ / shares | 3 |
Exercised | $ / shares | 0 |
Forfeited/cancelled | $ / shares | 0 |
Outstanding, September 30, 2016 | $ / shares | $ 3.17 |
Dilutive Shares Which Could Exi
Dilutive Shares Which Could Exist Pursuant to Exercise of Outstanding Stock Instruments and Which were not Included in Calculation (Detail) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in calculation | 17,705,702 | 11,574,191 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in calculation | 10,452,844 | 5,370,995 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in calculation | 3,499,638 | 3,342,325 |
Contingently Issuable Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in calculation | 3,415,285 | 2,522,936 |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in calculation | 337,935 | 337,935 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Mar. 30, 2014 | |
Class of Stock [Line Items] | |||||
Net proceeds from issuance of common stock | $ 257,000 | $ 4,573,000 | |||
2014 At Market Agreement | |||||
Class of Stock [Line Items] | |||||
Aggregate offering price | $ 30,000,000 | ||||
Commission to sales agent as a percentage of gross proceeds | 3.00% | ||||
Shares of common stock issued | 176,950 | 1,279,416 | |||
Net proceeds from issuance of common stock | $ 257,000 | $ 4,532,000 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) | Sep. 22, 2016USD ($)shares | Sep. 30, 2016USD ($)Director$ / shares |
Class of Stock [Line Items] | ||
Aggregate stated value and proceeds | $ 1,500,000 | |
Series B Directors | ||
Class of Stock [Line Items] | ||
Number of board of directors | Director | 2 | |
Series B Nominees | ||
Class of Stock [Line Items] | ||
Number of board of directors | Director | 3 | |
Additional Paid-In Capital | ||
Class of Stock [Line Items] | ||
Aggregate stated value and proceeds | $ 890,000 | |
Series B-3 8% convertible preferred stock | ||
Class of Stock [Line Items] | ||
Aggregate stated value and proceeds | $ 610,000 | |
Preferred stock, dividend rate | 8.00% | |
Dividend, percentage of value weighted average share price | 100.00% | |
Number of consecutive trading days prior to dividend payment date | 20 days | |
Dividends accrue rate | 15.00% | |
Liquidation preference per share after series A preferred stock | $ / shares | $ 1 | |
Exercise price of warrant | $ / shares | $ 3 | |
Fair value of warrants | $ 2,262,000 | |
Fair value assumptions, term of warrants | 7 years | |
Fair value assumptions, volatility rate | 95.00% | |
Fair value assumptions, risk free interest rate | 1.42% | |
Fair value assumptions, dividend rate | 0.00% | |
Embedded beneficial conversion feature | $ (991,000) | |
B Three Securities Purchase Agreement | ||
Class of Stock [Line Items] | ||
Warrants to purchase common stock issued in agreeing not to sell any share for 18 months | shares | 875,000 | |
B Three Securities Purchase Agreement | Maximum | ||
Class of Stock [Line Items] | ||
Warrants to purchase common stock | shares | 669,262 | |
B Three Securities Purchase Agreement | Series B-3 8% convertible preferred stock | ||
Class of Stock [Line Items] | ||
Number of shares agreed to issue and sell | shares | 1,500,000 | |
Aggregate stated value and proceeds | $ 1,500,000 | |
Number of common stock issued upon conversion | shares | 892,349 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Aug. 06, 2014LegalMatter |
Commitment And Contingencies [Line Items] | |
Number of putative class action complaints filed | 3 |
Galectin Science LLC - Addition
Galectin Science LLC - Additional Information (Detail) - Galectin Sciences, LLC - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jan. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investments in and Advances to Affiliates [Line Items] | |||||
Equity method investment in Galectin Sciences LLC | $ 400,000 | ||||
Subsequent capital contribution | $ 73,000 | $ 618,000 | $ 687,000 | ||
Equity Method Investment, Ownership Percentage | 50.00% | 81.80% | 74.70% | ||
Ownership Percentage | 54.20% | ||||
SBH Sciences, Inc | In Process Research and Development | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Estimated fair value of the IPR&D Contributed by SBH | $ 400,000 |