Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Vitae Pharmaceuticals, Inc | |
Entity Central Index Key | 1,157,602 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,870,276 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 16,933,091 | $ 29,494,755 |
Marketable securities, available-for-sale | 52,393,215 | 35,823,545 |
Prepaid expenses and other current assets | 2,021,293 | 1,516,193 |
Total current assets | 71,347,599 | 66,834,493 |
Cash-restricted | 200,000 | 200,000 |
Property and equipment, net | 524,628 | 417,629 |
Deferred offering costs | 207,743 | |
Total assets | 72,072,227 | 67,659,865 |
Current liabilities: | ||
Notes payable-current portion | 4,804,176 | |
Accounts payable | 3,138,180 | 641,590 |
Accrued expenses | 4,503,611 | 3,139,721 |
Interest payable | 278,620 | |
Total current liabilities | 7,641,791 | 8,864,107 |
Deferred rent and lease incentives | 56,386 | 77,707 |
Total liabilities | $ 7,698,177 | $ 8,941,814 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized at September 30, 2015 and December 31, 2014, no shares issued and outstanding at September 30, 2015 and December 31, 2014 | ||
Common stock, $0.0001 par value, 150,000,000 shares authorized at September 30, 2015 and December 31, 2014, 21,870,438 and 18,026,892 shares issued and 21,870,227 and 18,026,892 shares outstanding at September 30, 2015 and December 31, 2014, respectively | $ 2,187 | $ 1,803 |
Additional paid in capital | 226,896,705 | 188,735,965 |
Treasury stock | (2,324) | |
Accumulated comprehensive loss | (7,633) | (38,812) |
Accumulated deficit | (162,514,885) | (129,980,905) |
Total stockholders' deficit | 64,374,050 | 58,718,051 |
Total liabilities and stockholders' equity | $ 72,072,227 | $ 67,659,865 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 21,870,438 | 18,026,892 |
Common stock, shares outstanding | 21,870,227 | 18,026,892 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statements of Operations | ||||
Collaborative revenues | $ 175,756 | $ 6,178,166 | $ 487,583 | $ 8,507,113 |
Operating expenses: | ||||
Research and development | 10,665,585 | 4,799,268 | 25,944,323 | 14,224,526 |
General and administrative | 2,671,580 | 3,096,399 | 7,041,994 | 5,724,690 |
Total operating expenses | 13,337,165 | 7,895,667 | 32,986,317 | 19,949,216 |
Loss from operations | (13,161,409) | (1,717,501) | (32,498,734) | (11,442,103) |
Other income (expenses): | ||||
Other income | 125,544 | 1,430 | 343,318 | |
Interest income | 95,967 | 7,894 | 277,980 | 36,709 |
Interest expense | (114) | (225,355) | (107,978) | (766,392) |
Loss on debt extinguishment | (206,678) | |||
Total other income (expenses) | 95,853 | (91,917) | (35,246) | (386,365) |
Net loss | $ (13,065,556) | $ (1,809,418) | $ (32,533,980) | $ (11,828,468) |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (0.60) | $ (1.06) | $ (1.51) | $ (12.18) |
Diluted (in dollars per share) | $ (0.60) | $ (1.06) | $ (1.51) | $ (12.18) |
Weighted average number of common shares: | ||||
Basic (in shares) | 21,853,530 | 1,711,969 | 21,483,233 | 971,439 |
Diluted (in shares) | 21,853,530 | 1,711,969 | 21,483,233 | 971,439 |
Statements of Comprehensive Los
Statements of Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statements of Comprehensive Loss | ||||
Net loss | $ (13,065,556) | $ (1,809,418) | $ (32,533,980) | $ (11,828,468) |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on marketable securities | 41,299 | (3,882) | 31,179 | (4,494) |
Comprehensive loss | $ (13,024,257) | $ (1,813,300) | $ (32,502,801) | $ (11,832,962) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities: | ||
Net loss | $ (32,533,980) | $ (11,828,468) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 160,583 | 155,176 |
Stock-based compensation expense | 1,763,416 | 2,079,351 |
Deferred rent and lease incentives | (9,482) | 858 |
Amortization of deferred financing fees | 35,821 | 164,125 |
Revaluation of preferred stock warrant liability | (301,294) | |
Loss (gain) on disposal of equipment | 167 | (2,500) |
Noncash portion of loss on early extinguishment of debt | 122,225 | |
Changes in assets and liabilities: | ||
Prepaid expenses and other current assets | (324,321) | (486,401) |
Accounts payable and accrued expenses | 3,819,472 | 1,502,007 |
Deferred revenue | (2,000,000) | |
Interest payable | (278,620) | 30,118 |
Net cash used in operating activities | (27,244,719) | (10,687,028) |
Investing activities: | ||
Purchases of property and equipment | (238,579) | (186,735) |
Proceeds from disposal of property and equipment | 2,500 | |
Purchases of investments | (56,455,061) | (15,136,766) |
Sales of investments | 39,916,570 | 19,643,922 |
Net cash (used in) provided by investing activities | (16,777,070) | 4,322,921 |
Financing activities: | ||
Principal payments under debt facilities | (4,935,260) | (4,051,766) |
Payment of offering costs | (620,218) | (924,846) |
Settlement of restricted stock | (1,910,101) | |
Proceeds from the issuance of common stock, net of repurchases | 38,925,704 | 51,204,759 |
Net cash provided by financing activities | 31,460,125 | 46,228,147 |
Net (decrease) increase in cash and cash equivalents | (12,561,664) | 39,864,040 |
Cash and cash equivalents at beginning of period | 29,494,755 | 21,155,247 |
Cash and cash equivalents at end of period | 16,933,091 | 61,019,287 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 395,459 | $ 572,149 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2015 | |
Organization | |
Organization | 1. Organization Vitae Pharmaceuticals, Inc. (“Vitae” or the “Company”) is a clinical-stage biotechnology company focused on discovering and developing novel, small molecule drugs for diseases where there are significant unmet medical needs. The Company is developing a robust and growing portfolio of novel product candidates internally generated by Contour ® , its proprietary structure-based drug discovery platform. The Company has a portfolio that includes several wholly-owned product candidates in various stages of development and a partnered product candidate in the clinic. The Company’s most advanced, wholly-owned product candidate is VTP-43742 for the treatment of autoimmune disorders, which is advancing in Phase 1 clinical development with the intent to develop it for moderate to severe psoriasis as the initial, lead indication. The Company has two other wholly-owned product candidates, VTP-38543 for the treatment of atopic dermatitis, which is in preclinical development and VTP-38443 for the treatment of acute coronary syndrome, to which the Company has decided to no longer allocate current resources for development based on the other priorities of its product portfolio. The Company intends to advance and retain rights to these and other programs and product candidates that the Company believes it can develop and commercialize, and to strategically partner where doing so can accelerate the program and generate non-dilutive capital for Vitae. The Company’s most advanced product candidate is BI187004/VTP-34072 (“BI187004”), which is in a Phase 2 clinical trial for the treatment of type 2 diabetes, and is being developed under a Research Collaboration and License Agreement with Boehringer Ingelheim GmbH (“BI”) that was entered into in October 2007 (the “11β Agreement”). The Company also has a product candidate, VTP-36951, in pre-clinical development for the treatment and prevention of Alzheimer’s disease, or Alzheimer’s. VTP-36951was being developed exclusively by BI as BI 1147560 pursuant to a Research Collaboration and License Agreement with BI that was entered into in June 2009 (the “BACE Agreement”). On July 23, 2015, BI notified the Company that it was terminating the BACE Agreement, effective as of October 21, 2015, for strategic business reasons. On October 21, 2015, in connection with the termination of the BACE Agreement, the Company received the rights to the BACE program, including VTP-36951, which includes, among other rights, certain exclusive rights to develop and commercialize the terminated products for the treatment of Alzheimer’s, diabetes and the other indications covered by the BACE Agreement. The Company continues to assess the BACE program to determine appropriate next steps. The collaborations with BI, including the BACE Agreement, have provided the Company with an aggregate of $158 million in funding as of September 30, 2015, including $30 million from sales of the Company’s equity securities and $128 million in upfront license fees, research funding and success-based milestones. Vitae is currently pursuing the following strategies: advance its growing portfolio of product candidates, establish late-stage development and commercialization capabilities for certain of the Company’s product candidates in the U.S. and potentially other markets, selectively collaborate with large biotechnology and pharmaceutical companies to maximize the value of the Company’s product candidates, leverage Contour to rapidly discover novel small molecule product candidates for additional validated, difficult-to-drug targets, and continue investing in technology, people and intellectual property. As of September 30, 2015, the Company had cash, cash equivalents and marketable securities of approximately $69.3 million. Based on the Company’s current operating plan, which as of now does not include any expenses relating to further development of the BACE program, the Company believes that its existing cash, cash equivalents and marketable securities will be sufficient to fund its projected operating requirements through the end of 2016. The Company intends to assess the BACE program and revise its operating plan accordingly after determining the appropriate next steps. The Company will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of the Company’s planned research and development activities and further potential development of the BACE program. The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations. The Company is subject to a number of risks similar to other life sciences companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company’s products. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are unaudited. The interim unaudited financial statements have been prepared on the same basis as the financial statements as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (“Annual Report on Form 10-K”). In the opinion of management, the accompanying financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2015 and the results of its operations, comprehensive loss and cash flows for the three and nine months ended September 30, 2015 and 2014. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period. The information contained in the accompanying financial statements and the notes thereto should be read in conjunction with the financial statements and notes thereto as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K. Fair Value of Financial Instruments At September 30, 2015 and December 31, 2014, the Company’s financial instruments included cash and cash equivalents, restricted cash, marketable securities, accounts payable, and accrued expenses and also included notes payable at December 31, 2014. The carrying amounts reported in the Company’s financial statements for cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. The Company’s short- and long-term marketable securities are carried at fair value based on quoted market prices and other observable inputs. Notes payable approximated fair value because the interest rate was reflective of the rate the Company could obtain on debt with similar terms and conditions. The Company determines the estimated fair value of financial instruments using available market information and management’s estimates. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. Deferred Offering Costs Generally, deferred offering costs consist of legal, accounting, and printing fees incurred in connection with offerings of the Company’s equity securities, and are capitalized when incurred. In connection with the Company’s January 2015 underwritten public offering of common stock, deferred offering costs totaling $0.2 million were recognized in the balance sheet as of December 31, 2014. Preferred Stock Warrants Prior to the Company’s initial public offering (“IPO”) in September 2014, the Company’s preferred stock warrants were recognized in the balance sheet as liabilities in accordance with the guidance for accounting for certain financial instruments with characteristics of both liabilities and equity as the warrants entitled the holder to purchase preferred stock that was considered contingently redeemable. The fair value of the preferred stock warrant liability was re-measured at the end of each reporting period, and any changes in fair value were recognized in the Statements of Operations as other income or expense. Upon the closing of the IPO, the preferred stock warrants were, in accordance with their terms, automatically converted into warrants to purchase common stock, which resulted in the reclassification of the preferred stock warrant liability to additional paid-in capital and gain or loss recognition for changes in fair value was discontinued. Net Income Per Common Share Prior to the Company’s IPO in September 2014, the Company used the two-class method to compute net income per common share because the Company had outstanding securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings of the Company. The two-class method requires earnings available to common stockholders for the period, after an allocation of earnings to participating securities, to be allocated between common and participating securities based upon their respective rights to receive distributed and undistributed earnings. Each series of the Company’s convertible preferred stock were entitled to receive annual non-cumulative dividends that ranged from $0.60 - $1.66 per share, payable prior and in preference to dividends paid to holders of common stock when and if declared by the Company’s board of directors. In the event a dividend was paid on common stock, holders of preferred stock were entitled to a proportionate share of any such dividend as if they were holders of common shares (on an as-if converted basis). For periods with net income prior to the IPO, net income per common share information was computed using the two-class method. Under the two-class method, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Basic net income attributable to common stockholders is computed by an adjustment to subtract from net income the portion of current year earnings that the preferred stockholders would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the convertible preferred shares had no obligation to fund losses. Diluted net income per common share is computed by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to common stock, the dilutive effects of stock options, restricted stock units, and warrants. Potential dilutive shares consist of incremental common stock issuable upon the exercise of stock options and warrants. Basic and dilutive computations are the same in periods with net losses attributable to common stockholders as the dilutive effects of stock options, restricted stock units and warrants would be antidilutive. Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers . ASU 2014-09 will supersede and replace nearly all existing U.S. GAAP revenue recognition guidance, including industry-specific guidance. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods therein. The Company is evaluating ASU 2014-09 and has not yet determined what, if any, effect ASU 2014-09 will have on its results of operations or financial condition. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern . ASU 2014-15 requires management of all entities to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued, and to make certain disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 is effective for the Company for annual reporting periods beginning in 2016 and for interim reporting periods starting in the first quarter of 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on its financial statements. |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 3. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic and diluted net loss per common share calculation: Net loss $ ) $ ) $ ) $ ) Less: Undistributed earnings allocated to participating securities — — — — Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Weighted-average number of common shares: Basic and diluted Net loss per common share: Basic and diluted $ ) $ ) $ ) $ ) The following outstanding securities at September 30, 2015 and 2014 have been excluded from the computation of diluted weighted shares outstanding, as their effects on net loss per share would have been anti-dilutive: September 30, 2015 2014 Stock options Employee stock purchase plan — Warrants Total |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Expenses | |
Accrued Expenses | 4. Accrued Expenses At September 30, 2015 and December 31, 2014, accrued expenses consisted of the following: September 30, December 31, 2015 2014 Payroll and related costs $ $ Research and development related costs Offering costs — Legal and accounting related costs Other Total $ $ |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 5. Fair Value Measurements The Company measures certain assets and liabilities at fair value in accordance with Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures . ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: · Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. · Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. The Company’s Level 1 assets included money market funds and certificates of deposit (“CD”). Level 2 assets included U.S. government agency securities and corporate debt securities. The following fair value hierarchy tables present information about each major category of financial assets measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014: Fair Value Measurements as of September 30, 2015 Using Level 1 Level 2 Level 3 Balance as of September 30, 2015 Assets Money market funds $ $ — $ — $ Other cash equivalents — Cash-restricted, CD — — Marketable securities, available-for-sale — — Total assets $ $ $ — $ Fair Value Measurements as of December 31, 2014 Using Level 1 Level 2 Level 3 Balance as of December 31, 2014 Assets Money market funds $ $ — $ — $ Other cash equivalents — Cash-restricted, CD — — Marketable securities, available-for-sale — — Total assets $ $ $ — $ |
Investments
Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments | |
Investments | 6. Investments Marketable Securities Marketable securities consisted of the following as of September 30, 2015 and December 31, 2014: Cost Basis Unrealized Gains Unrealized Losses Fair Value September 30, 2015 Corporate notes and bonds $ $ $ ) $ Total marketable securities $ $ $ ) $ December 31, 2014 Corporate notes and bonds $ $ $ ) $ Total marketable securities $ $ $ ) $ As of September 30, 2015, the Company’s marketable securities had maturities that were less than one year. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Notes Payable | |
Notes Payable | 7. Notes Payable Silicon Valley Bank and Oxford Finance LLC.—2011 Credit Facility In December 2011, the Company entered into a $15 million senior secured credit facility with Silicon Valley Bank and Oxford Finance LLC. (together, the “Lenders”) and drew-down all funds at that time. In connection with the credit facility, the Company issued to the Lenders 10-year warrants to purchase an aggregate of 29,889 shares of Series D preferred stock with an exercise price of $27.60 per share. The Series D preferred stock warrants were immediately converted into warrants to purchase common stock upon the closing of the Company’s IPO. Upon issuance, the estimated fair value of the preferred stock warrants was $680,625 determined using the Black-Scholes option pricing model and was recorded as a debt discount, which subsequently accreted to interest expense over the term of the loan. On February 27, 2015, the Company repaid the outstanding balance of the 2011 credit facility. The total payoff was $4,342,855, which included prepayment and other additional fees of $84,453. The Company had $20,852 of deferred financing fees and $101,373 of unamortized debt discount as of the payoff date. The debt repayment was accounted for as an extinguishment as per ASC 470-50, Debt: Modifications and Extinguishments , and a loss on extinguishment of debt totaling $206,678 was recorded in the nine months ended September 30, 2015, consisting of the unamortized deferred financing, unamortized debt discount and prepayment and other additional fees. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity Common Stock On September 29, 2014, the Company closed its IPO, in which it issued and sold 6,875,000 shares of common stock at a price of $8.00 per share, for aggregate gross proceeds of $55.0 million. On October 27, 2014, the underwriters of the Company’s IPO exercised in full their over-allotment option and the Company issued and sold an additional 1,031,250 shares of common stock at the IPO price of $8.00 per share, for aggregate gross proceeds of $8.3 million. Total net proceeds for the IPO, including the underwriters’ exercise of their over-allotment option, was $56.4 million, after deducting underwriting discounts and commissions and other offering expenses. On January 28, 2015, the Company issued and sold a total of 3,450,000 shares of its common stock at $11.90 per share in an underwritten public offering, including 450,000 shares of common stock sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. Net proceeds from the offering, including the sale of the additional shares, was approximately $38.0 million, after deducting underwriting discounts and commissions and other offering expenses. Preferred Stock In connection with the IPO, the Company filed an Amended and Restated Certificate of Incorporation that established the preferred stock the Company was authorized to issue. As of September 30, 2015, the Company had authorized 15,000,000 shares of preferred stock at $0.0001 par value. There were no shares of preferred stock issued or outstanding as of September 30, 2015. Treasury Stock In connection with cashless employee stock option exercises for the nine months ended September 30, 2015, employees tendered 211 shares of common stock with a fair value of $2,324 to the Company as consideration for the exercise price. Treasury stock is recorded using the cost method. Treasury stock retirements are recorded by deducting the par value from common stock and charging the remaining excess of cost over par to accumulated deficit. Warrants Series D preferred stock warrants were immediately converted into common stock warrants upon the closing of the Company’s IPO. As of September 30, 2015, the Company had warrants outstanding for the purchase of 45,468 shares of common stock at exercise prices ranging from $20.70 - $27.60. The following table summarizes the warrants outstanding and exercisable as of September 30, 2015: Warrants to Purchase Shares Exercise Price Expiration Date Common stock $ 07/12/2016 Common stock $ 08/28/2018 Common stock $ 12/21/2021 Shares Reserved for Future Issuance At September 30, 2015, the Company’s shares of common stock reserved for future issuance were: Common stock options outstanding Shares available for future grant under employee compensation plans Shares available through employee stock purchase plan Warrants |
Employee Compensation Plans
Employee Compensation Plans | 9 Months Ended |
Sep. 30, 2015 | |
Employee Compensation Plans | |
Employee Compensation Plans | 9. Employee Compensation Plans In July 2014, the Company’s Board of Directors approved the 2014 Stock Plan (the “2014 Plan”) and reserved to be authorized for issuance under the 2014 Plan the sum of (1) 1,782,500 shares of the Company’s common stock, (2) the number of shares of the Company’s common stock reserved under the Predecessor Plans (as defined below) that are not issued or subject to outstanding awards under the Predecessor Plans as of the closing of the Company’s IPO and (3) any shares of the Company’s common stock which are subject to outstanding options under the Predecessor Plans as of the closing of the Company’s IPO that subsequently expire or lapse unexercised or are subsequently forfeited to or repurchased by the Company, provided that the shares reserved under clauses (2) and (3) above shall include no more than 1,070,687 shares of the Company’s common stock. Under the 2014 Plan, options to purchase common stock, restricted stock and restricted stock units may be granted to the Company’s employees, nonemployee directors, and consultants providing services to the Company. The aggregate number of shares of the Company’s common stock reserved for issuance under the 2014 Plan shall automatically be increased on the first business day of each of the Company’s fiscal years by a number equal to the smallest of (i) 4% of the total number of shares of the Company’s common stock actually issued and outstanding on the last business day of the prior fiscal year (excluding any rights to purchase shares of the Company’s common stock that may be outstanding, such as options or warrants), (ii) 1,426,000 shares of the Company’s common stock or (iii) a number of shares of Common Stock determined by the Company’s board of directors. As of January 1, 2015, the number of shares of common stock that may be issued under the 2014 Plan was automatically increased by 721,076 shares. As of September 30, 2015, there are 2,032,274 shares available for grant without restriction. The Company has three additional share-based compensation plans pursuant to which outstanding awards have been made, but from which no further awards can or will be made: (i) the 2001 Stock Plan (the “2001 Plan”); (ii) the 2004 Stock Plan (the “2004 Plan”); and the 2013 Stock Plan (the “2013 Plan”, and collectively with the 2001 Plan and the 2004 Plan, the “Predecessor Plans”). The cost of stock-based compensation awards are determined based on the grant-date fair value, net of the effects of estimated forfeitures of the awards, and is recognized into expense over the award’s service period. Stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 was recognized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ $ $ $ General and administrative Total stock-based compensation $ $ $ $ Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ $ $ $ Employee stock purchase plan — — Total stock-based compensation $ $ $ $ Stock Options All options granted under the Plans were granted with exercise prices equal to or above the fair market value of the Company’s common stock on the date of grant. Options granted under the Plans vest over a time period or based on performance milestones established at the sole discretion of the Company’s board of directors or its compensation committee. Vesting for time-based options generally occurs over a period of not greater than four years. All stock options expire no later than ten years from the grant date. Under the terms of the Plans, employees may use shares to exercise a portion of these options. Shares tendered for this purpose are valued at the fair market value as of the date the options are exercised. The following table summarizes stock option activity under the Plans from January 1, 2015 through September 30, 2015: Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Life (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2015 $ Granted $ Exercised ) $ Expired ) $ Forfeited ) $ Outstanding, September 30, 2015 $ $ Exercisable, September 30, 2015 $ $ Vested and Expected to Vest, September 30, 2015 $ The Company granted 303,559 performance-based stock options to employees in March 2011. These performance options have a 10-year life and exercise prices equal to the fair value of the Company’s stock at the grant date. Vesting of no more than 60% of these performance options is dependent on (i) meeting certain performance conditions, which relate to the Company’s research and development progress, which were established by the Company’s board of directors and (ii) the passage of time subsequent to the achievement of such performance conditions. Vesting of no more than 40% of these performance options is dependent on (i) meeting certain performance conditions, which relate to a deemed liquidation of the Company, an IPO or consummation of a strategic transaction, which were established by the Company’s board of directors and (ii) the passage of time subsequent to the achievement of such performance conditions. The Company’s board of directors determines if the performance conditions have been met. Stock-based compensation expense for these options is recorded when management estimates that the vesting of these options is probable based on the status of the Company’s research and development programs and other relevant factors. For the three months ended September 30, 2015, the vesting of 55,251 performance-based stock options was deemed probable and stock-based compensation expense was recorded ratably over the service period associated with the performance condition. As of September 30, 2015, a total of 165,939 performance-based stock options had been deemed probable. Any change in these estimates will result in a cumulative adjustment in the period in which the estimate is changed, so that as of the end of a period, the cumulative compensation expense recognized for an award or grant equals the amount that would be recognized on a straight-line basis as if the current estimates had been utilized since the beginning of the service period. The Company uses the Black-Scholes valuation model to estimate the fair value of stock options at the grant date. The Black-Scholes valuation model requires the Company to make certain estimates and assumptions, including assumptions related to the expected price volatility of the Company’s stock, the period during which the options will be outstanding, the rate of return on risk- free investments, and the expected dividend yield for the Company’s stock. The fair values of stock options granted during the nine months ended September 30, 2015 and 2014 were calculated using the following weighted-average assumptions: Nine Months Ended September 30, 2015 2014 Weighted-average risk-free interest rate % % Expected term of options (in years) Expected stock price volatility % % Expected dividend yield % % The weighted average fair value of options granted during the nine months ended September 30, 2015 and 2014 was $8.32 and $4.08 per share, respectively. The weighted-average valuation assumptions for all stock-based awards were determined as follows: · Weighted-average risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. · Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The expected term of the options granted is derived using the “simplified” method, as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment . · Expected stock price volatility: The expected volatility is based on historical stock price volatilities of similar entities within the Company’s industry over the period that is commensurate with the expected term of the option. · Expected dividend yield: The estimate for annual dividends is $0.00, because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend. The total cash received from employees as a result of employee stock option exercises during the nine months ended September 30, 2015 and 2014 was $334,004 and $54,759, respectively. As of September 30, 2015, excluding performance-based stock options that have not been deemed probable, the aggregate unrecognized stock-based compensation expense related to unvested options granted under the Stock Plans that were expected to vest was $6,268,079. That expense is expected to be recognized as follows: Year ending December 31, 2015 $ 2016 2017 2018 2019 $ The aggregate estimated fair value of options for which the satisfaction of the related-performance conditions have not been deemed probable was $546,951 as of September 30, 2015. Restricted Stock Units (“RSU”) During 2013, the Company awarded a performance-based RSU covering 391,304 shares of common stock from the 2013 Plan. An RSU award entitles the holder to receive shares of the Company’s common stock as the award vests. Vesting of the performance-based RSU was contingent upon the achievement of pre-determined performance-based milestones, as determined by the Company’s board of directors or its compensation committee. During the year ended December 31, 2014, it was determined that the performance-based milestones on the RSU were met and the award was fully vested. Under settlement procedures applicable to the performance-based RSU, which was held by the Company’s chief executive officer, the Company was required to deliver the underlying 391,304 shares on March 13, 2015. On the settlement date, the Company net settled the award by delivering approximately 220,148 shares of its common stock to its chief executive officer and withholding approximately 171,156 shares of common stock to satisfy income taxes at the applicable minimum statutory rate. In connection with the net settlement, the Company remitted the $1,910,101 tax liability on behalf of its chief executive officer to the relevant tax authorities in cash. Employee Stock Purchase Plan In July 2014, the Company established an Employee Stock Purchase Plan (the “Purchase Plan”). Under the Company’s Purchase Plan, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The Purchase Plan is administered by the compensation committee of the Company’s board of directors. Under the Purchase Plan, eligible employees may purchase stock at 85% of the lower of the fair market value of a share of the Company’s common stock on the first day of an offering period or on the purchase date. Eligible employees may contribute up to 15% of their eligible compensation. A participant may purchase a maximum of 2,100 shares of common stock per purchase period. Under the Purchase Plan, a participant may not accrue rights to purchase more than $25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding As of the first business day of each fiscal year of the Company during the term of the Purchase Plan, the aggregate number of shares that may be issued under the Purchase Plan shall automatically increase by a number equal to the least of (i) 1% of the total number of shares of the Company’s common stock actually issued and outstanding on the last business day of the prior fiscal year (excluding any rights to purchase shares of the Company’s common stock that may be outstanding, such as options or warrants), (ii) 356,500 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock determined by the Company’s board of directors. As of January 1, 2015, the number of shares of common stock that may be issued under the Purchase Plan was automatically increased by 180,269 shares, increasing the number of shares of common stock available for issuance under the Purchase Plan to 430,269 shares. Effective February 1, 2015, employees who elected to participate in the Purchase Plan commenced payroll withholdings that accumulate during the offering period that ends on October 31, 2015, at which time shares of the Company’s common stock will be purchased at 85% of the lower of the fair market value of our common shares on January 30 or October 30, 2015. In accordance with the guidance in ASC 718-50, the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the Purchase Plan is a compensatory plan under this guidance. Accordingly, stock-based compensation cost is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company has estimated the option’s fair value to be $5.43 using the Black-Scholes valuation model and recognized stock-based compensation expense of $48,031 and $133,922 in the three and nine months ended September 30, 2015, respectively. |
Collaborative Research Agreemen
Collaborative Research Agreements | 9 Months Ended |
Sep. 30, 2015 | |
Collaborative Research Agreements | |
Collaborative Research Agreements | 10. Collaborative Research Agreements Boehringer Ingelheim 11β HSD1 Inhibitors In October 2007, the Company entered into the 11β Agreement with BI pursuant to which BI is responsible for the development and commercialization of 11β HSD1 inhibitors for certain indications, including type 2 diabetes. The funded research period under the 11β Agreement for which the Company was required to provide research services ended in December 2009. In 2014, the Company received a $6.0 million milestone payment from BI as a result of the first patient having been dosed in the Phase 2 clinical trial which commenced in July 2014. The Company has earned $43 million in development milestones since the inception of the 11β Agreement and is eligible to receive up to $272 million in additional milestone payments based on the achievement of pre-specified events, including up to $42 million in development milestones, up to $105 million in regulatory milestones and up to $125 million in commercialization milestones. The preceding milestones are payable upon the first occurrence of any product to meet the contractual requirements. The Company is also eligible to receive 50% of the aforementioned milestone payments for any subsequent products and for any additional indications of a product to achieve those milestones. The Company has the right, subject to the approval of the joint steering committee established pursuant to the 11β Agreement, to develop and commercialize certain 11β HSD1 inhibitors for indications other than those considered part of metabolic syndrome or reduction of cardiovascular events. Beta-site Amyloid Precursor Protein-cleaving Enzyme 1 (BACE) Inhibitors In June 2009, the Company entered into the BACE Agreement with BI pursuant to which BI was responsible for the development and commercialization of BACE inhibitors for the treatment of Alzheimer’s disease and other forms of dementia. Under the BACE Agreement, the Company was obligated to provide 12 full-time-equivalent employees (FTE’s) per month for a period of 36 months to provide research services. Under the terms of the BACE Agreement, the Company received an upfront, license fee of $15 million. This payment was initially recorded to deferred revenue. In addition, under the BACE Agreement, BI was required to make payments for each quarter during the 36-month funded research period of $1,020,000 for a total of $12,240,000. The license fee and the research collaboration fee were being recognized as revenue over the 36-month funded research period commencing June 2009 and continuing through June 2012, which was determined to be the Company’s period of substantial involvement under the BACE Agreement. In April 2012, the initial research term was extended for an additional year through June 2013 and BI paid the Company an additional $2,960,000 for the research contributions over the 12 month extension period ($740,000 per quarter). During the extension period the Company was obligated to provide eight FTE’s per month. In December 2012, the Company amended the BACE Agreement to expand the core indication definition to include certain other indications, including diabetes and metabolic syndrome. Under the terms of the amendment, Vitae received an upfront fee of $4 million. In accordance with the amendment, the Company was obligated to provide 12 months of research services commencing June 2013 with such services to be completed no later than June 30, 2014. Revenue relating to the upfront payment was recognized over the period in which future research contributions were delivered through June 30, 2014 including $2.0 million that was recognized in the nine months ended September 30, 2014. The Company has earned $29 million in development milestones since the inception of the BACE Agreement. On July 23, 2015, BI notified the Company that it was terminating the BACE Agreement, effective as of October 21, 2015, for strategic business reasons. On October 21, 2015, in connection with the termination of the BACE Agreement, the Company received the rights to the BACE program, including VTP-36951, which includes, among other rights, certain exclusive rights to develop and commercialize the terminated products for the treatment of Alzheimer’s, diabetes and the other indications covered by the BACE Agreement. Under the BACE Agreement, no material payments were required to be made by or to the Company in connection with the termination of the agreement. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | 11. Income Taxes For the three and nine months ended September 30, 2015 and 2014, the Company did not record a current or deferred income tax expense or benefit. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of operating losses, the Company has concluded that it is not more likely than not that the benefit of its deferred tax assets will be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of September 30, 2015 and December 31, 2014. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions A member of the Company’s Board is a partner/founder of a law firm that provided various legal services to the Company. The Company has incurred costs of $75,065 and $547,841 for the three months ended September 30, 2015 and 2014, respectively, and $368,071 and $1,138,938 for the nine months ended September 30, 2015 and 2014, respectively. Additionally, $46,116 and $128,755 was due to the related party as of September 30, 2015 and December 31, 2014, respectively. BI, the Company’s collaborative research partner (Note 10), is also an affiliate of a stockholder of the Company. |
Basis of Presentation and Sum19
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are unaudited. The interim unaudited financial statements have been prepared on the same basis as the financial statements as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (“Annual Report on Form 10-K”). In the opinion of management, the accompanying financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2015 and the results of its operations, comprehensive loss and cash flows for the three and nine months ended September 30, 2015 and 2014. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period. The information contained in the accompanying financial statements and the notes thereto should be read in conjunction with the financial statements and notes thereto as of and for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments At September 30, 2015 and December 31, 2014, the Company’s financial instruments included cash and cash equivalents, restricted cash, marketable securities, accounts payable, and accrued expenses and also included notes payable at December 31, 2014. The carrying amounts reported in the Company’s financial statements for cash and cash equivalents, restricted cash, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. The Company’s short- and long-term marketable securities are carried at fair value based on quoted market prices and other observable inputs. Notes payable approximated fair value because the interest rate was reflective of the rate the Company could obtain on debt with similar terms and conditions. The Company determines the estimated fair value of financial instruments using available market information and management’s estimates. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. |
Deferred Offering Costs | Deferred Offering Costs Generally, deferred offering costs consist of legal, accounting, and printing fees incurred in connection with offerings of the Company’s equity securities, and are capitalized when incurred. In connection with the Company’s January 2015 underwritten public offering of common stock, deferred offering costs totaling $0.2 million were recognized in the balance sheet as of December 31, 2014. |
Preferred Stock Warrants | Preferred Stock Warrants Prior to the Company’s initial public offering (“IPO”) in September 2014, the Company’s preferred stock warrants were recognized in the balance sheet as liabilities in accordance with the guidance for accounting for certain financial instruments with characteristics of both liabilities and equity as the warrants entitled the holder to purchase preferred stock that was considered contingently redeemable. The fair value of the preferred stock warrant liability was re-measured at the end of each reporting period, and any changes in fair value were recognized in the Statements of Operations as other income or expense. Upon the closing of the IPO, the preferred stock warrants were, in accordance with their terms, automatically converted into warrants to purchase common stock, which resulted in the reclassification of the preferred stock warrant liability to additional paid-in capital and gain or loss recognition for changes in fair value was discontinued. |
Net Income Per Common Share | Net Income Per Common Share Prior to the Company’s IPO in September 2014, the Company used the two-class method to compute net income per common share because the Company had outstanding securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings of the Company. The two-class method requires earnings available to common stockholders for the period, after an allocation of earnings to participating securities, to be allocated between common and participating securities based upon their respective rights to receive distributed and undistributed earnings. Each series of the Company’s convertible preferred stock were entitled to receive annual non-cumulative dividends that ranged from $0.60 - $1.66 per share, payable prior and in preference to dividends paid to holders of common stock when and if declared by the Company’s board of directors. In the event a dividend was paid on common stock, holders of preferred stock were entitled to a proportionate share of any such dividend as if they were holders of common shares (on an as-if converted basis). For periods with net income prior to the IPO, net income per common share information was computed using the two-class method. Under the two-class method, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Basic net income attributable to common stockholders is computed by an adjustment to subtract from net income the portion of current year earnings that the preferred stockholders would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the convertible preferred shares had no obligation to fund losses. Diluted net income per common share is computed by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to common stock, the dilutive effects of stock options, restricted stock units, and warrants. Potential dilutive shares consist of incremental common stock issuable upon the exercise of stock options and warrants. Basic and dilutive computations are the same in periods with net losses attributable to common stockholders as the dilutive effects of stock options, restricted stock units and warrants would be antidilutive. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers . ASU 2014-09 will supersede and replace nearly all existing U.S. GAAP revenue recognition guidance, including industry-specific guidance. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods therein. The Company is evaluating ASU 2014-09 and has not yet determined what, if any, effect ASU 2014-09 will have on its results of operations or financial condition. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern . ASU 2014-15 requires management of all entities to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued, and to make certain disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 is effective for the Company for annual reporting periods beginning in 2016 and for interim reporting periods starting in the first quarter of 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on its financial statements. |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Net Loss Per Common Share | |
Schedule of computation of basic and diluted net loss per common share | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic and diluted net loss per common share calculation: Net loss $ ) $ ) $ ) $ ) Less: Undistributed earnings allocated to participating securities — — — — Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Weighted-average number of common shares: Basic and diluted Net loss per common share: Basic and diluted $ ) $ ) $ ) $ ) |
Schedule of outstanding securities excluded from the computation of diluted weighted shares outstanding, as their effects on net loss per share would have been anti dilutive | September 30, 2015 2014 Stock options Employee stock purchase plan — Warrants Total |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Expenses | |
Schedule of accrued expenses | September 30, December 31, 2015 2014 Payroll and related costs $ $ Research and development related costs Offering costs — Legal and accounting related costs Other Total $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Schedule of major category of financial assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements as of September 30, 2015 Using Level 1 Level 2 Level 3 Balance as of September 30, 2015 Assets Money market funds $ $ — $ — $ Other cash equivalents — Cash-restricted, CD — — Marketable securities, available-for-sale — — Total assets $ $ $ — $ Fair Value Measurements as of December 31, 2014 Using Level 1 Level 2 Level 3 Balance as of December 31, 2014 Assets Money market funds $ $ — $ — $ Other cash equivalents — Cash-restricted, CD — — Marketable securities, available-for-sale — — Total assets $ $ $ — $ |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments | |
Schedule of marketable securities | Cost Basis Unrealized Gains Unrealized Losses Fair Value September 30, 2015 Corporate notes and bonds $ $ $ ) $ Total marketable securities $ $ $ ) $ December 31, 2014 Corporate notes and bonds $ $ $ ) $ Total marketable securities $ $ $ ) $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity | |
Summary of warrants outstanding and exercisable | The following table summarizes the warrants outstanding and exercisable as of September 30, 2015: Warrants to Purchase Shares Exercise Price Expiration Date Common stock $ 07/12/2016 Common stock $ 08/28/2018 Common stock $ 12/21/2021 |
Schedule of shares of common stock reserved for future issuance | At September 30, 2015, the Company’s shares of common stock reserved for future issuance were: Common stock options outstanding Shares available for future grant under employee compensation plans Shares available through employee stock purchase plan Warrants |
Employee Compensation Plans (Ta
Employee Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Employee Compensation Plans | |
Schedule of stock-based compensation expense recognized | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ $ $ $ General and administrative Total stock-based compensation $ $ $ $ Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ $ $ $ Employee stock purchase plan — — Total stock-based compensation $ $ $ $ |
Summary of stock option activity under the Plans | Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Life (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2015 $ Granted $ Exercised ) $ Expired ) $ Forfeited ) $ Outstanding, September 30, 2015 $ $ Exercisable, September 30, 2015 $ $ Vested and Expected to Vest, September 30, 2015 $ |
Schedule of weighted-average assumptions used for calculating fair values of stock options granted | Nine Months Ended September 30, 2015 2014 Weighted-average risk-free interest rate % % Expected term of options (in years) Expected stock price volatility % % Expected dividend yield % % |
Schedule of total unrecognized compensation expense, excluding performance based stock options that have not been deemed probable, net of estimated forfeitures, related to unvested options granted under the Stock Plans expected to be recognized | Year ending December 31, 2015 $ 2016 2017 2018 2019 $ |
Organization (Details)
Organization (Details) $ in Millions | Sep. 30, 2015USD ($) |
Organization | |
Cash, cash equivalents and short-term investments | $ 69.3 |
BI | |
Organization | |
Funding provided by counterparty including sale of the Company's equity securities and upfront license fees, research funding and success based milestone payments | 158 |
Funding provided by the counterparty from sale of the Company's equity securities | 30 |
Funding provided by counterparty from upfront license fees, research funding and success based milestone payments | $ 128 |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Convertible preferred stock | 9 Months Ended |
Sep. 30, 2015$ / shares | |
Minimum | |
Net Income Per Common Share | |
Annual rate of noncumulative dividends on preferred stock (in dollars per share) | $ 0.60 |
Maximum | |
Net Income Per Common Share | |
Annual rate of noncumulative dividends on preferred stock (in dollars per share) | $ 1.66 |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies (Details 2) | Dec. 31, 2014USD ($) |
Deferred Offering Costs | |
Deferred Offering Costs | $ 207,743 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic and diluted net loss per common share calculation: | ||||
Net loss | $ (13,065,556) | $ (1,809,418) | $ (32,533,980) | $ (11,828,468) |
Net loss attributable to common stockholders | $ (13,065,556) | $ (1,809,418) | $ (32,533,980) | $ (11,828,468) |
Weighted average number of common shares: | ||||
Basic and diluted | 21,853,350 | 1,711,969 | 21,483,233 | 971,439 |
Net loss per common share: | ||||
Basic and diluted | $ (0.60) | $ (1.06) | $ (1.51) | $ (12.18) |
Net Loss Per Common Share (De30
Net Loss Per Common Share (Details 2) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Net Loss Per Common Share | ||
Potential common shares not reflected in diluted net income per share as the effect would be antidilutive | 2,106,862 | 1,533,642 |
Stock options | ||
Net Loss Per Common Share | ||
Potential common shares not reflected in diluted net income per share as the effect would be antidilutive | 2,032,879 | 1,488,174 |
Employee Stock Purchase Plan | ||
Net Loss Per Common Share | ||
Potential common shares not reflected in diluted net income per share as the effect would be antidilutive | 28,515 | |
Warrants | ||
Net Loss Per Common Share | ||
Potential common shares not reflected in diluted net income per share as the effect would be antidilutive | 45,468 | 45,468 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accrued Expenses | ||
Payroll and related costs | $ 1,603,426 | $ 1,710,439 |
Research and development related costs | 2,407,263 | 760,961 |
Offering costs | 207,743 | |
Legal and accounting related costs | 252,635 | 264,959 |
Other | 240,287 | 195,619 |
Total | $ 4,503,611 | $ 3,139,721 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Measurements | ||
Assets | $ 68,917,422 | $ 63,867,746 |
Money market funds | ||
Fair Value Measurements | ||
Assets | 15,823,887 | 25,664,911 |
Other cash equivalents | ||
Fair Value Measurements | ||
Assets | 500,320 | 2,179,290 |
Cash restricted, CD | ||
Fair Value Measurements | ||
Assets | 200,000 | 200,000 |
Marketable securities, available-for-sale | ||
Fair Value Measurements | ||
Assets | 52,393,215 | 35,823,545 |
Level 1 | ||
Fair Value Measurements | ||
Assets | 16,023,887 | 25,864,911 |
Level 1 | Money market funds | ||
Fair Value Measurements | ||
Assets | 15,823,887 | 25,664,911 |
Level 1 | Cash restricted, CD | ||
Fair Value Measurements | ||
Assets | 200,000 | 200,000 |
Level 2 | ||
Fair Value Measurements | ||
Assets | 52,893,535 | 38,002,835 |
Level 2 | Other cash equivalents | ||
Fair Value Measurements | ||
Assets | 500,320 | 2,179,290 |
Level 2 | Marketable securities, available-for-sale | ||
Fair Value Measurements | ||
Assets | $ 52,393,215 | $ 35,823,545 |
Investments (Details)
Investments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Marketable Securities | ||
Cost Basis | $ 52,400,747 | $ 35,862,357 |
Unrealized Gains | 7,755 | 573 |
Unrealized Losses | (15,287) | (39,385) |
Total | 52,393,215 | 35,823,545 |
Corporate notes and bonds | ||
Marketable Securities | ||
Cost Basis | 52,400,747 | 35,862,357 |
Unrealized Gains | 7,755 | 573 |
Unrealized Losses | (15,287) | (39,385) |
Total | $ 52,393,215 | $ 35,823,545 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Feb. 27, 2015 | Dec. 31, 2011 | Sep. 30, 2015 |
Notes Payable | |||
Number of shares of preferred stock that can be purchased by warrants | 45,468 | ||
Loss on debt extinguishment | $ 206,678 | ||
Series D preferred stock warrants | |||
Notes Payable | |||
Warrants term | 10 years | ||
Number of shares of preferred stock that can be purchased by warrants | 29,889 | ||
Exercise price of warrants (in dollars per share) | $ 27.60 | ||
Estimated fair value of the preferred stock warrants | $ 680,625 | ||
Senior notes | Secured debt | 2011 Credit Facility | |||
Notes Payable | |||
Maximum borrowing capacity | $ 15,000,000 | ||
Total payoff | $ 4,342,855 | ||
Prepayment and other additional fees | 84,453 | ||
Deferred financing fees | 20,852 | ||
Unamortized debt discount | $ 101,373 | ||
Loss on debt extinguishment | $ 206,678 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Common stock - USD ($) $ / shares in Units, $ in Millions | Jan. 28, 2015 | Oct. 27, 2014 | Sep. 29, 2014 | Oct. 27, 2014 |
IPO | ||||
Common Stock | ||||
Issuance of common stock (in shares) | 6,875,000 | |||
Share price (in dollars per share) | $ 8 | |||
Gross proceeds from issuance | $ 55 | |||
Over-allotment option | ||||
Common Stock | ||||
Issuance of common stock (in shares) | 1,031,250 | |||
Share price (in dollars per share) | $ 8 | $ 8 | ||
Gross proceeds from issuance | $ 8.3 | |||
IPO and over-allotment option | ||||
Common Stock | ||||
Net proceeds from issuance | $ 56.4 | |||
Follow-on offering | ||||
Common Stock | ||||
Issuance of common stock (in shares) | 3,450,000 | |||
Share price (in dollars per share) | $ 11.90 | |||
Net proceeds from issuance | $ 38 | |||
Follow-on offering underwriters option | ||||
Common Stock | ||||
Issuance of common stock (in shares) | 450,000 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Preferred Stock | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
Treasury Stock | |
Treasury shares acquired (in shares) | 211 |
Fair value of common stock | $ | $ 2,324 |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) | Sep. 30, 2015$ / sharesshares |
Warrants | |
Warrants Outstanding (in shares) | shares | 45,468 |
Warrant to purchase common stock, expiring on 07/12/2016 | |
Warrants | |
Warrants Outstanding (in shares) | shares | 1,449 |
Exercise Price (in dollars per share) | $ 20.70 |
Warrant to purchase common stock, expiring on 08/28/2018 | |
Warrants | |
Warrants Outstanding (in shares) | shares | 14,130 |
Exercise Price (in dollars per share) | $ 27.60 |
Warrant to purchase common stock, expiring on 12/21/2021 | |
Warrants | |
Warrants Outstanding (in shares) | shares | 29,889 |
Exercise Price (in dollars per share) | $ 27.60 |
Minimum | |
Warrants | |
Exercise Price (in dollars per share) | 20.70 |
Maximum | |
Warrants | |
Exercise Price (in dollars per share) | $ 27.60 |
Stockholders' Equity (Details 5
Stockholders' Equity (Details 5) | Sep. 30, 2015shares |
Stockholders' Equity | |
Common stock options outstanding | 2,032,879 |
Shares available for future grant under employee compensation plans | 2,032,274 |
Shares available through employee stock purchase plan | 430,269 |
Warrants | 45,468 |
Common stock reserved for issuance | 4,540,890 |
Employee Compensation Plans (De
Employee Compensation Plans (Details) | Jan. 01, 2015shares | Jul. 31, 2014shares | Sep. 30, 2015itemshares |
Employee Compensation Plans | |||
Shares available for grant | 2,032,274 | ||
Number of additional share-based compensation plans | item | 3 | ||
2014 Stock Plan | |||
Employee Compensation Plans | |||
Common stock authorized for issuance (in shares) | 1,782,500 | ||
Number of shares reserved under clauses (2) and (3) | 1,070,687 | ||
Shares available for grant | 2,032,274 | ||
Automatic increase in shares reserved for issuance on first business day of each of fiscal year as a percentage of shares actually issued and outstanding on last business day of prior fiscal year | 4.00% | ||
Automatic increase in shares reserved for issuance on first business day of each of fiscal year | 1,426,000 | ||
Increase in shares authorized | 721,076 |
Employee Compensation Plans (41
Employee Compensation Plans (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Compensation Plans | ||||
Total stock-based compensation | $ 894,103 | $ 1,967,293 | $ 1,763,416 | $ 2,079,351 |
Research and development | ||||
Employee Compensation Plans | ||||
Total stock-based compensation | 369,893 | 207,911 | 743,470 | 214,628 |
General and administrative | ||||
Employee Compensation Plans | ||||
Total stock-based compensation | 524,210 | 1,759,382 | 1,019,946 | 1,864,723 |
Stock options | ||||
Employee Compensation Plans | ||||
Total stock-based compensation | 846,072 | $ 1,967,293 | 1,629,494 | $ 2,079,351 |
Employee Stock Purchase Plan | ||||
Employee Compensation Plans | ||||
Total stock-based compensation | $ 48,031 | $ 133,922 |
Employee Compensation Plans (42
Employee Compensation Plans (Details 3) - Maximum - Stock options | 9 Months Ended |
Sep. 30, 2015 | |
Employee Compensation Plans | |
Vesting period | 4 years |
Expiration period | 10 years |
Employee Compensation Plans (43
Employee Compensation Plans (Details 4) - Stock options | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 1,484,696 |
Granted (in shares) | shares | 758,771 |
Exercised (in shares) | shares | (173,398) |
Expired (in shares) | shares | (5,892) |
Forfeited (in shares) | shares | (31,298) |
Balance at the end of the period (in shares) | shares | 2,032,879 |
Exercisable, at the end of the period (in shares) | shares | 863,160 |
Vested and Expected to Vest, at the end of the period (in shares) | shares | 1,985,727 |
Weighted-Average Exercise Price | |
Balance at the beginning of the period (in dollars per share) | $ 4.8840 |
Granted (in dollars per share) | 12.0865 |
Exercised (in dollars per share) | 1.9396 |
Expired (in dollars per share) | 7.9313 |
Forfeited (in dollars per share) | 9.2052 |
Balance at the end of the period (in dollars per share) | 7.7481 |
Exercisable, at the end of the period (in dollars per share) | 4.7454 |
Vested and Expected to Vest, at the end of the period (in dollars per share) | $ 7.6881 |
Weighted-Average Contractual Life (in Years) | |
Outstanding | 6 years 9 months |
Exercisable | 3 years 10 months 28 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 8,111,475 |
Exercisable | $ | $ 5,397,550 |
Employee Compensation Plans (44
Employee Compensation Plans (Details 5) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2011 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Total unrecognized compensation expense, excluding performance based stock options that have not been deemed probable, net of estimated forfeitures, related to unvested options granted under the Stock Plans expected to be recognized | ||||
2,015 | $ 596,674 | $ 596,674 | ||
2,016 | 2,195,020 | 2,195,020 | ||
2,017 | 1,846,617 | 1,846,617 | ||
2,018 | 1,397,149 | 1,397,149 | ||
2,019 | 232,619 | 232,619 | ||
Total unrecognized compensation expense | $ 6,268,079 | $ 6,268,079 | ||
Stock options | ||||
Employee Compensation Plans | ||||
Awards granted (in shares) | 758,771 | |||
Weighted average fair value assumptions used to calculate fair values of stock options granted | ||||
Weighted average risk free interest rate (as a percent) | 1.74% | 1.98% | ||
Expected term of options | 6 years 1 month 24 days | 6 years 1 month 10 days | ||
Expected stock price volatility (as a percent) | 78.04% | 83.00% | ||
Estimate for annual dividends | $ 0 | |||
Weighted average fair value of options granted (in dollars per share) | $ 8.32 | $ 4.08 | ||
Total cash received from employees as a result of employee stock option exercises | $ 334,004 | $ 54,759 | ||
Stock options | Maximum | ||||
Employee Compensation Plans | ||||
Expiration period | 10 years | |||
Performance-based stock options granted to employees | ||||
Employee Compensation Plans | ||||
Awards granted (in shares) | 303,559 | |||
Expiration period | 10 years | |||
Total unrecognized compensation expense, excluding performance based stock options that have not been deemed probable, net of estimated forfeitures, related to unvested options granted under the Stock Plans expected to be recognized | ||||
Stock options deemed probable vested (in shares) | 55,251 | |||
Stock options deemed probable (in shares) | 165,939 | 165,939 | ||
Aggregate estimated fair value of options for which the satisfaction of the related performance conditions have not been deemed probable | $ 546,951 | $ 546,951 | ||
Performance-based stock options granted to employees | Performance conditions, which relate to the Company's research and development progress | Maximum | ||||
Employee Compensation Plans | ||||
Vesting percentage | 60.00% | |||
Performance-based stock options granted to employees | Performance conditions, which relate to deemed liquidation of the Company, an IPO or consummation of a strategic transaction | Maximum | ||||
Employee Compensation Plans | ||||
Vesting percentage | 40.00% |
Employee Compensation Plans (45
Employee Compensation Plans (Details 6) - USD ($) | Mar. 13, 2015 | Sep. 30, 2015 | Dec. 31, 2013 |
Employee Compensation Plans | |||
Tax liability remitted | $ 1,910,101 | ||
Restricted Stock Units | 2013 Plan | |||
Employee Compensation Plans | |||
RSUs awarded (in shares) | 391,304 | ||
Chief executive officer | Restricted Stock Units | 2013 Plan | |||
Employee Compensation Plans | |||
RSUs awarded (in shares) | 391,304 | ||
Awards settled and delivered (in shares) | 220,148 | ||
Awards settled and withheld (in shares) | 171,156 | ||
Tax liability remitted | $ 1,910,101 |
Employee Compensation Plans (46
Employee Compensation Plans (Details 7) - USD ($) | Jan. 01, 2015 | Feb. 28, 2015 | Jul. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||
Stock-based compensation expense | $ 894,103 | $ 1,967,293 | $ 1,763,416 | $ 2,079,351 | |||
Employee Stock Purchase Plan | |||||||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||
Purchase price of common stock (as a percent) | 85.00% | 85.00% | |||||
Maximum percentage of eligible compensation that eligible employee may contribute | 15.00% | ||||||
Maximum number of shares of common stock that participants may purchase | 2,100 | ||||||
The maximum value a participant can purchase in any calendar year | $ 25,000 | ||||||
Number of shares of common stock made available for sale | 430,269 | ||||||
Minimum percentage of total number of shares of the Company's common stock actually issued and outstanding on the last business day of the prior fiscal year that may automatically increase under the plan | 1.00% | ||||||
Minimum number of shares of Company's common stock that may automatically increase under the plan | 356,500 | ||||||
Automatic increase in shares reserved for issuance on first business day of each of fiscal year | 180,269 | ||||||
Common stock authorized for issuance (in shares) | 430,269 | ||||||
Fair value (in dollars per share) | $ 5.43 | ||||||
Stock-based compensation expense | $ 48,031 | $ 133,922 |
Collaborative Research Agreem47
Collaborative Research Agreements (Details) - Research Collaboration and License Agreement - BI | 1 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended | 36 Months Ended | 76 Months Ended | 96 Months Ended | |||
Jun. 30, 2013 | Dec. 31, 2012USD ($) | Apr. 30, 2012item | Jun. 30, 2009USD ($)item | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2013USD ($) | May. 31, 2012USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
BACE Inhibitors | ||||||||||
Collaborative research agreements | ||||||||||
Development milestones earned | $ 29,000,000 | |||||||||
Number of full time equivalent employees (FTE's) per month which company is obligated to provide per month for research services | item | 12 | |||||||||
Period for which company is obligated to provide full time equivalent employees for research services | 12 months | 36 months | ||||||||
Upfront license fee received | $ 4,000,000 | $ 15,000,000 | ||||||||
Payments the counterparty required to make each quarter during the funded research period | $ 740,000 | $ 1,020,000 | ||||||||
Total payments the counterparty required to make during the funded research period | $ 2,960,000 | $ 12,240,000 | ||||||||
Extended research period | 12 months | |||||||||
Number of FTE's per month which company is obligated to provide during the extended research period | item | 8 | |||||||||
Revenue recognized relating to the upfront payment | $ 2,000,000 | |||||||||
11-Beta HSD1 Inhibitors | ||||||||||
Collaborative research agreements | ||||||||||
Milestone payments received | $ 6,000,000 | |||||||||
Development milestones earned | $ 43,000,000 | |||||||||
Maximum milestone payments that may be received based on the achievement of pre specified events | 272,000,000 | 272,000,000 | ||||||||
Maximum milestone payments that may be received based on the achievement of pre specified events, development milestones | 42,000,000 | 42,000,000 | ||||||||
Maximum milestone payments that may be received based on the achievement of pre specified events, regulatory milestones | 105,000,000 | 105,000,000 | ||||||||
Maximum milestone payments that may be received based on the achievement of pre specified events, commercialization milestones | $ 125,000,000 | $ 125,000,000 | ||||||||
Percentage of milestone amount to be earned by any subsequent product(s) achieving the milestone | 50.00% | 50.00% | ||||||||
Percentage of milestone amount to be earned for second indications for a product covered by the contract to achieve the regulatory milestones | 50.00% | 50.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes | ||||
Current income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transactions | |||||
Costs incurred for related party | $ 75,065 | $ 547,841 | $ 368,071 | $ 1,138,938 | |
Due to the related party | $ 46,116 | $ 46,116 | $ 128,755 |