Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 09, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Savara Inc. | |
Entity Central Index Key | 1,160,308 | |
Trading Symbol | SVRA | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,203,464 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 61,133 | $ 13,373 |
Grants and award receivable | 400 | |
Prepaid expenses and other current assets | 2,541 | 840 |
Total current assets | 63,674 | 14,613 |
Property and equipment, net | 672 | 793 |
In-process R&D | 33,071 | 10,477 |
Goodwill | 28,222 | 3,051 |
Other non-current assets | 131 | |
Total assets | 125,770 | 28,934 |
Current liabilities: | ||
Accounts payable | 1,932 | 536 |
Accrued expenses | 5,487 | 2,477 |
Current portion of capital lease obligation | 719 | 442 |
Total current liabilities | 8,138 | 3,455 |
Long-term liabilities: | ||
Accrued interest on convertible promissory notes | 151 | |
Debt facility | 14,579 | |
Convertible promissory notes | 3,448 | |
Put option derivative liability | 979 | |
Contingent consideration | 11,685 | 9,708 |
Deferred tax liability | 11,180 | 2,305 |
Capital lease obligation, net of current portion | 297 | 579 |
Warrant liability | 303 | |
Other long-term liabilities | 122 | 20 |
Total liabilities | 46,001 | 20,948 |
Redeemable convertible preferred stock: | ||
Total redeemable convertible preferred stock | 43,861 | |
Stockholders’ equity (deficit): | ||
Common stock, $0.001 par value, 500,000,000 and 27,000,000 shares authorized as of June 30, 2017 and December 31, 2016, respectively; 24,203,464 and 3,162,573 shares (after giving effect to the Exchange Ratio and Reverse Stock Split) issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | 26 | 5 |
Additional paid-in capital | 134,222 | 3,117 |
Accumulated other comprehensive income (loss) | 404 | (591) |
Accumulated deficit | (54,883) | (38,406) |
Total stockholders’ equity (deficit) | 79,769 | (35,875) |
Total liabilities, redeemable convertible preferred stock, and stockholder’s equity (deficit) | $ 125,770 | 28,934 |
Series A Reedemable Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock: | ||
Total redeemable convertible preferred stock | 3,232 | |
Series B Reedemable Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock: | ||
Total redeemable convertible preferred stock | 17,301 | |
Series C Reedemable Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock: | ||
Total redeemable convertible preferred stock | $ 23,328 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Redeemable convertible preferred stock, shares issued | 11,927,875 | |
Redeemable convertible preferred stock, shares outstanding | 0 | 11,927,875 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 27,000,000 |
Common stock, shares issued | 24,203,464 | 3,162,573 |
Common stock, shares outstanding | 24,203,464 | 3,162,573 |
Series A Reedemable Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Redeemable convertible preferred stock, shares authorized | 0 | 1,799,906 |
Redeemable convertible preferred stock, shares issued | 0 | 1,799,906 |
Redeemable convertible preferred stock, shares outstanding | 0 | 1,799,906 |
Series B Reedemable Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Redeemable convertible preferred stock, shares authorized | 0 | 6,000,000 |
Redeemable convertible preferred stock, shares issued | 0 | 5,675,387 |
Redeemable convertible preferred stock, shares outstanding | 0 | 5,675,387 |
Series C Reedemable Convertible Preferred Stock [Member] | ||
Redeemable convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Redeemable convertible preferred stock, shares authorized | 0 | 8,000,000 |
Redeemable convertible preferred stock, shares issued | 0 | 4,452,582 |
Redeemable convertible preferred stock, shares outstanding | 0 | 4,452,582 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating expenses: | ||||
Research and development | $ 4,164 | $ 1,290 | $ 7,111 | $ 2,552 |
General and administrative | 5,088 | 608 | 6,924 | 953 |
Depreciation | 91 | 85 | 181 | 170 |
Total operating expenses | 9,343 | 1,983 | 14,216 | 3,675 |
Loss from operations | (9,343) | (1,983) | (14,216) | (3,675) |
Other income (expense): | ||||
Interest expense | (516) | (7) | (761) | (17) |
Foreign currency exchange loss | (122) | (84) | (154) | (72) |
Loss on extinguishment of debt | (1,816) | (1,816) | ||
Change in fair value of financial instruments | (177) | 23 | (237) | 36 |
Total other income (expense) | (2,631) | (68) | (2,968) | (53) |
Loss before income taxes | (11,974) | (2,051) | (17,184) | (3,728) |
Income tax benefit | 470 | 707 | ||
Net loss | (11,504) | (2,051) | (16,477) | (3,728) |
Accretion of redeemable convertible preferred stock | (554) | (2) | (578) | (26) |
Deemed dividend on beneficial conversion feature | (404) | (404) | ||
Net loss attributable to common stockholders | (12,462) | (2,053) | (17,459) | (3,754) |
Other comprehensive income: | ||||
Gain (loss) on foreign currency translation | 851 | 995 | ||
Total Comprehensive Loss | $ (10,653) | $ (2,051) | $ (15,482) | $ (3,728) |
Net loss per share: | ||||
Basic and diluted | $ (0.90) | $ (1.97) | $ (2.06) | $ (3.63) |
Weighted average common shares outstanding | ||||
Basic and diluted | 13,807,861 | 1,043,984 | 8,465,053 | 1,034,553 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Redeemable Convertible Series A Preferred Stock | Redeemable Convertible Series B Preferred Stock | Redeemable Convertible Series C Preferred Stock | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] |
Beginning balances at Dec. 31, 2016 | $ 43,861 | $ 3,232 | $ 17,301 | $ 23,328 | ||||
Beginning balance, shares at Dec. 31, 2016 | 11,927,875 | 1,799,906 | 5,675,387 | 4,452,582 | ||||
Accretion of redeemable convertible preferred stock | $ 578 | $ 22 | $ 460 | $ 96 | ||||
Temporary equity, Conversion of redeemable convertible preferred stock to common stock as effected for the reverse merger exchange ratio | $ (44,439) | $ (3,254) | $ (17,761) | $ (23,424) | ||||
Temporary equity, Conversion of redeemable convertible preferred stock to common stock as effected for the reverse merger exchange ratio, shares | (1,799,906) | (5,675,387) | (4,452,582) | |||||
Ending balance, shares at Jun. 30, 2017 | 0 | |||||||
Beginning balances at Dec. 31, 2016 | $ (35,875) | $ 5 | $ 3,117 | $ (38,406) | $ (591) | |||
Beginning balance, shares at Dec. 31, 2016 | 3,162,573 | |||||||
Repurchase of forfeited restricted common stock | (19,045) | |||||||
Accretion of redeemable convertible preferred stock | (578) | (578) | ||||||
Issuance of common stock upon exercise of warrants | 384 | 384 | ||||||
Issuance of common stock upon exercise of warrants,Shares | 111,799 | |||||||
Conversion of convertible notes into common stock | 10,045 | $ 1 | 10,044 | |||||
Conversion of convertible notes into common stock, Shares | 1,140,046 | |||||||
Conversion of redeemable convertible preferred stock to common stock as effected for the reverse merger exchange ratio | 44,438 | $ 7 | 44,431 | |||||
Conversion of redeemable convertible preferred stock to common stock as effected for the reverse merger exchange ratio, Shares | 7,034,102 | |||||||
Reclassification of warrant liability | 370 | 370 | ||||||
Beneficial conversion feature | 404 | 404 | ||||||
Business combination upon Merger | 35,846 | $ 4 | 35,842 | |||||
Business combination upon Merger, shares | 3,639,189 | |||||||
Issuance of common stock upon public offering, net closing costs | 39,522 | $ 9 | 39,513 | |||||
Issuance of common stock upon public offering, net closing costs, shares | 9,034,210 | |||||||
Issuance of detachable warrants with debt instrument | 359 | 359 | ||||||
Issuance of common stock upon At The Market sales, net | 100 | 100 | ||||||
Issuance of common stock upon At The Market sales, net, shares | 23,550 | |||||||
Issuance of common stock for settlement of RSUs, shares | 72,361 | |||||||
Issuance of common stock upon cashless exercise of stock options, shares | 4,679 | |||||||
Stock-based compensation | 236 | 236 | ||||||
Foreign exchange translation adjustment | 995 | 995 | ||||||
Net loss incurred | (16,477) | (16,477) | ||||||
Ending balance at Jun. 30, 2017 | $ 79,769 | $ 26 | $ 134,222 | $ (54,883) | $ 404 | |||
Ending balance, shares at Jun. 30, 2017 | 24,203,464 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (16,477) | $ (3,728) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 181 | 170 |
Changes in fair value of financial instruments | 237 | (36) |
Change in fair value of contingent consideration | 1,977 | |
Noncash interest | 400 | 26 |
Loss on extinguishment of debt | 1,816 | |
Foreign currency gain/(loss) | 154 | 72 |
Amortization of debt issuance costs | 204 | |
Stock-based compensation | 236 | 112 |
Changes in operating assets and liabilities: | ||
Grant and award receivable | 400 | |
Tax refund receivable | (666) | |
Prepaid expenses and other current assets | (817) | (180) |
Deferred rent | (7) | 16 |
Accounts payable and accrued expenses | 1,847 | 233 |
Net cash used in operating activities | (10,515) | (3,315) |
Cash flows from investing activities: | ||
Cash acquired through Merger | 3,442 | |
Purchase of property and equipment | (60) | (5) |
Net cash used in investing activities | 3,382 | (5) |
Cash flows from financing activity: | ||
Proceeds from debt facility | 14,894 | |
Proceeds from convertible promissory note | 3,569 | |
Issuance of common stock upon exercise of warrants | 385 | |
Issuance of common stock upon public offering | 39,522 | |
Repayment of long-term debt | (3,567) | |
Issuance of common stock upon at the market offerings, net | 100 | |
Proceeds from exercise of stock option | 1 | |
Capital lease obligation principal payments | (5) | (81) |
Net cash provided by financing activities | 54,898 | 696 |
Effect of exchange rate changes on cash and cash equivalents | (5) | |
Increase / (Decrease) in cash and cash equivalents | 47,760 | (2,624) |
Cash and cash equivalents beginning of period | 13,373 | 16,683 |
Cash and cash equivalents end of period | 61,133 | 14,059 |
Non-cash transactions: | ||
Extinguishment and derecognition of put options | 2,202 | |
Conversion of convertible notes into common stock | 8,249 | |
Shares issued in connection of business combination and assumed equity awards | 35,846 | |
Beneficial conversion feature | 404 | |
Series C Reedemable Convertible Preferred Stock [Member] | ||
Cash flows from financing activity: | ||
Proceeds from issuance of Series C preferred stock, net | 776 | |
Non-cash transactions: | ||
Accretion of redeemable convertible preferred stock | 96 | 11 |
Series A Reedemable Convertible Preferred Stock [Member] | ||
Non-cash transactions: | ||
Accretion of redeemable convertible preferred stock | 22 | 3 |
Series B Reedemable Convertible Preferred Stock [Member] | ||
Non-cash transactions: | ||
Accretion of redeemable convertible preferred stock | $ 460 | $ 12 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Savara Inc. (“Savara,” the “Company,” or as used in the context of “we” or “us”) is a clinical stage specialty pharmaceutical company focusing on the development and commercialization of product candidates for patients with rare respiratory diseases, including cystic fibrosis (CF), and pulmonary alveolar proteinosis (PAP). Our lead clinical stage product candidate, Molgradex, is an inhaled formulation of recombinant human granulocyte-macrophage colony-stimulating factor (GM-CSF), intended for the treatment of PAP. Our other lead clinical stage product candidate, AeroVanc, is an inhaled formulation of vancomycin, intended for the treatment of persistent methicillin-resistant Staphylococcus aureus (MRSA) lung infection in CF patients. The Company and its wholly owned subsidiaries, Aravas Inc. and Sarara ApS, operate in one segment with its principal offices in Austin, Texas. On April 27, 2017, Savara completed its business combination with Mast Therapeutics, Inc. ("Mast"), a publicly held company, in accordance with the terms of the Agreement and Plan of Merger and Reorganization (the "Merger Agreement"), dated January 6, 2017 (the "Merger"). In connection with and immediately prior to the effective time of the Merger, Mast implemented a reverse stock split at a ratio of one new share for every 70 shares of its common stock outstanding (the “Reverse Stock Split”). Under the terms of the Merger Agreement, each outstanding share of Savara common stock was then converted into Mast common stock at a ratio of approximately .5860 of a Savara share (the “Exchange Ratio”). No fractional shares were issued and instead, shareholders received cash for the value of their fractional shares. Immediately following the effective date of the Merger, Mast’s preexisting equity holders owned approximately 23% of the combined company, and Savara’s preexisting equity holders owned approximately 77%. Accordingly, all operations presented in the accompanying financial statements and notes to the financial statements represent the historical activity of Savara, the private company prior to the Merger. The accompanying financial statements and notes to the consolidated financial statements also give retroactive effect to the common stock Exchange Ratio and Reverse Stock Split of the Merger for all periods presented, including common stock warrants and common stock-based compensation awards. Following the Merger, Mast was renamed “Savara Inc." and began trading on The Nasdaq Capital Market under the symbol "SVRA." Prior to the Merger, Mast was traded on the New York Stock Exchange under the symbol "MSTX." The combined company’s pipeline includes: • Molgradex • AeroVanc • Aironite, a sodium nitrite solution for intermittent inhalation via nebulization, which is being developed for the treatment of heart failure with preserved ejection fraction (HFpEF). Since inception, Savara has devoted substantially all of its efforts and resources to identifying and developing its product candidates, recruiting personnel, and raising capital. Savara has incurred operating losses and negative cash flow from operations and has no product revenue from inception to date. The Company has not yet commenced commercial operations. Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) as defined by the Financial Accounting Standards Board (“FASB”). These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. Unaudited Interim Financial Information The interim condensed consolidated financial statements included in this document are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company’s financial position as of June 30, 2017, and its results of operations for the six months ended June 30, 2017 and 2016, and cash flows for the six months ended June 30, 2017 and 2016. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other future annual or interim period. The December 31, 2016 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Liquidity As of June 30, 2017, the Company had an accumulated deficit of approximately $54.9 million. The Company also had negative cash flow from operations of approximately $10.5 million during the six months ended June 30, 2017. The cost to further develop and obtain regulatory approval for any drug is substantial and, as noted below, the Company may have to take certain steps to maintain a positive cash position. Accordingly, the Company will need additional capital to further fund the development of, and seek regulatory approvals for, its product candidates and begin to commercialize any approved products. The Company is currently focused primarily on the development of respiratory drugs and believes such activities will result in the Company’s continued incurrence of significant research and development and other expenses related to those programs. If the clinical trials for any of the Company’s product candidates fail or produce unsuccessful results and those product candidates do not gain regulatory approval, or if any of the Company’s product candidates, if approved, fails to achieve market acceptance, the Company may never become profitable. Even if the Company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. The Company intends to cover its future operating expenses through cash and cash equivalents on hand and through a combination of equity offerings, debt financings, government or other third-party funding, and other collaborations and strategic alliances. The Company cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its stockholders. While the Company has cash and cash equivalents of $61.1 million as of June 30, 2017, we intend to continue to raise additional capital through the issuance of additional equity and potentially through borrowings, and strategic alliances with partner companies. However, if such financings are not available timely and at adequate levels, the Company will need to reevaluate its operating plans. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Principles of Consolidation The condensed consolidated financial statements of the Company are stated in U.S. dollars and are prepared using U.S. GAAP. These financial statements include the accounts of the Company and its wholly owned subsidiaries. The financial statements of the Company’s wholly owned subsidiaries are recorded in their functional currency and translated into the reporting currency. The cumulative effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency is reported in Accumulated Other Comprehensive Income. All intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management’s estimates include those related to the accrual of research and development costs, the valuation of preferred and common shares, certain financial instruments recorded at fair value, stock-based compensation, and the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances. Accordingly, actual results could be materially different from those estimates. Risks and Uncertainties The product candidates being developed by the Company require approvals from the U.S. Food and Drug Administration (FDA) or foreign regulatory agencies prior to commercial sales. There can be no assurance that the Company’s product candidates will receive the necessary approvals. If the Company is denied regulatory approval of its product candidates, or if approval is delayed, it may have a material adverse impact on the Company’s business, results of operations and its financial position. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, risks related to the successful discovery and development of drug candidates, raising additional capital, development of competing drugs and therapies, protection of proprietary technology and market acceptance of the Company’s products. As a result of these and other factors and the related uncertainties, there can be no assurance of the Company’s future success. Cash and Cash Equivalents Cash and cash equivalents consist of cash and institutional bank money market accounts with original maturities of three months or less when acquired and are stated at cost, which approximates fair value. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. The Company places its cash and cash equivalents with a limited number of high quality financial institutions and at times may exceed the amount of insurance provided on such deposits. Accrued Research and Development Costs The Company records the costs associated with research nonclinical studies, clinical trials, and manufacturing development as incurred. These costs are a significant component of the Company’s research and development expenses, with a substantial portion of the Company’s on-going research and development activities conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. The Company makes significant judgments and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized as the contracted services are performed. As actual costs become known, the Company adjusts its prepaids and accruals. Inputs, such as the services performed, the number of patients enrolled, or the study duration, may vary from the Company’s estimates resulting in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. The Company has not experienced any material deviations between accrued and actual research and development expenses. Business Combinations Assets acquired and liabilities assumed as part of a business acquisition are recorded at their estimated fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and, in some cases, assumptions with respect to the timing and amount of future revenue and expenses associated with an asset. Goodwill and Acquired In-Process Research and Development (IPR&D) Goodwill and acquired IPR&D are not amortized but are tested annually for impairment or more frequently if impairment indicators exist. The Company adopted accounting guidance related to annual and interim goodwill and acquired IPR&D impairment tests which allows the Company to first assess qualitative factors before performing a quantitative assessment of the fair value of a reporting unit. If it is determined on the basis of qualitative factors that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative impairment test is required. The Company experienced a $.1 million and $.4 million increase in the carrying value of goodwill and IPR&D, respectively, related to Savara ApS, from the acquisition date, July 15, 2016, which was due to foreign currency translation. Additional goodwill and IPR&D were recorded with respect to the Merger. Tax Refund Receivable The Company has recorded a Danish tax credit earned by its subsidiary, Savara ApS for the post-acquisition period in 2016 and the six months ended June 30, 2017. Under Danish Tax Law, Denmark remits a research and development tax credit equal to 22% of qualified research and development expenditures, not to exceed established thresholds. As of June 30, 2017, the credits had not yet been received and a receivable of $1.1 million was recorded on the balance sheet in prepaid expenses and other current assets. The portion of the total Danish tax credit related to the post-acquisition period in 2016 of approximately $.4 million is expected to be collected in November 2017. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. Our chief operating decision maker is the chief executive officer. We have one operating segment, specialty pharmaceuticals within the respiratory system. Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: • Level 1 – Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 – Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and • Level 3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. Financial instruments carried at fair value include cash and cash equivalents and contingent consideration related to the acquisition of Serendex for which any change is reflected in general and administrative expense, as well as certain warrants classified as liabilities and embedded put options separated from the convertible promissory notes which were converted to common equity or derecognized during the period ended June 30, 2017 as a result of the Merger (Notes 6, 8, and 9). These remaining financial instruments are carried at fair value on a recurring basis. Financial instruments not carried at fair value include accounts payable and accrued liabilities. The carrying amounts of these financial instruments approximate fair value due to the highly liquid nature of these short-term instruments. Net Loss per Share Basic net loss attributable to common stockholders per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period without consideration of common stock equivalents. Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share for all periods presented as the inclusion of all potential dilutive securities would have been antidilutive. Redeemable Convertible Preferred Stock and Series B and Series C Warrants The Series A, Series B, and Series C redeemable convertible preferred stock, previously classified in temporary equity as it was redeemable at the written request of the holders of at least two-thirds of the then outstanding shares of preferred stock, at any time after October 31, 2022, was converted to common stock on the effective date of the Merger subject to the Exchange Ratio. Additionally, certain outstanding warrants to purchase the Series B convertible preferred stock (“Series B Warrants”) previously classified as liabilities were exercised on the effective date of the Merger with any residual Series B warrants expiring in May 2017. Certain outstanding warrants to purchase the Series C redeemable convertible preferred stock (“Series C Warrants”) were reclassified from a liability to common equity as the Series C Warrants have been converted to warrants to purchase common stock subject to the Exchange Ratio following the Merger. Stock-Based Compensation The Company recognizes the cost of stock-based awards granted to employees based on the estimated grant-date fair value of the awards. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The Company recognizes the compensation costs for awards that vest over several years on a straight-line basis over the vesting period (see Note 12). Forfeitures are recognized when they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures arise. The Company recognizes the cost of stock-based awards granted to nonemployees at their then-current fair values as services are performed, and such awards are remeasured through the counterparty performance date. Manufacturing Commitments and Contingencies The Company is subject to various manufacturing royalties and payments related to its product candidate, Molgradex. Upon the successful development, registration and attainment of approval by the proper health authorities, such as the FDA, in any territory except Latin America, Central America and Mexico, the Company must pay a royalty of three percent (3%) on annual net sales to the manufacturer of its Active Pharmaceutical Ingredients (“API”). Under this agreement with the API manufacturer, no signing fee or milestones are included in the royalty payments, and there is no minimum royalty. Additionally, Savara has a commitment to acquire a working cell bank and a master cell bank for approximately $2.0 million from this API manufacturer in the third quarter of 2017. The Company is also subject to certain contingent milestone payments up to approximately 7.0 million euros based upon various development activities and regulatory approvals payable to the Company’s manufacturer of its nebulizer used to administer Molgradex. In addition to these milestones, the Company will owe a royalty to the manufacturer of its nebulizer based on net sales. The royalty rate ranges from three and a half percent (3.5%) to five percent (5%) depending on the device technology used by the Company to administer the product. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (“ASU 2016-02”). The update aims at making leasing activities more transparent and comparable, and requires substantially all leases to be recognized by lessees on their balance sheet as a right-of-use asset and a corresponding lease liability, including leases currently accounted for as operating leases. The update also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial statements. In August 2016, the FASB issued Accounting Standards Update 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which intended to add or clarify guidance on the classification of certain cash receipts and payments on the statement of cash flows. The new guidance addresses cash flows related to the following: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of predominance principle to separately identifiable cash flows. ASU 2016-15 is effective for the Company for annual periods beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”), which intended to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for the Company for annual periods beginning after December 15, 2017. The Company’s early adoption of this standard did not have a material impact on the Company’s financial statements. In May 2017, the FASB issued Accounting Standards Update 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which intended to provide clarity when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective for the Company for annual periods beginning on or after December 15, 2017 with early adoption permitted. The Company’s early adoption of this standard did not have a material impact on the Company’s financial statements. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2017 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaid Expenses and Other Current Assets | 3. Prepaid expenses and other current assets Prepaid expenses, consisted of (in thousands): June 30, 2017 December 31, 2016 R&D tax credit receivable $ 1,103 $ 357 Prepaid clinical trial costs 650 243 VAT receivable 91 111 Prepaid insurance 368 35 Deposits and other 329 94 Total prepaid expenses and other current assets $ 2,541 $ 840 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 4. Accrued expenses and other liabilities Accrued expenses and other liabilities, consisted of (in thousands): June 30, 2017 December 31, 2016 Accrued contracted research and development costs $ 4,100 $ 1,855 Accrued general and administrative costs 849 458 Accrued compensation 527 117 Other 11 47 Total accrued expenses and other liabilities $ 5,487 $ 2,477 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | 5. Acquisitions (a) Mast On April 27, 2017, the Company completed the Merger with Mast as discussed in Note 1. The Merger was accounted for as a reverse merger under the acquisition method of accounting whereby Savara was considered to have acquired Mast for financial reporting purposes because, immediately upon completion of the Merger, Savara stockholders held a majority of the voting interest of the combined company. Pursuant to business combination accounting, the Company applied the acquisition method, which requires the assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The Company used the Multi-Period Excess Earnings Model (MPEEM), a form of the income approach to value the in-process research and development intangible asset. Under the valuation method, the present value of future cash flows expected to be generated from the in-process research and development of the acquired product candidate, Aironite, was determined using a reasonable discount rate, and identified projected cash flows from Aironite were risk adjusted to take into consideration the probabilities of moving through the various clinical stages. The excess of the purchase price over the assets acquired and liabilities assumed represents goodwill. The goodwill is primarily attributable to the synergies expected to arise after the acquisition and is not expected to be deductible for tax purposes. Transaction costs associated with the Merger of approximately $2.1 million are included in general and administrative expense. The total purchase price for Mast was $35.8 million based on the fair value of the outstanding Mast equity on the date of the Merger which was allocated as follows: Purchase Consideration (in thousands) Fair value of Mast shares outstanding $ 33,117 Fair value of Mast equity 2,729 Fair value of total consideration $ 35,846 Assets acquired and liabilities assumed Cash and cash equivalents $ 3,442 Tangible assets 283 In-process research and development intangible assets 21,692 Liabilities (2,396 ) Debt (3,407 ) Deferred tax liability (8,677 ) Total assets acquired and liabilities assumed 10,937 Goodwill 24,909 $ 35,846 The final allocation of the purchase price is dependent on the finalization of the valuation of the fair value of assets acquired and liabilities assumed and may differ from the amounts included in these financial statements. The Company expects to complete the final allocation as soon as practical but no later than one year from the acquisition date. Management does not expect adjustments, if any, resulting from changes to the purchase price allocation, to have a material effect on the Company’s financial position or results of operations. (b) Serendex On May 13, 2016, the Company entered into a Business Transfer Agreement with Serendex under which Serendex agreed to sell, transfer and assign to the Company all of its assets and subsidiaries, certain of its contracts, and certain of its employees and liabilities. On July 15, 2016, the Company completed the acquisition of Serendex through its wholly-owned subsidiary, Savara ApS, a limited liability company established under the laws in Denmark. Through this acquisition, the Company gained access to the late-stage asset, Molgradex, for the treatment of PAP, with a Phase 3 clinical study ongoing in the EU and Japan which has since been expanded to the United States. In addition to Molgradex, Savara gained access to an experienced development team familiar with all aspects of the Molgradex program. Pursuant to the Business Transfer Agreement, the Company issued 1,965,400 shares of the Company’s common stock to the seller, after giving effect of the Exchange Ratio and agreed to pay up to $21.5 million of contingent cash consideration upon the attainment of certain contingent development milestones of Molgradex. (c) Pro Forma The following summary pro forma condensed consolidated financial information reflects the Merger with Mast as if it had occurred on January 1, 2016 for purposes of the statements of operations. This summary pro forma information is not necessarily representative of what the Company’s results of operations would have been had the Merger in fact occurred on January 1, 2016, and is not intended to project the Company’s results of operations for any future period. Included in the Savara condensed consolidated statement of operations for the six months ended June 30, 2017 is $0 of revenue and $.6 million of net loss before income tax generated by Mast since April 27, 2017, the acquisition date. Pro forma condensed consolidated financial information for the six months ended June 30, 2017 and the year ended December 31, 2016 (unaudited) is as follows: Six Months Ended June 30, 2017 Year Ended December 31, 2016 Net revenues $ 94 $ 528 Net loss $ (14,245 ) $ (42,560 ) Pro forma combined net loss includes adjustments to remove transaction costs of $8.4 million and $.6 million for the six months ended June 30, 2017 and the year ended December 31, 2016, respectively, because they will not have a continuing impact on operations, and a reduction in historical interest expense of $1.4 million for the year ended December 31, 2016 due to the new debt to finance the merger and extinguishment of Mast pre-merger debt. |
Convertible Promissory Notes
Convertible Promissory Notes | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | 6. Convertible Promissory Notes A. 2016 Convertible Promissory Note During 2016, the Company borrowed approximately $4.4 million from several investors under convertible subordinate promissory notes (the “2016 Notes”). Under the amended terms, the 2016 Notes converted into equity in connection with the Merger. See further discussion under Accounting for the 2016 Notes below. The 2016 Notes accrued interest at 8.0% per annum computed on the basis of the actual number of days elapsed and a 365-day year. All unpaid principal, together with any then accrued but unpaid interest was due and payable on the earliest of (i) June 30, 2018 (the “Maturity Date”), (ii) the closing of a change of control as defined, or (iii) the occurrence of an event of default, as defined (such earliest date is hereinafter referred to as Maturity). The 2016 Notes were prepayable only with the written consent of the holders of a majority of the principal amount of the then-outstanding 2016 Notes. The following paragraphs describe the original and amended conversion features of the 2016 Notes. Automatic Conversion The principal and any accrued interest automatically convert into shares of Qualified Private Placement Financing Securities at the 2016 Note Conversion Price, upon the closing of a Qualified Private Placement Financing (“Private Placement Automatic Conversion”). In the event of a Private Placement Automatic Conversion, the 2016 Notes are converted into a number of Qualified Private Placement Financing Securities determined by dividing (i) the aggregate outstanding principal amount and accrued but unpaid interest by (ii) the 2016 Note Conversion Price. A Qualified Private Placement Financing is defined as the next Private Placement transaction (or series of related transactions) after the date of the 2016 Notes and before Maturity in which the Company issues and sells shares of its preferred stock in exchange for aggregate gross proceeds of at least $5 million (excluding amounts received upon conversion of indebtedness). Private Placement means any equity financing transaction (or series of related transactions) pursuant to a private placement exempt from the registration requirements of the Securities Act, other than pursuant to the exemption provided by Regulation A under the Securities Act (i.e., not a Regulation A Offering or an Initial Public Offering). The Note Conversion Price is the lesser of (A) (i) the price per share of the Next Round Securities, Qualified Financing Shares or Regulation A Offering Shares, as the case may be, times (ii) 0.8 (i.e. a 20% discount), or (B) the quotient obtained by dividing $125 million (the “Valuation Cap”) by the Company’s fully diluted capitalization immediately prior to the initial closing of the Qualified Financing, Non-Qualified Financing, Qualified Regulation A Offering or Non-Qualified Regulation A Offering in which the Notes are converted. Non-Qualified Private Placement Financing means any transaction (or series of related transactions) after the date of the 2016 Notes and before Maturity in which the Company issues and sells shares of its capital stock in any Private Placement transaction that is not deemed to be a Qualified Private Placement Financing. Next Round Securities means the equity shares sold in a Non-Qualified Private Placement Financing. The entire outstanding principal amount of the 2016 Notes and any accrued but unpaid interest will be converted automatically into shares of Regulation A securities at the Note Conversion Price upon the closing of a Qualified Regulation A Offering. In the event of an automatic conversion under a Qualified Regulation A Offering, the 2016 Notes will be converted into that number of Regulation A securities determined by dividing (i) the aggregate outstanding principal amount of the 2016 Notes and any accrued but unpaid interest by (ii) the Note Conversion Price. A Qualified Regulation A Offering means a Regulation A Offering with gross proceeds to the Company of at least $5 million in one or more closings during a twelve-month period, excluding amounts received on conversion of the 2016 Notes. Voluntary Conversion In the event that the Company consummates a Non-Qualified Private Placement Financing, at the option of each holder or holders of a majority of the outstanding aggregate principal amount, all or part of the outstanding principal and any accrued interest may be converted into Next Round Securities. A Non-Qualified Private Placement Financing is any transaction (or series of related transactions) after the date of the 2016 Notes and before Maturity in which the Company issues and sells shares of its capital stock in any Private Placement transaction that is not deemed to be a Qualified Private Placement Financing at the applicable 2016 Note Conversion Price as defined above. In the event that the Company consummates a Non-Qualified Regulation A Offering (i) at the option of the holder, but subject to the consent of the board of directors, all or part of the outstanding principal amount of the 2016 Notes and any accrued but unpaid interest may be converted into Regulation A Securities, and (ii) at the option of the holders of a majority of the outstanding principal amount of the 2016 Notes, all or part of the outstanding principal amount of the 2016 Notes and any accrued but unpaid interest will be converted into shares of Regulation A Securities. In the event of such conversion, the 2016 Notes will be converted into that number of shares of Regulation A Securities determined by dividing (x) the aggregate outstanding principal amount of the 2016 Notes and any accrued but unpaid interest by (y) the Note Conversion Price. A Non-Qualified Regulation A Offering means the closing of a Regulation A Offering with gross proceeds to the Company of less than $5 million excluding amounts received on conversion of the 2016 Notes. Change in Control Conversion In the event of a Change of Control after the date of the 2016 Notes but prior to Maturity, at the option of each holder or holders of a majority of the outstanding aggregate principal amount, all or part of the outstanding principal amount and any accrued interest, (i) may be converted into the number of shares of Series C Redeemable Convertible Preferred Stock (“Series C Preferred Stock”) determined by dividing (x) the aggregate outstanding principal amount and any accrued interest by (y) the quotient obtained by dividing (1) the Valuation Cap by (2) the Company’s capital stock outstanding immediately prior to such Change of Control. A Change of Control means any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, and shall be deemed to be occasioned by, or to include, (i) a merger or consolidation of the Company into or with another entity after which the stockholders of the Company immediately prior to such transaction do not own, immediately following the consummation of the transaction by virtue of their shares in the Company or securities received in exchange for such shares in connection with the transaction, a majority of the voting power of the surviving entity in proportions substantially identical to those that existed immediately prior to such transaction and with substantially the same rights, preferences, privileges and restrictions as the shares they held immediately prior to the transaction, (ii) the sale, transfer or other disposition (but not including a transfer or disposition by pledge or mortgage to a bona fide lender) of all or substantially all of the assets of the Company (other than to a wholly-owned subsidiary), or (iii) the sale or transfer by the Company or its stockholders of more than 50% of the voting power of the Company in a transaction or series of related transactions other than in a transaction or series of transactions effected by the Company primarily for financing purposes. IPO Conversion Upon an initial public offering of the Company’s common stock, the entire outstanding principal amount plus any accrued interest under the 2016 Notes automatically converts into shares of Company common stock at the IPO Conversion Price. The IPO Conversion Price means the lesser of the (x) quotient obtained by dividing (1) the Valuation Cap Maturity Date Conversion The entire outstanding principal amount and any accrued interest under the 2016 Notes automatically converts into shares of Series C Preferred Stock at the Series C Price upon the close of business of the Maturity Date. In the event of such automatic conversion, the 2016 Notes convert into that number of Series C Preferred Stock determined by dividing (i) the aggregate outstanding principal amount of the 2016 Notes plus any accrued interest by (ii) the Series C Price. The Series C Price is $5.2605 as adjusted for stock dividends, stock splits, recapitalizations and other similar events. Public Listing Conversion The 2016 Notes and the Series C Warrants, issued with the note subscriptions, were amended to include a conversion clause in the case of the Merger. The amendment provides the warrant holder the right to voluntarily exercise the Series C Warrants; however, the 2016 Notes would be automatically converted in the case of the Merger. Upon the consummation of the Merger or a similar transaction that results in the listing of capital stock of the Company or shares issued in exchange for the capital stock of the Company, the entire principal amount plus any accrued interest under the 2016 Notes automatically converts into shares of Common Stock at $4.22 per share, which was 80% of the estimated Merger per share value, for notes issued on or prior to August 15, 2016 and 80% of the amount equal to the average trading price of Mast’s common stock for the twenty day period ending two days prior to the closing of the Merger, as adjusted by the Exchange Ratio described in the Merger Agreement. Accounting for the 2016 Notes Management determined that the automatic conversion upon a Qualified Private Placement Financing, a Qualified Regulation A Offering, a Non-Qualified Private Placement Financing, or a Non-Qualified Regulation A Offering as defined above represented, in substance, a put option (redemption feature) designed to provide the investor with a fixed monetary amount, settleable in shares. Management determined that this put option should be separated and accounted for as a derivative primarily because the put option met the net settlement criterion and the settlement provisions were not consistent with a fixed-for-fixed equity instrument. With respect to the Series C Warrants issued to investors who purchased 2016 Notes prior to August 15, 2016, management determined that the Series C Warrants should also be separated and accounted for as a derivative and classified as a liability. Both the put option, with a fair value of approximately $1.0 million and warrant liability, with a fair value of approximately $.3 million at inception, were initially recorded as derivative liabilities on the accompanying balance sheet and a corresponding discount to the 2016 Notes. The Company accreted the discount to interest expense on the statement of operations and comprehensive loss over the term of the 2016 Notes using the effective interest rate method. The Company recorded interest expense of $.2 million during the six months ended June 30, 2017 related to the accretion of the total discount through the date of conversion. Upon the Merger, the date of the automatic conversion under the Public Listing Conversion provisions, the 2016 Notes were surrendered in exchange for shares of the Company’s common stock after giving effect to the Exchange Ratio. The debt host contract and separated derivative liability were both subject to extinguishment accounting, and a loss in the amount of $.9 million was recorded in the Statement of Operations and Comprehensive Loss. The loss was calculated as the difference between the net book value of the 2016 Notes plus the fair value of the put option immediately prior to the Automatic Conversion, and the fair value of the common stock into which the 2016 Notes were converted. B. 2017 Convertible Promissory Note During 2017, the Company borrowed approximately $3.6 million from several investors under convertible subordinate promissory notes (the “2017 Notes”) which converted into equity in connection with the Merger. The 2017 Notes accrued interest at 8.0% per annum computed on the basis of the actual number of days elapsed and a 365-day year. All unpaid principal, together with any then accrued but unpaid interest was due and payable on the earliest of (i) June 30, 2018, (ii) the closing of a change of control as defined, or (iii) the occurrence of an event of default, as defined (such earliest date is hereinafter referred to as Maturity). The 2017 Notes were prepayable only with the written consent of the holders of a majority of the principal amount of the then-outstanding 2017 Notes. The terms and conditions of the 2017 Notes were substantially consistent with the 2016 Notes as described above, other than the Public Listing Conversion feature which is described below. Public Listing Conversion Immediately prior to, but in any event conditioned upon the consummation of a merger or similar transaction that results in the listing of capital stock the Company or shares issued in exchange for the capital stock of the Company on any tier of any U.S. national securities exchange, including the transactions described in the Merger Agreement, the entire outstanding principal amount of the 2017 Notes, any accrued but unpaid interest and any other amounts payable under the 2017 Notes shall be converted automatically into shares of the Company’s common stock, as adjusted for the Exchange Ratio, at the Reverse Merger Conversion Price. Upon such occurrence, the 2017 Notes shall be converted into that number of shares of common stock determined by dividing (i) the aggregate outstanding principal amount of the 2017 Notes, any accrued but unpaid interest, and any other amounts payable under the 2017 Notes by (ii) the Reverse Merger Conversion Price. The Reverse Merger Conversion Price means eighty percent of the amount equal to the average trading price of Mast’s common stock for the twenty-day period prior to the Merger date. Accounting for the 2017 Notes Management determined that the automatic conversion upon a Qualified Private Placement Financing, a Qualified Regulation A Offering, a Non-Qualified Private Placement Financing, or a Non-Qualified Regulation A Offering as defined above represented, in substance, a put option (redemption feature) designed to provide the investor with a fixed monetary amount, settleable in shares. Management determined that this put option should be separated and accounted for as a derivative primarily because the put option met the net settlement criterion and the settlement provisions were not consistent with a fixed-for-fixed equity instrument. The put option, with a fair value of approximately $.8 million at inception, was initially recorded as a derivative liability on the accompanying balance sheet and a corresponding discount to the 2017 Notes. The Company accreted the discount to interest expense on the statement of operations and comprehensive loss over the term of the 2017 Notes using the effective interest rate method. The Company recorded interest expense of approximately five thousand dollars Upon the Merger, the date of the automatic conversion under the Public Listing Conversion provisions, the 2017 Notes were surrendered in exchange for the Company’s common stock after giving effect to the Exchange Ratio. The debt host contract and separated derivative liability were both subject to extinguishment accounting, and a loss in the amount of approximately $.9 million was recorded in the Statement of Operations and Comprehensive Loss. The loss was calculated as the difference between the net book value of the 2017 Notes plus the fair value of the put option immediately prior to the Automatic Conversion, and the fair value of the common stock into which the 2017 Notes were converted. |
Debt Facility
Debt Facility | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt Facility | 7. Debt Facility On April 28, 2017, the Company entered into a loan and security agreement with Silicon Valley Bank (the “Loan Agreement”). The Loan Agreement provides for a $15 million debt facility, of which the first tranche, or $7.5 million, was immediately available to the Company upon completion of the Merger with a minimum market cap of $100 million. The Company executed the first tranche in early May 2017. The primary use of the capital was for the repayment of $3.7 million of principal debt and fees of Mast assumed in the Merger. The residual capital will be utilized to fund ongoing development programs of the Company and for general corporate purposes. Under the terms of the Loan Agreement, the Company may, but is not obligated to draw a second tranche of $7.5 million available through June 30, 2017, subject to the achievement of certain corporate milestones specifically a minimum new capital raise with combined proceeds of at least $40 million through a secondary offering, private investment in public entity (PIPE), ATM, partnerships or grant to be received within twelve months of signing the agreement. On June 15, 2017, following an underwritten public offering of 9,034,210 shares of the Company’s common stock and the sale of 23,550 shares of the Company’s common stock under the At The Market Sales Agreement (Note 9), the Company executed the second tranche of the Loan Agreement for $7.5 million as the financing conditions under the Loan Agreement had been met. The Loan Agreement contains customary affirmative and negative covenants, including among others, covenants limiting our ability and our subsidiaries to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments and enter into transactions with affiliates, in each case subject to certain exceptions. The Loan Agreement bears interest at the prime rate reported in The Wall Street Journal, plus a spread of 4.25%. Interest only payments are due through September 2018 followed by monthly payments of principal plus interest over the following thirty (30) months. Since the second tranche was fully extended, the interest only period was extended for an additional six (6) months, through March 2019 followed by monthly payments of principal plus interest over the following twenty-four (24) months through the maturity date of March 1, 2021 under the Loan Agreement provisions. We were obligated to pay customary closing fees and are obligated to pay a final payment of 6.0% of the aggregate principal amount of term loans advanced under the facility. The end of term charge of $.9 million will be due on the scheduled maturity date and is being recognized as an increase to the principal with a corresponding charge to interest expense over the term of the facility using the effective interest method. In connection with the Loan Agreement, we paid $.1 million in legal costs directly attributable to issuing the debt instrument. Such charges were accounted for as debt issuance costs and are being amortized to interest expense using the effective interest method through the scheduled maturity date. Upon funding the first tranche of the Loan Agreement, the Company was obligated to issue warrants to purchase shares of the Company’s common stock equal to 3.0% of the funded amount divided by the exercise price to be set based on the average price per share over the preceding 10 trading days prior to closing. The number of shares callable under the warrant agreement for the first tranche and exercise price were 24,725 shares of the Company’s common stock at an exercise price of $9.10 per share, with a ten year life, expiring April 28, 2027 (“April 2017 Warrants”). Upon funding the second tranche of the Loan Agreement, the Company was obligated to issue warrants to purchase shares of the Company’s common stock equal to 3.0% of the funded amount divided by an exercise price to be set based on the average price per share over the preceding 10 trading days prior to funding or the price per share prior to the day of funding. As such, the Company issued a second warrant for 41,736 shares at an exercise price of $5.39 with a ten year life, expiring June 15, 2027 (“June 2017 Warrants”). The April 2017 Warrants and June 2017 Warrants issued were valued using the Black-Scholes option pricing model with the following assumptions: volatility of 71.42% and 71.57%, respectively, expected term of ten years, risk-free interest rate of 2.33% and 2.16%, respectively, and a zero dividend yield. The collective warrant fair value of $.4 million has been recorded as a debt discount and is being amortized through interest expense using the effective interest method through the scheduled maturity date. Summary of Carrying Value The following table summarizes the components of the debt facility carrying value (in thousands): As of June 30, 2017 Short-term Long-term Principal payments to lender and end of term charge $ — $ 15,025 Debt Issuance costs — (99 ) Debt discount related to warrants — (347 ) Carrying Value $ — $ 14,579 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. Fair Value Measurements The Company measures and reports certain financial instruments at fair value on a recurring basis and evaluates its financial instruments subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them in each reporting period. The Company determined that the warrant liability for the Series B and Series C Warrants, the put options on the 2016 Notes and 2017 Notes, described further in Note 6, and the contingent consideration, described further below, were Level 3 financial instruments. The fair value of these instruments as of June 30, 2017 and December 31, 2016 was as follows (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2017: Contingent consideration $ — $ — $ 11,685 As of December 31, 2016: Put option $ — $ — $ 979 Warrant liability $ — $ — $ 303 Contingent consideration $ — $ — $ 9,708 The estimated fair value of the put option on the 2016 Notes was determined using a multi-scenario probability weighted average method analysis in which the future probability of the equity financing event or Merger was weighted for its respective probability. The Company used the following assumptions to value the put option on the 2016 Notes and 2017 Notes as of June 30, 2017 and December 31, 2016. Upon the Merger date, April 27, 2017, the 2016 Notes and 2017 Notes were automatically converted into shares of common stock of the Company. Assumption June 30, 2017 December 31, 2016 Discount rate — 0.43 % Probability of event — 85.0 % Changes in the unobservable inputs noted above would impact the fair value of the put options and have a corresponding impact on the Company’s net loss. The probability of the automatic conversion feature was determined by management based on its consideration of the expected timeline for the next round of Financing, Merger, and historical experience. Increases (decreases) in discount rate would decrease (increase) the value of the put options, and an increase (decrease) in the probability of the equity financing event or Merger event occurring would increase (decrease) the value of the put options. The estimated fair value of the warrant liability (Series B Warrants and Series C Warrants) was determined using a Noreen Wolfson option pricing model. The assumptions used in valuing these warrants are presented in the table below. The warrant liability was reclassified as common equity upon the Merger date. Assumption June 30, 2017 December 31, 2016 Expected term — 0.42 – 4.50 Expected dividend yield — — Expected volatility — 44.65% - Risk-free interest rate — 0.58% - 1.82% Changes in the unobservable inputs noted above would impact the fair value of the liabilities and have a corresponding impact on the Company’s net loss. Increases (decreases) in the expected term and expected volatility would increase (decrease) net loss and the value of the warrant liability and an increase(decrease) in the risk-free interest rate would decrease (increase) net loss and the value of the warrant liability. Pursuant to the acquisition of certain assets, liabilities, and subsidiaries of Serendex (see Note 1), Savara agreed to pay the seller, in addition to a stipulated amount of shares of Savara’s common stock, (i) $5 million upon receipt of marketing approval of Molgradex (the Product) by the European Medicines Agency, (ii) $15 million upon receipt of marketing approval of the Product by the FDA, and (iii) $1.5 million upon receipt of marketing approval of the Product by the Japanese Pharmaceuticals and Medical Devices Agency (the “Contingent Milestone Payments”). The Company estimates the likelihood of approval in each region, separately, based on the product candidate’s current phase of development and utilizing published studies of clinical development success rates for comparable non-oncology orphan drugs. The present value of the potential cash outflows from the probability weighted Contingent Milestone Payments is then estimated by taking into consideration that the Contingent Milestone Payments are similar to a business expense of the Company and would be senior to any Company debt obligations. The resulting weighted average present value factor is then applied to discount the probability adjusted Contingent Milestone Payments for each region to derive the fair value of the Contingent Milestone Payments. The following tables sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instrument (in thousands) for the six months ended June 30, 2017 and year ended December 31, 2016: Warrant Liability Put Option on 2016 Note and 2017 Note Contingent Consideration As of December 31, 2015 $ 274 $ — $ — Put option at issuance of 2016 Notes — 977 — Contingent consideration — — 9,524 Issuance of Series C Warrants 259 — — Change in fair value (230 ) 2 184 Balance at December 31, 2016 $ 303 $ 979 $ 9,708 Change in fair value 67 169 1,977 Put option at issuance of 2017 Notes — 828 — Reclassification of warrant liability to common equity (370 ) — — Conversion of 2016 and 2017 Notes — (1,976 ) — Balance at June 30, 2017 $ — $ — $ 11,685 The Company records changes in fair value of the contingent consideration in general and administrative expense. As of June 30, 2017, the Company determined that there would be a change to the Molgradex program due to the FDA’s guidance on the clinical program requirements for a New Drug Application submission in the U.S. related to the Molgradex product, which was issued in May 2017. Based on the FDA's guidance, the Company will modify certain criteria of its Molgradex development program which the Company believes will accelerate the development timeline in the U.S. The Company accordingly accounted for this change in its valuation of the contingent consideration as of June 30, 2017. The Company also accounted for the time value of money related to the Contingent Milestone Payments from December 31, 2016 to June 30, 2017 in its assessment. Accordingly, the related contingent consideration liability was remeasured to $11.7 million as of June 30, 2017. The Company did not transfer any assets measured at fair value on a recurring basis to or from Level 1 and Level 2 during the six months ended June 30, 2017 and 2016. |
Shareholders_ Equity
Shareholders’ Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Shareholders’ Equity | 9. Shareholders’ Equity Public Offering On June 7, 2017, the Company completed an underwritten public offering consisting of 9,034,210 shares of its common which included 613,157 shares upon the partial exercise of the underwriters' option to purchase additional shares of Savara common stock at the public offering price, less the underwriting discounts and commissions. The underwriters’ option to purchase the remaining balance of additional shares expired as of June 30, 2017. The net proceeds from the offering, after deducting the underwriting discounts and commissions and offering expenses, were approximately $39.5 million. The Company intends to use the net proceeds from this offering for working capital and general corporate purposes, which include, but are not limited to, the funding of clinical development of and pursuing regulatory approval for its product candidates, and general and administrative expenses. The public offering was executed under an existing shelf registration statement as previously filed with the Securities and Exchange Commission on August 12, 2015 and declared effective on August 19, 2015. Common Stock Sales Agreement/At The Market (ATM) On April 28, 2017, the Company entered into a Common Stock Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to which the Company may offer and sell, from time to time, through Wainwright, shares of Savara’s common stock, par value $0.001 per share (the “Shares”), having an aggregate offering price of not more than $18.0 million. The Shares will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3. Subject to the terms and conditions of the Sales Agreement, Wainwright will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has provided Wainwright with customary indemnification rights, and Wainwright will be entitled to a commission at a fixed commission rate equal to 3.0% of the gross proceeds per Share sold. Sales of the Shares, if any, under the Sales Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. The Company has no obligation to sell any of the Shares, and may at any time suspend sales under the Sales Agreement or terminate the Sales Agreement. On April 27, 2017, the Company delivered written notice to Cowen and Company, LLC that it was terminating its prior Sales Agreement, dated August 21, 2015. During the six months ended June 30, 2017, the Company sold 23,550 shares of common stock under the sales agreement, for net proceeds, of approximately $.1 million. Common Stock The Company’s amended and restated certificate of incorporation, effective upon the completion of the Merger, authorizes the Company to issue 501 million shares of common and preferred stock, consisting of 500 million shares of common stock with $0.001 par value and 1 million shares of preferred stock with $0.001 par value. The following is a summary of the Company’s common stock at June 30, 2017 and December 31, 2016, which reflects Savara as a private company prior to the Merger, as restated for the Exchange Ratio upon closing of the Merger. June 30, 2017 December 31, 2016 Common stock authorized 500,000,000 27,000,000 Common stock outstanding 24,203,464 3,162,573 The Company’s shares of common stock reserved for issuance as of June 30, 2017 and December 31, 2016 were as follows: June 30, 2017 December 31, 2016 Series A Preferred Stock — 1,799,906 Series B Preferred Stock — 5,675,387 Series C Preferred Stock — 4,452,582 Series B Warrants — 289,966 Series C Warrants — 125,885 Warrants from Mast acquired in Merger 1,152,231 — Warrants Converted Pursuant to Merger 74,992 — April 2017 SVB Warrants 24,725 — June 2017 SVB Warrants 41,736 — Stock options outstanding 1,746,500 1,814,645 Total shares reserved 3,040,184 14,158,371 Redeemable Convertible Preferred Stock Prior to the Merger and the effect of the Exchange Ratio, the Company had 11,927,875 issued and outstanding shares of preferred stock, of which 1,799,906 shares were designated as Series A redeemable convertible preferred stock ("Series A"), 5,675,387 shares were designated as Series B redeemable convertible preferred stock ("Series B"), and 4,452,582 shares were designated as Series C convertible preferred stock ("Series C"). In the Merger, the previously outstanding shares of Series A and Series B preferred stock were converted on a one-to-one basis into shares of common stock and then subject to the Exchange Ratio. Due to the conversion of the 2016 Notes and 2017 Notes upon the Merger, the holders of Series C preferred stock received broad-based weighted average anti-dilution protection such that the previously outstanding shares of Series C preferred stock were converted on a 1:1.01706 basis (the “Anti-Dilution Conversion Ratio”) into shares of common stock and then adjusted for the Exchange Ratio. Following the merger, there were no shares of preferred stock outstanding. Warrants Immediately prior to the Merger, Series B preferred stock warrants were exercised (either on a net exercise basis or for cash) and exchanged for 111,799 shares of the Company’s common stock after giving effect to the Exchange Ratio. Proceeds from the cash exercises were $.4 million. Pursuant to the Merger, the warrants for Series C preferred stock (“Series C Warrants”) were converted to warrants to purchase 74,992 shares of the Company’s common stock after giving effect to both the Anti-Dilution Conversion Ratio and Exchange Ratio. The following table summarizes the outstanding warrants for the Company’s common stock as of June 30, 2017: Shares Underlying Outstanding Warrants Exercise Price Expiration Date 401,391 $ 45.50 June 2018 314,446 $ 52.50 November 2019 32,467 $ 7.00 August 2020 403,927 $ 29.40 February 2021 74,992 $ 8.98 June 2021 24,725 $ 9.10 April 2027 41,736 $ 5.39 June 2027 1,293,684 Beneficial Conversion Feature Due to the conversion of the 2016 Notes and 2017 Notes upon the Merger resulting in an Anti-Dilution Conversion Ratio to the holders of Series C preferred stock and Series C Warrants, a Contingent Beneficial Conversion Feature (“BCF”) was triggered resulting in an intrinsic BCF value attributable to the securities of approximately $.4 million Financial Advisor Fees The Company executed an agreement with Canaccord Genuity in February 2016 as modified in March 2017 (collectively the “Advisory Agreement”) where the Company was obligated to pay Canaccord a success fee upon the closing of the Merger. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 10. Commitments Operating Leases On March 23, 2017, we entered into a sub-sublease agreement for approximately 13,707 square feet of rentable office space located in San Diego, California. The subleased space served as Mast’s corporate headquarters. However, as a result of the Merger, the Company no longer had an ongoing need for these facilities. The term of the sub-sublease commenced on July 1, 2017 and expires on May 31, 2020, coterminous with a sublease agreement dated June 19, 2014 with the Sublessor. Monthly base rent under the sub-sublease is approximately Settlement with Clinical Vendor On June 29, 2017, the Company executed a Memorandum of Understanding (“MOU”) with TFS Trial Form Support International AB (“TFS”) and DOT World Co., Ltd. (“DOT”) in order to resolve the issue of outstanding payment for services owed to DOT by Serendex in connection with the Molgradex clinical trial conducted prior to our acquisition of Serendex in July 2016. As part of this MOU, the Company agreed to pay TFS approximately 53 million Japanese Yen (approximately $.5 million) based on an installment payment schedule through December 31, 2017, if Serendex failed to pay the parties in full by June 30, 2017. As of June 30, 2017, Serendex failed to pay TFS in full. Therefore, the Company has accrued the settlement amount in full at June 30, 2017 and is pursuing collection from Serendex. Risk Management The Company maintains various forms of insurance that the Company's management believes are adequate to reduce the exposure to these risks to an acceptable level. Employment Agreements Certain executive officers are entitled to payments if they are terminated without cause or as a result of a change in control. Upon termination without cause, and not as a result of death or disability, each of such officers is entitled to receive a payment of base salary for three to twelve months following termination of employment and such officer will be entitled to continue to receive coverage under medical and dental benefit plans for three to twelve months or until such officer is covered under a separate plan from another employer. Upon a termination other than for cause or for good reason within twelve months following a change in control, each of such officers will be entitled to the same benefits as upon termination without cause and will also be entitled to certain acceleration of such officer's outstanding unvested options at the time of such termination. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions Pursuant to the public offering on June 7, 2017 (Note 9), Zambon SpA purchased 4,693,540 shares of the Company's common stock and holds approximately 19.4% of the Company's outstanding shares and voting interests of the Company as of June 30, 2017. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 12. Stock-Based Compensation A. 2008 Stock Option Plan The Company adopted the Savara Inc. Stock Option Plan (the “2008 Plan”), pursuant to which the Company had reserved shares for issuance to employees, directors, and consultants. The 2008 Plan includes 1) the option grant program providing for both incentive and non-qualified stock options, as defined by the Internal Revenue Code, and 2) the stock issuance program providing for the issuance of awards that are valued based upon common stock, including restricted stock, dividend equivalents, stock appreciation rights, phantom stock, and performance units. The 2008 Plan also allows eligible persons to purchase shares of common stock at an amount determined by the Plan Administrator. Upon a participant’s termination, the Company retains the right to repurchase unvested shares issued in conjunction with the stock issuance program at the fair market value per share as of the date of termination. Prior to the closing of the Merger, the Company had issued incentive and non-qualified options and restricted stock to employees and non-employees under the 2008 Plan. The terms of the stock options, including the exercise price per share and vesting provisions, are determined by the board of directors. Stock options were granted at exercise prices not less than the estimated fair market value of the Company’s common stock at the date of grant based upon objective and subjective factors including: third-party valuations, preferred stock transactions with third parties, current operating and financial performance, management estimates and future expectations. Stock option grants typically vest quarterly over three to four years and expire ten years from the grant date, and restricted stock grants vest on a quarterly basis over four years and expire ten years from the grant date. As of June 30, 2017, 562,596 shares of restricted stock had been issued excluding forfeited shares of restricted stock and after giving effect to the Exchange Ratio. Restricted Stock The Company values stock-based compensation related to grants of its restricted stock, which have been issued up to the Merger date, based on the fair value of the Company’s common stock as of the grant date and recognizes the expense over the requisite service period, usually four years, adjusted for estimated forfeitures. To determine the value of its common stock, the Company utilized the Option Pricing Method. The valuation methodology includes estimates and assumptions that require the Company’s judgment. Inputs used to determine the estimated fair value of the Company’s common stock include the equity value of the Company, expected timing to a liquidity event, a risk-free interest rate and the expected volatility. Generally, increases or decreases in these unobservable inputs would result in a directionally similar impact on the fair value measurement of the Company’s common stock. During the six months ended June 30, 2017 and 2016, the Company did not issue any shares of restricted stock to employees for compensation. Stock Options The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company’s employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. The Company uses the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumes no dividend yield because dividends are not expected to be paid in the near future, which is consistent with the Company’s history of not paying dividends. The valuation of stock options is also impacted by the valuation of common stock. Refer to the section above for further information on the valuation methodology utilized by the Company to determine the value of its common stock. Changes in 2008 Plan Subsequent to the Merger, the Company will no longer issue any stock based awards under the 2008 Plan. B. 2015 Omnibus Incentive Option Plan The Company operates the 2015 Omnibus Incentive Plan (the “2015 Plan”), which was amended and approved by stockholders in June 2015. The 2015 Plan provides for the grant of incentive and non-statutory stock options, as well as share appreciation rights, restricted shares, restricted share units (“RSUs”), performance units, shares and other share-based awards. Share-based awards are subject to terms and conditions established by our board of directors or the compensation committee of our board of directors. As of June 30, 2017, the number of shares of our common stock available for grant under the 2015 Plan was 523,321 shares. C. Stock-Based Award Activity The following table provides a summary of stock-based awards for the 2008 Plan and 2015 Plan (the “Plans”) for the six months ended June 30, 2016, after giving effect of the Reverse Stock Split and Exchange Ratio: Six months ended June 30, 2017 Six months ended June 30, 2016 Stock Options RSUs Total Stock Options RSUs Total Outstanding as of December 31 2,129,856 — 2,129,856 1,079,674 — 1,079,674 Granted 7,500 72,588 80,088 137,838 — 137,838 Exercised (4,822 ) (72,361 ) (77,183 ) (823 ) — (823 ) Forfeited (386,034 ) (227 ) (386,261 ) (642 ) — (642 ) Outstanding as of June 30 1,746,500 — 1,746,500 1,216,047 — 1,216,047 D. Stock-Based Compensation Stock-based compensation expense is included in the following line items in the accompanying statements of operations and comprehensive loss for the three months ended June 30, 2017 and 2016 and six months ended June 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Research and development $ 38 $ 22 $ 74 $ 45 General and administrative 117 29 162 67 Total stock-based compensation $ 155 $ 51 $ 236 $ 112 In May 2017, the Company accelerated the vesting of 67,755 stock options and 18,246 shares of restricted stock, after giving effect to the Exchange Ratio. The acceleration was a preexisting condition of the incentive stock awards at the issuance date and did not trigger a modification of the respective incentive stock awards. The Company recognized additional expense of $0.1 million during the six months ended June 30, 2017 as a result of the acceleration. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. Net Loss per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted net loss per share is the same as basic net loss per common share, since the effects of potentially dilutive securities are antidilutive. As of June 30, 2017 and 2016, potentially dilutive securities include: Six Months Ended June 30, 2017 June 30, 2016 Awards under equity incentive plan 1,746,500 1,216,047 Unvested restricted shares 40,604 144,612 Series A Contingent Redeemable Preferred Stock — 1,054,744 Series B Contingent Redeemable Preferred Stock — 3,325,776 Series C Contingent Redeemable Preferred Stock — 2,653,726 Warrants to purchase Series B Contingent Redeemable Preferred Stock — 169,816 Warrants to purchase common stock 1,293,684 — Total 3,080,788 8,564,721 The following table reconciles basic earnings per share of common stock to diluted earnings per share of common stock for the three months ended June 30, 2017 and 2016 and six months ended June 30, 2017 and 2016. Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Net loss $ (11,504 ) $ (2,051 ) $ (16,477 ) $ (3,728 ) Accretion of convertible redeemable preferred stock (554 ) (2 ) (578 ) (26 ) Deemed dividend on beneficial conversion feature (404 ) — (404 ) — Net loss attributable to common stockholders (12,462 ) (2,053 ) (17,459 ) (3,754 ) Undistributed earnings and net loss attributable to common stockholders, basic and diluted (12,462 ) (2,053 ) (17,459 ) (3,754 ) Weighted average common shares outstanding, basic and diluted 13,807,861 1,043,984 8,465,053 1,034,553 Basic and diluted EPS $ (0.90 ) $ (1.97 ) $ (2.06 ) $ (3.63 ) |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) as defined by the Financial Accounting Standards Board (“FASB”). These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The interim condensed consolidated financial statements included in this document are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company’s financial position as of June 30, 2017, and its results of operations for the six months ended June 30, 2017 and 2016, and cash flows for the six months ended June 30, 2017 and 2016. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other future annual or interim period. The December 31, 2016 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. |
Liquidity | Liquidity As of June 30, 2017, the Company had an accumulated deficit of approximately $54.9 million. The Company also had negative cash flow from operations of approximately $10.5 million during the six months ended June 30, 2017. The cost to further develop and obtain regulatory approval for any drug is substantial and, as noted below, the Company may have to take certain steps to maintain a positive cash position. Accordingly, the Company will need additional capital to further fund the development of, and seek regulatory approvals for, its product candidates and begin to commercialize any approved products. The Company is currently focused primarily on the development of respiratory drugs and believes such activities will result in the Company’s continued incurrence of significant research and development and other expenses related to those programs. If the clinical trials for any of the Company’s product candidates fail or produce unsuccessful results and those product candidates do not gain regulatory approval, or if any of the Company’s product candidates, if approved, fails to achieve market acceptance, the Company may never become profitable. Even if the Company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. The Company intends to cover its future operating expenses through cash and cash equivalents on hand and through a combination of equity offerings, debt financings, government or other third-party funding, and other collaborations and strategic alliances. The Company cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its stockholders. While the Company has cash and cash equivalents of $61.1 million as of June 30, 2017, we intend to continue to raise additional capital through the issuance of additional equity and potentially through borrowings, and strategic alliances with partner companies. However, if such financings are not available timely and at adequate levels, the Company will need to reevaluate its operating plans. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements of the Company are stated in U.S. dollars and are prepared using U.S. GAAP. These financial statements include the accounts of the Company and its wholly owned subsidiaries. The financial statements of the Company’s wholly owned subsidiaries are recorded in their functional currency and translated into the reporting currency. The cumulative effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency is reported in Accumulated Other Comprehensive Income. All intercompany transactions and accounts have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management’s estimates include those related to the accrual of research and development costs, the valuation of preferred and common shares, certain financial instruments recorded at fair value, stock-based compensation, and the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances. Accordingly, actual results could be materially different from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The product candidates being developed by the Company require approvals from the U.S. Food and Drug Administration (FDA) or foreign regulatory agencies prior to commercial sales. There can be no assurance that the Company’s product candidates will receive the necessary approvals. If the Company is denied regulatory approval of its product candidates, or if approval is delayed, it may have a material adverse impact on the Company’s business, results of operations and its financial position. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, risks related to the successful discovery and development of drug candidates, raising additional capital, development of competing drugs and therapies, protection of proprietary technology and market acceptance of the Company’s products. As a result of these and other factors and the related uncertainties, there can be no assurance of the Company’s future success. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and institutional bank money market accounts with original maturities of three months or less when acquired and are stated at cost, which approximates fair value. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. The Company places its cash and cash equivalents with a limited number of high quality financial institutions and at times may exceed the amount of insurance provided on such deposits. |
Accrued Research and Development Costs | Accrued Research and Development Costs The Company records the costs associated with research nonclinical studies, clinical trials, and manufacturing development as incurred. These costs are a significant component of the Company’s research and development expenses, with a substantial portion of the Company’s on-going research and development activities conducted by third-party service providers, including contract research and manufacturing organizations. The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which materials or services are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. The Company makes significant judgments and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized as the contracted services are performed. As actual costs become known, the Company adjusts its prepaids and accruals. Inputs, such as the services performed, the number of patients enrolled, or the study duration, may vary from the Company’s estimates resulting in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. The Company has not experienced any material deviations between accrued and actual research and development expenses. |
Business Combinations | Business Combinations Assets acquired and liabilities assumed as part of a business acquisition are recorded at their estimated fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and, in some cases, assumptions with respect to the timing and amount of future revenue and expenses associated with an asset. |
Goodwill and Acquired In-Process Research and Development (IPR&D) | Goodwill and Acquired In-Process Research and Development (IPR&D) Goodwill and acquired IPR&D are not amortized but are tested annually for impairment or more frequently if impairment indicators exist. The Company adopted accounting guidance related to annual and interim goodwill and acquired IPR&D impairment tests which allows the Company to first assess qualitative factors before performing a quantitative assessment of the fair value of a reporting unit. If it is determined on the basis of qualitative factors that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative impairment test is required. The Company experienced a $.1 million and $.4 million increase in the carrying value of goodwill and IPR&D, respectively, related to Savara ApS, from the acquisition date, July 15, 2016, which was due to foreign currency translation. Additional goodwill and IPR&D were recorded with respect to the Merger. |
Tax Refund Receivable | Tax Refund Receivable The Company has recorded a Danish tax credit earned by its subsidiary, Savara ApS for the post-acquisition period in 2016 and the six months ended June 30, 2017. Under Danish Tax Law, Denmark remits a research and development tax credit equal to 22% of qualified research and development expenditures, not to exceed established thresholds. As of June 30, 2017, the credits had not yet been received and a receivable of $1.1 million was recorded on the balance sheet in prepaid expenses and other current assets. The portion of the total Danish tax credit related to the post-acquisition period in 2016 of approximately $.4 million is expected to be collected in November 2017. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. Our chief operating decision maker is the chief executive officer. We have one operating segment, specialty pharmaceuticals within the respiratory system. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows: • Level 1 – Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 – Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and • Level 3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. Financial instruments carried at fair value include cash and cash equivalents and contingent consideration related to the acquisition of Serendex for which any change is reflected in general and administrative expense, as well as certain warrants classified as liabilities and embedded put options separated from the convertible promissory notes which were converted to common equity or derecognized during the period ended June 30, 2017 as a result of the Merger (Notes 6, 8, and 9). These remaining financial instruments are carried at fair value on a recurring basis. Financial instruments not carried at fair value include accounts payable and accrued liabilities. The carrying amounts of these financial instruments approximate fair value due to the highly liquid nature of these short-term instruments. |
Net Loss per Share | Net Loss per Share Basic net loss attributable to common stockholders per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period without consideration of common stock equivalents. Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share for all periods presented as the inclusion of all potential dilutive securities would have been antidilutive. |
Redeemable Convertible Preferred Stock and Series B and Series C Warrants | Redeemable Convertible Preferred Stock and Series B and Series C Warrants The Series A, Series B, and Series C redeemable convertible preferred stock, previously classified in temporary equity as it was redeemable at the written request of the holders of at least two-thirds of the then outstanding shares of preferred stock, at any time after October 31, 2022, was converted to common stock on the effective date of the Merger subject to the Exchange Ratio. Additionally, certain outstanding warrants to purchase the Series B convertible preferred stock (“Series B Warrants”) previously classified as liabilities were exercised on the effective date of the Merger with any residual Series B warrants expiring in May 2017. Certain outstanding warrants to purchase the Series C redeemable convertible preferred stock (“Series C Warrants”) were reclassified from a liability to common equity as the Series C Warrants have been converted to warrants to purchase common stock subject to the Exchange Ratio following the Merger. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes the cost of stock-based awards granted to employees based on the estimated grant-date fair value of the awards. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The Company recognizes the compensation costs for awards that vest over several years on a straight-line basis over the vesting period (see Note 12). Forfeitures are recognized when they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures arise. The Company recognizes the cost of stock-based awards granted to nonemployees at their then-current fair values as services are performed, and such awards are remeasured through the counterparty performance date. |
Manufacturing Commitments and Contingencies | Manufacturing Commitments and Contingencies The Company is subject to various manufacturing royalties and payments related to its product candidate, Molgradex. Upon the successful development, registration and attainment of approval by the proper health authorities, such as the FDA, in any territory except Latin America, Central America and Mexico, the Company must pay a royalty of three percent (3%) on annual net sales to the manufacturer of its Active Pharmaceutical Ingredients (“API”). Under this agreement with the API manufacturer, no signing fee or milestones are included in the royalty payments, and there is no minimum royalty. Additionally, Savara has a commitment to acquire a working cell bank and a master cell bank for approximately $2.0 million from this API manufacturer in the third quarter of 2017. The Company is also subject to certain contingent milestone payments up to approximately 7.0 million euros based upon various development activities and regulatory approvals payable to the Company’s manufacturer of its nebulizer used to administer Molgradex. In addition to these milestones, the Company will owe a royalty to the manufacturer of its nebulizer based on net sales. The royalty rate ranges from three and a half percent (3.5%) to five percent (5%) depending on the device technology used by the Company to administer the product. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (“ASU 2016-02”). The update aims at making leasing activities more transparent and comparable, and requires substantially all leases to be recognized by lessees on their balance sheet as a right-of-use asset and a corresponding lease liability, including leases currently accounted for as operating leases. The update also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial statements. In August 2016, the FASB issued Accounting Standards Update 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which intended to add or clarify guidance on the classification of certain cash receipts and payments on the statement of cash flows. The new guidance addresses cash flows related to the following: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of predominance principle to separately identifiable cash flows. ASU 2016-15 is effective for the Company for annual periods beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”), which intended to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for the Company for annual periods beginning after December 15, 2017. The Company’s early adoption of this standard did not have a material impact on the Company’s financial statements. In May 2017, the FASB issued Accounting Standards Update 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which intended to provide clarity when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective for the Company for annual periods beginning on or after December 15, 2017 with early adoption permitted. The Company’s early adoption of this standard did not have a material impact on the Company’s financial statements. |
Prepaid Expenses and Other Cu21
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses, consisted of (in thousands): June 30, 2017 December 31, 2016 R&D tax credit receivable $ 1,103 $ 357 Prepaid clinical trial costs 650 243 VAT receivable 91 111 Prepaid insurance 368 35 Deposits and other 329 94 Total prepaid expenses and other current assets $ 2,541 $ 840 |
Accrued Expenses and Other Li22
Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities, consisted of (in thousands): June 30, 2017 December 31, 2016 Accrued contracted research and development costs $ 4,100 $ 1,855 Accrued general and administrative costs 849 458 Accrued compensation 527 117 Other 11 47 Total accrued expenses and other liabilities $ 5,487 $ 2,477 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The total purchase price for Mast was $35.8 million based on the fair value of the outstanding Mast equity on the date of the Merger which was allocated as follows: Purchase Consideration (in thousands) Fair value of Mast shares outstanding $ 33,117 Fair value of Mast equity 2,729 Fair value of total consideration $ 35,846 Assets acquired and liabilities assumed Cash and cash equivalents $ 3,442 Tangible assets 283 In-process research and development intangible assets 21,692 Liabilities (2,396 ) Debt (3,407 ) Deferred tax liability (8,677 ) Total assets acquired and liabilities assumed 10,937 Goodwill 24,909 $ 35,846 |
Pro forma Condensed Consolidated Financial Information | Pro forma condensed consolidated financial information for the six months ended June 30, 2017 and the year ended December 31, 2016 (unaudited) is as follows: Six Months Ended June 30, 2017 Year Ended December 31, 2016 Net revenues $ 94 $ 528 Net loss $ (14,245 ) $ (42,560 ) |
Debt Facility (Tables)
Debt Facility (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Components of Debt Facility Carrying Value | The following table summarizes the components of the debt facility carrying value (in thousands): As of June 30, 2017 Short-term Long-term Principal payments to lender and end of term charge $ — $ 15,025 Debt Issuance costs — (99 ) Debt discount related to warrants — (347 ) Carrying Value $ — $ 14,579 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Instruments | The fair value of these instruments as of June 30, 2017 and December 31, 2016 was as follows (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2017: Contingent consideration $ — $ — $ 11,685 As of December 31, 2016: Put option $ — $ — $ 979 Warrant liability $ — $ — $ 303 Contingent consideration $ — $ — $ 9,708 |
Summary of Assumptions Used to Value Put Option on 2016 Notes and 2017 Notes | The Company used the following assumptions to value the put option on the 2016 Notes and 2017 Notes Assumption June 30, 2017 December 31, 2016 Discount rate — 0.43 % Probability of event — 85.0 % |
Summary of Assumptions Used in Valuing Warrants | The assumptions used in valuing these warrants are presented in the table below. Assumption June 30, 2017 December 31, 2016 Expected term — 0.42 – 4.50 Expected dividend yield — — Expected volatility — 44.65% - Risk-free interest rate — 0.58% - 1.82% |
Summary of Changes in Fair Value of Company's Level 3 Financial Instrument | The following tables sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instrument (in thousands) for the six months ended June 30, 2017 and year ended December 31, 2016: Warrant Liability Put Option on 2016 Note and 2017 Note Contingent Consideration As of December 31, 2015 $ 274 $ — $ — Put option at issuance of 2016 Notes — 977 — Contingent consideration — — 9,524 Issuance of Series C Warrants 259 — — Change in fair value (230 ) 2 184 Balance at December 31, 2016 $ 303 $ 979 $ 9,708 Change in fair value 67 169 1,977 Put option at issuance of 2017 Notes — 828 — Reclassification of warrant liability to common equity (370 ) — — Conversion of 2016 and 2017 Notes — (1,976 ) — Balance at June 30, 2017 $ — $ — $ 11,685 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Summary of Company’s Common Stock | The following is a summary of the Company’s common stock at June 30, 2017 and December 31, 2016, which reflects Savara as a private company prior to the Merger, as restated for the Exchange Ratio upon closing of the Merger. June 30, 2017 December 31, 2016 Common stock authorized 500,000,000 27,000,000 Common stock outstanding 24,203,464 3,162,573 |
Company’s Shares of Common Stock Reserved for Issuance | The Company’s shares of common stock reserved for issuance as of June 30, 2017 and December 31, 2016 were as follows: June 30, 2017 December 31, 2016 Series A Preferred Stock — 1,799,906 Series B Preferred Stock — 5,675,387 Series C Preferred Stock — 4,452,582 Series B Warrants — 289,966 Series C Warrants — 125,885 Warrants from Mast acquired in Merger 1,152,231 — Warrants Converted Pursuant to Merger 74,992 — April 2017 SVB Warrants 24,725 — June 2017 SVB Warrants 41,736 — Stock options outstanding 1,746,500 1,814,645 Total shares reserved 3,040,184 14,158,371 |
Summary of Outstanding Warrants for Company’s Common Stock | The following table summarizes the outstanding warrants for the Company’s common stock as of June 30, 2017: Shares Underlying Outstanding Warrants Exercise Price Expiration Date 401,391 $ 45.50 June 2018 314,446 $ 52.50 November 2019 32,467 $ 7.00 August 2020 403,927 $ 29.40 February 2021 74,992 $ 8.98 June 2021 24,725 $ 9.10 April 2027 41,736 $ 5.39 June 2027 1,293,684 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Awards After Effect of Reverse Stock Split and Exchange Ratio | The following table provides a summary of stock-based awards for the 2008 Plan and 2015 Plan (the “Plans”) for the six months ended June 30, 2016, after giving effect of the Reverse Stock Split and Exchange Ratio: Six months ended June 30, 2017 Six months ended June 30, 2016 Stock Options RSUs Total Stock Options RSUs Total Outstanding as of December 31 2,129,856 — 2,129,856 1,079,674 — 1,079,674 Granted 7,500 72,588 80,088 137,838 — 137,838 Exercised (4,822 ) (72,361 ) (77,183 ) (823 ) — (823 ) Forfeited (386,034 ) (227 ) (386,261 ) (642 ) — (642 ) Outstanding as of June 30 1,746,500 — 1,746,500 1,216,047 — 1,216,047 |
Estimated Stock-based Compensation Expense | Stock-based compensation expense is included in the following line items in the accompanying statements of operations and comprehensive loss for the three months ended June 30, 2017 and 2016 and six months ended June 30, 2017 and 2016 (in thousands): Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Research and development $ 38 $ 22 $ 74 $ 45 General and administrative 117 29 162 67 Total stock-based compensation $ 155 $ 51 $ 236 $ 112 |
Net Loss Per Share - (Tables)
Net Loss Per Share - (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Potentially Dilutive Securities | As of June 30, 2017 and 2016, potentially dilutive securities include: Six Months Ended June 30, 2017 June 30, 2016 Awards under equity incentive plan 1,746,500 1,216,047 Unvested restricted shares 40,604 144,612 Series A Contingent Redeemable Preferred Stock — 1,054,744 Series B Contingent Redeemable Preferred Stock — 3,325,776 Series C Contingent Redeemable Preferred Stock — 2,653,726 Warrants to purchase Series B Contingent Redeemable Preferred Stock — 169,816 Warrants to purchase common stock 1,293,684 — Total 3,080,788 8,564,721 |
Reconciles Basic Earnings Per Share and Diluted Earnings Per Share of Common Stock | The following table reconciles basic earnings per share of common stock to diluted earnings per share of common stock for the three months ended June 30, 2017 and 2016 and six months ended June 30, 2017 and 2016. Three Months Ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Net loss $ (11,504 ) $ (2,051 ) $ (16,477 ) $ (3,728 ) Accretion of convertible redeemable preferred stock (554 ) (2 ) (578 ) (26 ) Deemed dividend on beneficial conversion feature (404 ) — (404 ) — Net loss attributable to common stockholders (12,462 ) (2,053 ) (17,459 ) (3,754 ) Undistributed earnings and net loss attributable to common stockholders, basic and diluted (12,462 ) (2,053 ) (17,459 ) (3,754 ) Weighted average common shares outstanding, basic and diluted 13,807,861 1,043,984 8,465,053 1,034,553 Basic and diluted EPS $ (0.90 ) $ (1.97 ) $ (2.06 ) $ (3.63 ) |
Description of Business and B29
Description of Business and Basis of Presentation - Additional Information (Detail) | Apr. 27, 2017shares | Jun. 30, 2017USD ($) | Jun. 30, 2017Segment |
Description Of Business And Basis Of Presentation [Line Items] | |||
Number of operating segments | Segment | 1 | ||
Product revenue from inception to date | $ | $ 0 | ||
Savara Inc. [Member] | |||
Description Of Business And Basis Of Presentation [Line Items] | |||
Percentage of shares owned by preexisting equity holders | 77.00% | ||
Mast [Member] | |||
Description Of Business And Basis Of Presentation [Line Items] | |||
Merger agreement, effective date | Jan. 6, 2017 | ||
Business combination completion date | Apr. 27, 2017 | ||
Exchange ratio for each one outstanding common stock under merger agreement | 0.5860 | ||
Reverse stock split ratio | 0.0142 | ||
Reverse stock split ratio, description | one new share for every 70 shares | ||
Number of fractional shares issued | shares | 0 | ||
Percentage of shares owned by preexisting equity holders | 23.00% |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Additional Information (Detail) € in Millions | 1 Months Ended | 6 Months Ended | |||||
Nov. 30, 2017USD ($) | Jun. 30, 2017USD ($)Segment | Jun. 30, 2017EUR (€)Segment | Jun. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Accumulated deficit | $ (54,883,000) | $ (38,406,000) | |||||
Cash flow from operations | (10,515,000) | $ (3,315,000) | |||||
Cash and cash equivalents | $ 61,133,000 | $ 14,059,000 | $ 13,373,000 | $ 16,683,000 | |||
Cash and cash equivalents with original maturities | three months or less | three months or less | |||||
Number of operating segments | Segment | 1 | 1 | |||||
Active Pharmaceutical Ingredients [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Royalty percent on net sale | 3.00% | 3.00% | |||||
Minimum royalty payment | $ 0 | ||||||
Amount of signing fee or milestones included in royalty payments | $ 0 | ||||||
Agreement description | Under this agreement with the API manufacturer, no signing fee or milestones are included in the royalty payments, and there is no minimum royalty. Additionally, Savara has a commitment to acquire a working cell bank and a master cell bank for approximately $2.0 million from this API manufacturer in the third quarter of 2017 | Under this agreement with the API manufacturer, no signing fee or milestones are included in the royalty payments, and there is no minimum royalty. Additionally, Savara has a commitment to acquire a working cell bank and a master cell bank for approximately $2.0 million from this API manufacturer in the third quarter of 2017 | |||||
Nebulizer [Member] | Maximum [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Royalty percent on net sale | 5.00% | 5.00% | |||||
Contingent milestone payments | € | € 7 | ||||||
Nebulizer [Member] | Minimum [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Royalty percent on net sale | 3.50% | 3.50% | |||||
Series A, Series B, and Series C Redeemable Convertible Preferred Stock [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Percentage of redeemable convertible preferred stock | 66.66% | 66.66% | |||||
Series B Warrants [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Warrants expiration | 2017-05 | 2017-05 | |||||
Scenario, Forecast [Member] | Active Pharmaceutical Ingredients [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Purchase amounted commitment | $ 2,000,000 | ||||||
Savara ApS [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Carrying value of goodwill | $ 100,000 | ||||||
Carrying value of IPR&D | $ 400,000 | ||||||
Research and development tax credits | 22.00% | 22.00% | |||||
Danish tax credit expected collection period | 2017-11 | 2017-11 | |||||
Savara ApS [Member] | Scenario, Forecast [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Expected tax credit Related to the post acquisition period | $ 400,000 | ||||||
Savara ApS [Member] | Prepaid Expenses and Other Current Assets [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Research and development tax credits receivable | $ 1,100,000 |
Prepaid Expenses and Other Cu31
Prepaid Expenses and Other Current Assets - Summary of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Prepaid Expense And Other Assets Current [Abstract] | ||
R&D tax credit receivable | $ 1,103 | $ 357 |
Prepaid clinical trial costs | 650 | 243 |
VAT receivable | 91 | 111 |
Prepaid insurance | 368 | 35 |
Deposits and other | 329 | 94 |
Total prepaid expenses and other current assets | $ 2,541 | $ 840 |
Accrued Expenses and Other Li32
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accrued contracted research and development costs | $ 4,100 | $ 1,855 |
Accrued general and administrative costs | 849 | 458 |
Accrued compensation | 527 | 117 |
Other | 11 | 47 |
Total accrued expenses and other liabilities | $ 5,487 | $ 2,477 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) | Apr. 27, 2017 | Jul. 15, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||
Purchase price based on the fair value of outstanding equity | $ 35,846,000 | ||||||
Net loss before income tax | $ (11,974,000) | $ (2,051,000) | $ (17,184,000) | $ (3,728,000) | |||
Mast [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination completion date | Apr. 27, 2017 | ||||||
Purchase price based on the fair value of outstanding equity | 35,800,000 | ||||||
Merger agreement, effective date | Jan. 6, 2017 | ||||||
Revenue | $ 0 | ||||||
Net loss before income tax | 600,000 | ||||||
Transaction costs | $ 8,400 | $ 600 | |||||
Reduction in historical interest expense due to new merger debt and extinguishment of pre-merger debt | $ 1,400 | ||||||
Mast [Member] | General and Administrative Expense [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Transaction costs | $ 2,100,000 | ||||||
Serendex [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination completion date | Jul. 15, 2016 | ||||||
Merger agreement, effective date | May 13, 2016 | ||||||
Business acquisition, equity interest issued or issuable, description | On July 15, 2016, the Company completed the acquisition of Serendex through its wholly-owned subsidiary, Savara ApS, a limited liability company established under the laws in Denmark. Through this acquisition, the Company gained access to the late-stage asset, Molgradex, for the treatment of PAP, with a Phase 3 clinical study ongoing in the EU and Japan which has since been expanded to the United States. In addition to Molgradex, Savara gained access to an experienced development team familiar with all aspects of the Molgradex program. Pursuant to the Business Transfer Agreement, the Company issued 1,965,400 shares of the Company’s common stock to the seller, after giving effect of the Exchange Ratio and agreed to pay up to $21.5 million of contingent cash consideration upon the attainment of certain contingent development milestones of Molgradex. | ||||||
Common stock shares issued | 1,965,400 | ||||||
Serendex [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Contingent cash consideration | $ 21,500 | $ 21,500 |
Acquisitions - Summary of Purch
Acquisitions - Summary of Purchase Price Allocation - (Detail) - USD ($) $ in Thousands | Apr. 27, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Business Combinations [Abstract] | |||
Fair value of Mast shares outstanding | $ 33,117 | ||
Fair value of Mast equity | 2,729 | ||
Fair value of total consideration | 35,846 | ||
Assets acquired and liabilities assumed | |||
Cash and cash equivalents | 3,442 | ||
Tangible assets | 283 | ||
In-process research and development intangible assets | 21,692 | ||
Liabilities | (2,396) | ||
Debt | (3,407) | ||
Deferred tax liability | (8,677) | ||
Total assets acquired and liabilities assumed | 10,937 | ||
Goodwill | 24,909 | $ 28,222 | $ 3,051 |
Total purchase consideration | $ 35,846 |
Acquisitions - Pro forma Conden
Acquisitions - Pro forma Condensed Consolidated Financial Information - (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Business Combinations [Abstract] | ||
Net revenues | $ 94 | $ 528 |
Net loss | $ (14,245) | $ (42,560) |
Convertible Promissory Notes -
Convertible Promissory Notes - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)d | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)d$ / shares | |
Debt Instrument [Line Items] | |||||
Borrowed from convertible promissory note | $ 3,569,000 | ||||
Interest expense | $ 516,000 | $ 7,000 | 761,000 | $ 17,000 | |
Loss on extinguishment of debt | 1,816,000 | $ 1,816,000 | |||
2016 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowed from convertible promissory note | $ 4,400,000 | ||||
Convertible promissory note, accrued interest | 8.00% | ||||
Convertible promissory note, maturity date | Jun. 30, 2018 | ||||
Loss on extinguishment of debt | $ 900,000 | ||||
2016 Notes [Member] | Accretion of Total Discount [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 200,000 | ||||
2016 Notes [Member] | Put Option [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative liabilities, fair value | 1,000,000 | 1,000,000 | |||
2016 Notes [Member] | Series C Reedemable Convertible Preferred Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Description of change in control conversion | (i) a merger or consolidation of the Company into or with another entity after which the stockholders of the Company immediately prior to such transaction do not own, immediately following the consummation of the transaction by virtue of their shares in the Company or securities received in exchange for such shares in connection with the transaction, a majority of the voting power of the surviving entity in proportions substantially identical to those that existed immediately prior to such transaction and with substantially the same rights, preferences, privileges and restrictions as the shares they held immediately prior to the transaction, (ii) the sale, transfer or other disposition (but not including a transfer or disposition by pledge or mortgage to a bona fide lender) of all or substantially all of the assets of the Company (other than to a wholly-owned subsidiary), or (iii) the sale or transfer by the Company or its stockholders of more than 50% of the voting power of the Company in a transaction or series of related transactions other than in a transaction or series of transactions effected by the Company primarily for financing purposes. | ||||
2016 Notes [Member] | Series C Preferred Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible promissory note, conversion price | $ / shares | $ 5.2605 | ||||
2016 Notes [Member] | Series C Warrant Liability [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative liabilities, fair value | $ 300,000 | $ 300,000 | |||
2016 Notes [Member] | Minimum [Member] | Series C Reedemable Convertible Preferred Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Sale or transfer by the company or its stockholders voting power | 50.00% | ||||
2016 Notes [Member] | Private Placement Automatic Conversion [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible promissory note, conversion price | $ / shares | $ 0.8 | ||||
Convertible promissory note, discount rate | 20.00% | ||||
Convertible promissory note, valuation cap | $ 125,000,000 | ||||
Convertible promissory note, conversion feature | The Note Conversion Price is the lesser of (A) (i) the price per share of the Next Round Securities, Qualified Financing Shares or Regulation A Offering Shares, as the case may be, times (ii) 0.8 (i.e. a 20% discount), or (B) the quotient obtained by dividing $125 million (the “Valuation Cap”) by the Company’s fully diluted capitalization immediately prior to the initial closing of the Qualified Financing, Non-Qualified Financing, Qualified Regulation A Offering or Non-Qualified Regulation A Offering in which the Notes are converted. Non-Qualified Private Placement Financing means any transaction (or series of related transactions) after the date of the 2016 Notes and before Maturity in which the Company issues and sells shares of its capital stock in any Private Placement transaction that is not deemed to be a Qualified Private Placement Financing. Next Round Securities means the equity shares sold in a Non-Qualified Private Placement Financing. | ||||
2016 Notes [Member] | Private Placement Automatic Conversion [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from offering excluding amounts received on conversion of notes | 5,000,000 | ||||
2016 Notes [Member] | Non-Qualified Private Placement Financing [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from offering excluding amounts received on conversion of notes | 5,000,000 | ||||
2016 Notes [Member] | Preferred Stock [Member] | Private Placement Automatic Conversion [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate gross proceeds from exchange | $ 5,000,000 | ||||
2016 Notes [Member] | Common Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible promissory note, conversion feature | The entire principal amount plus any accrued interest under the 2016 Notes automatically converts into shares of Common Stock at $4.22 per share, which was 80% of the estimated Merger per share value, for notes issued on or prior to August 15, 2016 and 80% of the amount equal to the average trading price of Mast’s common stock for the twenty day period ending two days prior to the closing of the Merger, as adjusted by the Exchange Ratio described in the Merger Agreement. | ||||
Estimated merger conversion price for notes issued | $ / shares | $ 4.22 | ||||
Percentage of estimated merger per share | 80.00% | ||||
Percentage of amount equal to average trading price of common stock | 80.00% | ||||
Number of trading days | d | 20 | ||||
2017 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowed from convertible promissory note | $ 3,600,000 | ||||
Convertible promissory note, accrued interest | 8.00% | 8.00% | |||
Convertible promissory note, maturity date | Jun. 30, 2018 | ||||
Loss on extinguishment of debt | $ 900,000 | ||||
2017 Notes [Member] | Accretion of Total Discount [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 5,000 | ||||
2017 Notes [Member] | Put Option [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative liabilities, fair value | $ 800,000 | $ 800,000 | |||
2017 Notes [Member] | Common Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Convertible promissory note, conversion feature | Upon such occurrence, the 2017 Notes shall be converted into that number of shares of common stock determined by dividing (i) the aggregate outstanding principal amount of the 2017 Notes, any accrued but unpaid interest, and any other amounts payable under the 2017 Notes by (ii) the Reverse Merger Conversion Price. The Reverse Merger Conversion Price means eighty percent of the amount equal to the average trading price of Mast’s common stock for the twenty-day period prior to the Merger date | ||||
Percentage of amount equal to average trading price of common stock | 80.00% | ||||
Number of trading days | d | 20 |
Debt Facility - Additional Info
Debt Facility - Additional Information (Detail) - USD ($) | Jun. 07, 2017 | May 02, 2017 | Apr. 28, 2017 | Jun. 30, 2017 | Jun. 15, 2017 |
Line Of Credit Facility [Line Items] | |||||
Repayment of principal debt and fees | $ 3,567,000 | ||||
Minimum market cap upon completion of merger | $ 100,000,000 | ||||
Issuance of common stock upon public offering, net closing costs, shares | 9,034,210 | ||||
Common stock, shares sold | 23,550 | ||||
Final payment due on date of maturity | $ 900,000 | ||||
Warrants issued to purchase shares of common stock | 1,293,684 | ||||
Amortization of debt discount | $ 400,000 | ||||
April 2017 Warrants [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Warrants, expected volatility rate | 71.42% | ||||
Warrants, expected term | 10 years | ||||
Warrants, risk free interest rate | 2.33% | ||||
Warrants, expected dividend yield | 0.00% | ||||
June 2017 Warrants [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Warrants, expected volatility rate | 71.57% | ||||
Warrants, expected term | 10 years | ||||
Warrants, risk free interest rate | 2.16% | ||||
Warrants, expected dividend yield | 0.00% | ||||
Common Stock [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Issuance of common stock upon public offering, net closing costs, shares | 9,034,210 | ||||
Common Stock [Member] | April 2017 Warrants [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Common stock warrants issued to purchase common stock percentage on funded amount | 3.00% | ||||
Warrants issued to purchase shares of common stock | 24,725 | ||||
Exercise price of warrants per share | $ 9.10 | ||||
Warrants expiration term | 10 years | ||||
Warrants expiration date | Apr. 28, 2027 | ||||
Common Stock [Member] | June 2017 Warrants [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Common stock warrants issued to purchase common stock percentage on funded amount | 3.00% | ||||
Warrants issued to purchase shares of common stock | 41,736 | ||||
Exercise price of warrants per share | $ 5.39 | ||||
Warrants expiration term | 10 years | ||||
Warrants expiration date | Jun. 15, 2027 | ||||
Loan and Security Agreement [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Repayment of principal debt and fees | $ 3,700,000 | ||||
Minimum new capital raise targeted through financing | $ 40,000,000 | ||||
Loan and Security Agreement [Member] | Second Tranche [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Loan borrowed amount | $ 7,500,000 | ||||
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | Term Loan [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Loan and security agreement, maximum amount | $ 15,000,000 | ||||
Interest rate, basis spread | 4.25% | ||||
Loan agreement payment terms | The Loan Agreement bears interest at the prime rate reported in The Wall Street Journal, plus a spread of 4.25%. Interest only payments are due through September 2018 followed by monthly payments of principal plus interest over the following thirty (30) months. Since the second tranche was fully extended, the interest only period was extended for an additional six (6) months, through March 2019 followed by monthly payments of principal plus interest over the following twenty-four (24) months through the maturity date of March 1, 2021 under the Loan Agreement provisions. | ||||
Debt instrument interest only payment maturity date | 2018-09 | ||||
Debt instrument principal and interest payment period | 30 months | ||||
Debt instrument extended interest only payment maturity date | 2019-03 | ||||
Debt instrument interest only payment extended period | 6 months | ||||
Debt instrument principal and interest payment extended period | 24 months | ||||
Debt instrument, frequency of periodic interest payments | monthly | ||||
Debt instrument maturity date | Mar. 1, 2021 | ||||
Customary closing fees | 6.00% | ||||
Payments of debt issuance costs | $ 100,000 | ||||
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | Term Loan [Member] | First Tranche [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Loan and security agreement, maximum amount | 7,500,000 | ||||
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | Term Loan [Member] | Second Tranche [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Loan and security agreement, maximum amount | $ 7,500,000 |
Debt Facility - Summary of Comp
Debt Facility - Summary of Components of Debt Facility Carrying Value (Detail) $ in Thousands | Jun. 30, 2017USD ($) |
Debt Disclosure [Abstract] | |
Principal payments to lender and end of term charge, Long-term | $ 15,025 |
Debt issuance costs, Long-term | (99) |
Debt discount related to warrants, Long-term | (347) |
Carrying value, Long-term | $ 14,579 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Financial Instruments (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrant liability | $ 303 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 11,685 | 9,708 |
Put option | 979 | |
Warrant liability | $ 303 |
Fair Value Measurements - Sum40
Fair Value Measurements - Summary of Assumptions Used to Value Put Option on 2016 Notes and 2017 Notes (Detail) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Discount rate | 0.43% |
Probability of event | 85.00% |
Fair Value Measurements - Sum41
Fair Value Measurements - Summary of Assumptions Used in Valuing Warrants (Detail) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Expected term | 5 months 1 day |
Expected volatility | 44.65% |
Risk-free interest rate | 0.58% |
Maximum [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Expected term | 4 years 6 months |
Expected volatility | 60.66% |
Risk-free interest rate | 1.82% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair value, assets, level 1 to level 2 transfers, amount | $ 0 | $ 0 | |
Fair value, assets, level 2 to level 1 transfers, amount | 0 | $ 0 | |
Contingent Consideration [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Contingent consideration liability | 11,685 | $ 9,708 | |
European Medicines Agency Approval [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Contingent milestone payments | 5,000 | ||
FDA Approval [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Contingent milestone payments | 15,000 | ||
Japanese Pharmaceuticals and Medical Devices Agency Approval [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Contingent milestone payments | $ 1,500 |
Fair Value Measurements - Sum43
Fair Value Measurements - Summary of Changes in Fair Value of Company's Level 3 Financial Instrument (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Warrant Liability [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 303 | $ 274 |
Liability issuance | 259 | |
Reclassification of warrant liability to common equity | (370) | |
Change in fair value | 67 | (230) |
Ending balance | 303 | |
Put Option on 2016 Note and 2017 Note [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 979 | |
Liability issuance | 828 | 977 |
Conversion of 2016 and 2017 Notes | (1,976) | |
Change in fair value | 169 | 2 |
Ending balance | 979 | |
Contingent Consideration [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 9,708 | |
Contingent consideration | 9,524 | |
Change in fair value | 1,977 | 184 |
Ending balance | $ 11,685 | $ 9,708 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jun. 07, 2017 | Jun. 30, 2017 | Apr. 28, 2017 | Dec. 31, 2016 |
Class of Warrant or Right [Line Items] | ||||
Common stock, shares issued | 9,034,210 | |||
Net proceeds from sale of shares | $ 100 | |||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Common stock, shares sold | 23,550 | |||
Common and preferred stock, shares authorized | 501,000,000 | |||
Common stock, shares authorized | 500,000,000 | 27,000,000 | ||
Preferred stock, shares authorized | 1,000,000 | |||
Preferred stock, par value | $ 0.001 | |||
Redeemable convertible preferred stock, shares issued | 11,927,875 | |||
Redeemable convertible preferred stock, shares outstanding | 0 | 11,927,875 | ||
Preferred stock converted to warrants to purchase shares of company's common stock | 3,040,184 | 14,158,371 | ||
Series A Reedemable Convertible Preferred Stock [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Redeemable convertible preferred stock, shares issued | 0 | 1,799,906 | ||
Redeemable convertible preferred stock, shares outstanding | 0 | 1,799,906 | ||
Series B Reedemable Convertible Preferred Stock [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Redeemable convertible preferred stock, shares issued | 0 | 5,675,387 | ||
Redeemable convertible preferred stock, shares outstanding | 0 | 5,675,387 | ||
Series C Reedemable Convertible Preferred Stock [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Redeemable convertible preferred stock, shares issued | 0 | 4,452,582 | ||
Redeemable convertible preferred stock, shares outstanding | 0 | 4,452,582 | ||
Redeemable Convertible Preferred Stock [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Preferred stock conversion description | The previously outstanding shares of Series A and Series B preferred stock were converted on a one-to-one basis into shares of common stock and then subject to the Exchange Ratio. | |||
Convertible preferred stock conversion ratio | 101.706% | |||
Series B Preferred Stock Warrants [Member] | Warrant [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issuance of common stock upon exercise of warrants,Shares | 111,799 | |||
Proceeds from the cash exercises | $ 400 | |||
Series C Preferred Stock [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Preferred stock converted to warrants to purchase shares of company's common stock | 74,992 | 4,452,582 | ||
Series C Preferred Stock and Series C Warrants [Member] | 2016 Notes and 2017 Notes [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Debt instrument, beneficial conversion feature | $ 400 | |||
H.C. Wainwright & Co., LLC [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Common stock, par value | $ 0.001 | |||
Sales commissions in fixed percentage of gross proceeds per share | 3.00% | |||
Common stock, shares sold | 23,550 | |||
Net proceeds from sale of shares | $ 100 | |||
H.C. Wainwright & Co., LLC [Member] | Maximum [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Amount available to sell under equity program | $ 18,000 | |||
Canaccord Genuity [Member] | Advisory Agreement [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Payment of success fee | 500 | |||
Success fee remaining amount recorded as liability | $ 500 | |||
Public Offering [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Common stock, shares issued | 9,034,210 | |||
Net proceeds from sale of shares | $ 39,500 | |||
Public Offering [Member] | Underwriters [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Common stock, shares issued | 613,157 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Company's Common Stock (Detail) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Common stock authorized | 500,000,000 | 27,000,000 |
Common stock outstanding | 24,203,464 | 3,162,573 |
Shareholders' Equity - Company'
Shareholders' Equity - Company's Shares of Common Stock Reserved for Issuance (Detail) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 3,040,184 | 14,158,371 |
Series A Preferred Stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 1,799,906 | |
Series B Preferred Stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 5,675,387 | |
Series C Preferred Stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 74,992 | 4,452,582 |
Series B Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 289,966 | |
Series C Warrant Liability [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 125,885 | |
Warrants from Mast acquired in Merger [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 1,152,231 | |
Warrants Converted Pursuant to Merger [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 74,992 | |
April 2017 SVB Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 24,725 | |
June 2017 SVB Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 41,736 | |
Stock Options Outstanding [Member] | ||
Class of Warrant or Right [Line Items] | ||
Total shares reserved | 1,746,500 | 1,814,645 |
Shareholders' Equity - Summar47
Shareholders' Equity - Summary of Outstanding Warrants for Company's Common Stock (Detail) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 1,293,684 |
Exercise Price One [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 401,391 |
Exercise Price | $ / shares | $ 45.50 |
Expiration Date | 2018-06 |
Exercise Price Two [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 314,446 |
Exercise Price | $ / shares | $ 52.50 |
Expiration Date | 2019-11 |
Exercise Price Three [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 32,467 |
Exercise Price | $ / shares | $ 7 |
Expiration Date | 2020-08 |
Exercise Price Four [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 403,927 |
Exercise Price | $ / shares | $ 29.40 |
Expiration Date | 2021-02 |
Exercise Price Five [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 74,992 |
Exercise Price | $ / shares | $ 8.98 |
Expiration Date | 2021-06 |
Exercise Price Six [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 24,725 |
Exercise Price | $ / shares | $ 9.10 |
Expiration Date | 2027-04 |
Exercise Price Seven [Member] | |
Class of Warrant or Right [Line Items] | |
Shares Underlying Outstanding Warrants | 41,736 |
Exercise Price | $ / shares | $ 5.39 |
Expiration Date | 2027-06 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) $ in Thousands, ¥ in Millions | Mar. 23, 2017USD ($)ft² | Jun. 30, 2017 | Jun. 29, 2017USD ($) | Jun. 29, 2017JPY (¥) |
Commitments And Contingencies Disclosure [Abstract] | ||||
Lease office space | ft² | 13,707 | |||
Lease commencement date | Jul. 1, 2017 | |||
Lease expiration date | May 31, 2020 | |||
Lease agreement date | Jun. 19, 2014 | |||
Monthly base rent | $ | $ 44 | |||
Percentage of lease increase | 3.00% | |||
Potential amount of future obligation if Serendex failed to pay outstanding payment for services | $ 500 | ¥ 53 | ||
Employment agreement description | Upon termination without cause, and not as a result of death or disability, each of such officers is entitled to receive a payment of base salary for three to twelve months following termination of employment and such officer will be entitled to continue to receive coverage under medical and dental benefit plans for three to twelve months or until such officer is covered under a separate plan from another employer. Upon a termination other than for cause or for good reason within twelve months following a change in control, each of such officers will be entitled to the same benefits as upon termination without cause and will also be entitled to certain acceleration of such officer's outstanding unvested options at the time of such termination |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - shares | Jun. 07, 2017 | Jun. 30, 2017 |
Related Party Transaction [Line Items] | ||
Issuance of common stock upon public offering, net closing costs, shares | 9,034,210 | |
Public Offering [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of common stock upon public offering, net closing costs, shares | 9,034,210 | |
Public Offering [Member] | Zambon SpA [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of common stock upon public offering, net closing costs, shares | 4,693,540 | |
Common stock holding percentage | 19.40% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | May 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Additional share based compensation expense | $ 0.1 | ||
Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Requisite service period | 4 years | ||
Number of shares outstanding | 0 | 0 | |
Share-based award accelerated vesting number of shares | 18,246 | ||
Stock Options [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Dividend yield | 0.00% | ||
Share-based award accelerated vesting number of shares | 67,755 | ||
2008 Stock Option Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting interval period | quarterly | ||
Vesting expiration period | 10 years | ||
Issuance of stock based awards | 0 | ||
2008 Stock Option Plan [Member] | Restricted Stock [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting interval period | quarterly | ||
Vesting period | 4 years | ||
Vesting expiration period | 10 years | ||
Shares issued excluding forfeited shares | 562,596 | ||
2008 Stock Option Plan [Member] | Tranche One [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
2008 Stock Option Plan [Member] | Tranche Two [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
2015 Omnibus Incentive Option Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock available for grant | 523,321 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-based Awards After Effect of Reverse Stock Split and Exchange Ratio (Detail) - 2008 Plan and 2015 Plan [Member] - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock Options, Outstanding at beginning balance | 2,129,856 | 1,079,674 |
Stock Options, Granted | 7,500 | 137,838 |
Stock Options, Exercised | (4,822) | (823) |
Stock Options, Forfeited | (386,034) | (642) |
Stock Options, Outstanding at ending balance | 1,746,500 | 1,216,047 |
RSUs, Granted | 72,588 | |
RSUs, Exercised | (72,361) | |
RSUs, Forfeited | (227) | |
Total, Outstanding at beginning balance | 2,129,856 | 1,079,674 |
Total, Granted | 80,088 | 137,838 |
Total, Exercised | (77,183) | (823) |
Total, Forfeited | (386,261) | (642) |
Total, Outstanding at ending balance | 1,746,500 | 1,216,047 |
Stock-Based Compensation - Esti
Stock-Based Compensation - Estimated Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 155 | $ 51 | $ 236 | $ 112 |
Research and Development [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 38 | 22 | 74 | 45 |
General and Administrative [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 117 | $ 29 | $ 162 | $ 67 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Potentially Dilutive Securities (Detail) - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 3,080,788 | 8,564,721 |
Series A Contingent Redeemable Preferred Stock [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 1,054,744 | |
Series B Contingent Redeemable Preferred Stock [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 3,325,776 | |
Series C Contingent Redeemable Preferred Stock [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 2,653,726 | |
Warrants to Purchase Series B Contingent Redeemable Preferred Stock [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 169,816 | |
Warrants to Purchase Common Stock [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 1,293,684 | |
Awards under Equity Incentive Plan [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 1,746,500 | 1,216,047 |
Restricted Stock [Member] | ||
Earnings Per Share Basic [Line Items] | ||
Potentially dilutive securities | 40,604 | 144,612 |
Net Loss Per Share - Reconciles
Net Loss Per Share - Reconciles Basic Earnings Per Share and Diluted Earnings Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (11,504) | $ (2,051) | $ (16,477) | $ (3,728) |
Accretion of convertible redeemable preferred stock | (554) | (2) | (578) | (26) |
Deemed dividend on beneficial conversion feature | (404) | (404) | ||
Net loss attributable to common stockholders | $ (12,462) | $ (2,053) | $ (17,459) | $ (3,754) |
Weighted average common shares outstanding, basic and diluted | 13,807,861 | 1,043,984 | 8,465,053 | 1,034,553 |
Basic and diluted EPS | $ (0.90) | $ (1.97) | $ (2.06) | $ (3.63) |