Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 10, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MTEM | |
Entity Registrant Name | Molecular Templates, Inc. | |
Entity Central Index Key | 1,183,765 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 27,060,603 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 49,275 | $ 58,910 |
Prepaid expenses | 1,477 | 1,485 |
Accounts receivable from related party | 4,000 | 0 |
Other current assets | 144 | 19 |
Total current assets | 54,896 | 60,414 |
Property and equipment, net | 4,294 | 1,952 |
In-process research and development | 26,623 | 26,623 |
Other assets | 1,402 | 1,402 |
Total assets | 87,215 | 90,391 |
Current liabilities: | ||
Accounts payable | 2,859 | 2,517 |
Accrued liabilities | 2,800 | 2,690 |
Current portion of long-term debt | 0 | 2,400 |
Deferred revenue | 6,350 | 2,765 |
Other current liabilities | 98 | 70 |
Total current liabilities | 12,107 | 10,442 |
Warrant liabilities | 340 | 954 |
Long-term debt, net | 2,999 | 1,078 |
Other liabilities | 828 | 628 |
Total liabilities | 16,274 | 13,102 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity | ||
Common stock, $0.001 par value, shares authorized: 150,000,000 shares; issued and outstanding: 27,060,035 shares at March 31, 2018 and 26,898,330 shares at December 31, 2017 | 27 | 27 |
Additional paid-in capital | 144,044 | 141,733 |
Accumulated other comprehensive loss | 0 | 0 |
Accumulated deficit | (73,130) | (64,471) |
Total stockholders’ equity | 70,941 | 77,289 |
Total liabilities and stockholders’ equity | $ 87,215 | $ 90,391 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 27,060,035 | 26,898,330 |
Common stock, shares outstanding | 27,060,035 | 26,898,330 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Research and development revenue | $ 231 | $ 1,760 |
Grant revenue | 251 | 125 |
Total revenue | 482 | 1,885 |
Operating expenses: | ||
Research and development | 6,687 | 1,067 |
General and administrative | 2,910 | 1,791 |
Total operating expenses | 9,597 | 2,858 |
Loss from operations | 9,115 | 973 |
Interest and other income, net | 82 | 0 |
Interest expense | (295) | (223) |
Change in fair value of warrant liabilities | 614 | 1 |
Net loss | 8,714 | 1,195 |
Deemed dividends on preferred stock | 0 | 427 |
Net loss attributable to common shareholders | $ 8,714 | $ 1,622 |
Net loss per share attributable to common shareholders: | ||
Basic and diluted | $ 0.32 | $ 7.56 |
Weighted average number of shares used in net loss per share calculations: | ||
Basic and diluted | 26,989,693 | 214,641 |
Other comprehensive loss: | ||
Unrealized gain (loss) on available-for-sale securities | $ 0 | $ 0 |
Comprehensive loss | $ 8,714 | $ 1,622 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ 8,714,000 | $ 1,195,000 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 72,000 | 18,000 |
Stock-based compensation expense | 643,000 | 26,000 |
Amortization of debt discount and accretion related to long-term liabilities | 63,000 | 38,000 |
Change in common stock warrant fair value | (615,000) | 2,000 |
Accretion of asset retirement obligations | 8,000 | 0 |
Loss on extinguishment of debt | 115,000 | 0 |
Loss on disposal of equipment | 2,000 | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (58,000) | 8,000 |
Accounts receivable from related party | (4,000,000) | (750,000) |
Other current assets | (71,000) | 0 |
Accounts payable | (355,000) | (139,000) |
Accrued liabilities | 110,000 | 473,000 |
Other current liabilities | 34,000 | 0 |
Other liabilities | 198,000 | 0 |
Deferred revenue | 3,585,000 | (1,135,000) |
Net cash used in operating activities | (8,983,000) | (2,654,000) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,719,000) | (8,000) |
Increase in other assets | 0 | (188,000) |
Net cash used in investing activities | (1,719,000) | (196,000) |
Cash flows from financing activities: | ||
Payments of capital lease obligations | (13,000) | (11,000) |
Proceeds from issuance of long-term debt and warrants, net | 4,537,000 | 0 |
Repayment of long-term debt | (3,605,000) | (600,000) |
Proceeds from issuance of related party debt | 0 | 2,685,000 |
Proceeds from stock option exercise | 148,000 | 0 |
Proceeds from promissory note | 0 | 2,000,000 |
Net cash provided by financing activities | 1,067,000 | 4,074,000 |
Net increase (decrease) in cash and cash equivalents | (9,635,000) | 1,224,000 |
Cash and cash equivalents, beginning of period | 58,910,000 | 1,716,000 |
Cash and cash equivalents, end of period | 49,275,000 | 2,940,000 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 51,000 | 68,000 |
Non-Cash Investing and Financing Activities | ||
Deemed dividends on preferred stock | $ 0 | $ 428,000 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business Molecular Templates, Inc. (the “Company” or “Molecular”), is a clinical stage biopharmaceutical company formed in 2001, with a biologic therapeutic platform for the development of novel targeted therapeutics for cancer and other diseases, headquartered in Austin, Texas. The Company’s focus is on the research and development of therapeutic compounds for a variety of cancers. Molecular operates its business as a single segment, as defined by U.S. generally accepted accounting principles (“U.S. GAAP”). On August 1, 2017, the Company, formerly known as Threshold Pharmaceuticals, Inc. (Nasdaq: THLD) (“Threshold”), completed its business combination with the entity then known as Molecular Templates, Inc., a private Delaware Corporation (“Private Molecular”), in accordance with the terms of an Agreement and Plan of Merger and Reorganization, (the “Merger Agreement”) Basis of Presentation These unaudited interim condensed consolidated financial statements reflect the historical results of Private Molecular prior to the completion of the Merger, and do not include the historical results of the Company prior to the completion of the Merger. All share and per share disclosures have been adjusted to reflect the exchange of shares in the Merger, and the 11-for-1 reverse stock split of the common stock effected on August 1, 2017. Under U.S. GAAP, the Merger is treated as a “reverse merger” under the purchase method of accounting. For accounting purposes, Private Molecular is considered to have acquired Threshold. See Note 3, “Merger with Private Molecular”, for further details on the Merger and the U.S. GAAP accounting treatment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP pursuant to the requirements of the Securities and Exchange Commission (“SEC”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for the fair presentation of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the recorded amounts reported therein. A change in facts or circumstances surrounding the estimate could result in a change to estimates and impact future operating results. The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2018. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, and reflect the elimination of intercompany accounts and transactions. Reclassifications Certain amounts in prior year’s presentations have been reclassified to conform to the current presentation. These classifications had no effect on previously reported net loss. Significant Accounting Policies Except as detailed below, there have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2018, as compared to the significant accounting policies disclosed in Note 1, Summary of significant accounting policies, to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Revenue Recognition Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board’s (“FASB”) provisions of ASC 606, Revenue from Contracts with Customers Revenue Recognition Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) The Company identifies the goods or services promised within each collaboration agreement and assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. In assessing whether a promised good or service is distinct, the Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. If a promised good or service is not distinct, an entity is required to combine that promised good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct. The allocation of the transaction price to the performance obligations in proportion to their standalone selling prices is determined at contract inception. If the consideration promised in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer. The Company determines the amount of variable consideration by using the expected value method or the most likely amount method. The Company includes the unconstrained amount of estimated variable consideration in the transaction price. The amount included in the transaction price is the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. In determining the transaction price, the Company adjusts consideration for the effects of the time value of money if there is a significant benefit of financing. The Company assessed its collaboration agreements and concluded that no significant financing components were present. If an arrangement contains customer options that allow the customer to acquire additional goods or services, including an exclusive license to the Company’s intellectual property, the goods and services underlying the customer options are evaluated to determine whether they are deemed to represent a material right. In determining whether the customer option has a material right, the Company assesses whether there is an option to acquire additional goods or services at a discount. If the customer option is determined not to represent a material right, the option is not considered to be performance obligations at the outset of the arrangement. If the customer option is determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied over time, based on the use of an input method. Performance obligations may include research and development services to be performed by the Company on behalf of the collaboration partner. Revenue is recognized on research and development efforts as the services are performed and presented on a gross basis, since the Company is the principal. Refer to Note 4 ,” Research and Development Agreements” Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash and cash equivalents, investments, long term debt and accounts receivable. The Company’s cash, cash equivalents are with two major financial institutions in the United States. The Company performs an ongoing credit evaluation of its strategic partners’ financial conditions and generally does not require collateral to secure accounts receivable from its strategic partners. The Company’s exposure to credit risk associated with non-payment will be affected principally by conditions or occurrences within Takeda Pharmaceutical Company Ltd. (“Takeda”). Approximately 34% of total revenues for the three months ended March 31, 2018, were derived from Takeda. There was $4.0 million in accounts receivable due from Takeda at March 31, 2018 that was received in April 2018. See also Note 4, “Research and Development Agreements”, regarding the collaboration agreements with Takeda. Drug candidates developed by the Company may require approvals or clearances from the U.S. Food and Drug Administration (“FDA”) or international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s drug candidates will receive any of the required approvals or clearances. If the Company were to be denied approval or clearance or any such approval or clearance were to be delayed, it would have a material adverse impact on the Company. Recently Issued Accounting Pronouncements Effective January 1, 2018, the Company adopted ASC 606, which provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 on a modified retrospective basis through a cumulative adjustment to equity. The impact of the adoption of the standard to prior period amounts is discussed below in Note 4, “ Research and Development Agreements” In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires management to record right-to-use asset and lease liability on the statement of financial position for operating leases. ASU 2016-02 is effective for annual and interim reporting periods beginning on or after December 15, 2018 and the modified retrospective approach is required. The Company is in the process of evaluating the impact the adoption of this standard would have on its consolidated financial statements and disclosures and expects the new standard to significantly increase the reported assets and liabilities on its consolidated balance sheets. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting” to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this new guidance, modification accounting is required if the fair value, vesting conditions, or classification of the award changes as a result of the change in terms or conditions. ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within each annual reporting period. The Company adopted the standard in the first quarter of 2018 and it did not have a material impact to its consolidated financial statements. In December 2017, the SEC issued Staff Accounting Bulletin ("SAB") 118 to address the application of GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act, or the Tax Act, which was signed into law on December 22, 2017. In March 2018, the FASB issued ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)," which amended ASC 740 to incorporate the requirements of SAB 118. There were no changes in the provisional amounts recorded by the Company at December 31, 2017 related to the Tax Act. The Company continues to evaluate the impact of the Tax Act. |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | NOTE 2 — NET LOSS PER COMMON SHARE Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by giving effect to all potential dilutive common shares, including outstanding options and warrants. The following is the calculation of basic and diluted net loss per share (in thousands, except share and per share data Three Months Ended March 31, 2018 2017 Numerator: Net loss attributable to common shareholders $ 8,714 $ 1,622 Denominator: Weighted average common shares outstanding - basic and diluted 26,989,693 214,641 Net loss per share: Basic and diluted $ 0.32 $ 7.56 The following outstanding warrants and options were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an antidilutive effect (in thousands): Three Months Ended March 31, 2018 2017 Shares issuable upon exercise of warrants 3,522 35 Shares issuable upon exercise of stock options 2,880 458 |
Merger with Private Molecular
Merger with Private Molecular | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Merger with Private Molecular | NOTE 3 — MERGER WITH PRIVATE MOLECULAR On August 1, 2017, the Company, formerly known as Threshold, completed the Merger with Private Molecular, in accordance with the terms of the Merger Agreement Also on August 1, 2017, in connection with, and prior to the completion of, the Merger, Threshold effected a All Private Molecular stock options granted under the Private Molecular stock option plan (whether or not then exercisable) outstanding prior to the effective time of the Merger were exchanged for options to purchase the Company’s common stock. All outstanding and unexercised Private Molecular stock options assumed by the Company may be exercised solely for shares of the Company’s common stock. The number of shares of the Company’s common stock subject to each Private Molecular stock option assumed by the Company was determined by multiplying (a) the number of shares of Private Molecular common stock that were subject to such Private Molecular stock option, as in effect immediately prior to the effective time of the merger by (b) the Exchange Ratio and dividing by 11 (to account for the Reverse Stock Split); rounding the resulting number down to the nearest whole number of shares of the Company’s common stock. The per share exercise price for the Company’s common stock issuable upon exercise of each Private Molecular stock option assumed by the Company is determined by dividing (a) the per share exercise price of Private Molecular common stock subject to such Private Molecular stock option, as in effect immediately prior to the effective time of the merger, by (b) the Exchange Ratio, and multiplying by 11 (to account for the Reverse Stock Split); rounding the resulting exercise price up to the nearest whole cent. The exchange of the Private Molecular stock options for the Company’s stock options was treated as a modification of the awards. Threshold equity awards issued and outstanding at the time of the Merger will remain issued and outstanding. However, for accounting purposes, Threshold equity awards will be assumed to have been exchanged for equity awards of Private Molecular, the accounting acquirer. As of August 1, 2017, Threshold had outstanding stock options to purchase 963,681 shares of common stock, of which stock options to purchase 963,681 shares were vested and exercisable at a weighted average exercise price of $33.62 per share, after giving effect to the Reverse Stock Split. Allocation of Purchase Consideration 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 purchase price for Threshold on August 1, 2017, the closing date of the Merger, was as follows (in thousands, except per share amounts): August 1, 2017 Number of share of the combined company owned by Threshold stockholders 6,508 (1) Multiplied by the price per share of Threshold common stock $ 5.94 (2) Purchase price before options $ 38,658 Threshold options assumed 1,006 (3) Settlement of preexisting bridge note with Threshold (4,010 ) (4) Total purchase price $ 35,654 1. Represents the number of shares of common stock of the combined company that Threshold stockholders owned as of the closing of the Merger pursuant to the Merger Agreement. This amount is calculated as 6,508,356 shares of Threshold common stock outstanding as of August 1, 2017, adjusted for the 11-for-1 reverse stock split. 2. The fair value of Threshold common stock used in determining the purchase price was $5.94, which was derived from the $0.54 per share closing price of Threshold on August 1, 2017, the current price at the time of closing, adjusted for the 11-for-1 reverse stock split. 3. Because the Company is considered to be the acquirer for accounting purposes, the pre-Merger vested stock options granted by Threshold under the 2014 Equity Incentive Plan are deemed to have been exchanged for equity awards of the Company and as such the portion of the acquisition date fair value of these equity awards attributable to pre-Merger service to Threshold were accounted for as a component of the consideration transferred. 4. Represents the bridge loan as of the closing date of the Merger. As the receivable on Threshold’s balance sheet was settled as part of the merger, it is deemed to be a reduction in the purchase price. Under the acquisition method of accounting, the total purchase price was allocated to tangible and identifiable intangible assets acquired and liabilities assumed of Threshold on the basis of their estimated fair values as of the transaction closing date on August 1, 2017. The following table summarizes the allocation of the purchase consideration to the assets acquired and liabilities assumed based on their fair values as of August 1, 2017 (in thousands): August 1, 2017 Cash and cash equivalents $ 11,216 Prepaid expenses and other current assets 945 In-process research and development (IPR&D) 26,623 Accounts payable, accrued expenses (2,009 ) Warrant liability (1,121 ) Net assets acquired $ 35,654 The Company believes that the historical values of Threshold’s current assets and current liabilities approximate fair value based on the short-term nature of such items. The allocation of the purchase price is dependent on the valuation of the fair value of assets acquired and liabilities assumed. The Company does not expect any further revisions to the allocation of the purchase price. In Process Research and Development The Company used the risk adjusted discounted cash flow method 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, evofosfamide, was determined using a discount rate of 12%, and identified projected cash flows from evofosfamide were risk adjusted to take into consideration the probabilities of moving through the various clinical stages. Goodwill 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 Transaction costs associated with the Merger of approximately $2.0 million are included in general and administrative expense. Threshold Promissory Note On March 24, 2017, the Company received $2.0 million from Threshold in the form of a promissory note at an interest rate of 1% per annum. The Company received an additional $2.0 million on June 1, 2017. The note was settled as part of the Merger. Share Based Awards The exchange of Private Molecular stock options to purchase Threshold common stock, as renamed Molecular, was accounted for as a modification of the awards because the legal exchange of the awards is considered a modification of Private Molecular stock options. The modification of the stock options did not result in any incremental compensation expense as the modification did not increase the fair value of the stock options. Additionally, pursuant to the terms of the Merger Agreement, participants in the 2014 Equity Incentive Plan received accelerated vesting for all or a portion of their pre-merger awards as well as a modification of the exercise period. The Company recorded $1.2 million in stock compensation associated with the transaction. See Note 11, “Stock Based Compensation”, for further details about stock based compensation recorded. |
Research and Development Agreem
Research and Development Agreements | 3 Months Ended |
Mar. 31, 2018 | |
Research And Development [Abstract] | |
Research and Development Agreements | NOTE 4 — RESEARCH AND DEVELOPMENT AGREEMENTS Disaggregated Research and Development Revenue Research and Development revenues disaggregated by location were as follows (in thousands): March 31, 2018 March 31, 2017 Japan $ 163 $ 1,260 United States 68 500 Total Research and Development Revenue $ 231 $ 1,760 (1) Collaboration revenue is attributable to regions based on the location of our collaboration partner's parent company headquarters. Impact of Adoption of ASC 606 Effective January 1, 2018, the Company adopted ASC 606, which provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 on a modified retrospective basis through a cumulative adjustment to stockholders’ equity. The cumulative effect of applying the new guidance of ASC 606 to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the Condensed Consolidated Balance Sheet as of January 1, 2018 (in thousands): Balance Sheet December 31, 2017 Effect of adoption of ASC 606 (1) January 1, 2018 Assets Other current assets $ 19 $ 54 $ 73 Total assets 90,391 54 90,445 Stockholder's equity Accumulated deficit (64,471 ) 54 (64,417 ) Total liabilities and stockholder's equity $ 90,391 $ 54 $ 90,445 (1) This impact represents the amount of revenue that would have been recognized and accounted for as unbilled revenue, during the year ended December 31, 2017. The impact of adoption on the Company’s Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2018 was as follows (in thousands): Balance without As reported Effect of adoption of adoption of ASC 606 Statement of operations and comprehensive loss March 31, 2018 ASC 606 (1) March 31, 2018 Research and development revenue $ 231 $ (68 ) $ 163 Total revenue 482 (68 ) 414 Net loss $ 8,714 $ 68 $ 8,782 Net loss per share $ 0.32 $ 0.01 $ 0.33 (1) The adoption of ASC 606 resulted in additional revenues recognized in the first quarter of 2018. This impact represents the amount of aggregate revenue that would not have been recognized during the quarter ended March 31, 2018 under Previous Guidance. The impact of adoption on the Company’s Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2018 was as follows (in thousands): Balance without As reported Effect of adoption of adoption of ASC 606 Statement of cash flows March 31, 2018 ASC 606 (1) March 31, 2018 Net loss $ 8,714 $ 68 $ 8,782 Changes in operating assets and liabilities: Other current assets (71 ) (68 ) (3 ) Net cash used in operating activities $ (8,983 ) $ — $ (8,983 ) (1) The adoption of ASC 606 resulted in a decrease of net loss and an increase in unbilled revenue that is included in other current assets. Contract Assets and Liabilities Changes in our contract assets and liabilities under Topic 606 were as follows (in thousands): March 31, 2018 December 31, 2017 (1) Contract Assets Unbilled revenue $ 54 $ — Contract Liabilities Deferred revenue $ 4,929 $ 1,092 (1) December 31, 2017 balances prior to the impact related to the modified retrospective adoption of ASC 606. During the three months ended March 31, 2018, the Company recorded $163,000 in research and development revenue that was previously included in deferred revenue at December 31, 2017. The performance obligations are expected to be fulfilled, and revenue fully recognized through June 30, 2019. The aggregate amount of the contract price of the Company’s collaborative agreements, allocated to performance obligations not yet satisfied is $5.1 million. Related Party Collaboration Agreement - Takeda Pharmaceuticals, Inc. Takeda Collaboration Agreement In October 2016, Private Molecular entered into a collaboration and option agreement (the “Takeda Collaboration Agreement”) with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda, to discover and develop CD38-targeting engineered toxin bodies (“ETBs”), which includes MT-4019 for evaluation by Takeda. Under the terms of the Takeda Collaboration Agreement, Molecular is responsible for providing to Takeda (i) new ETBs generated using Takeda’s proprietary fully human antibodies targeting CD38 and (ii) MT-4019 for in vitro and in vivo pharmacological and anti-tumor efficacy evaluations. Molecular granted Takeda (1) a background IP license during the term of the Takeda Collaboration Agreement, and (2) an exclusive option during the term of the Takeda Collaboration Agreement and for a period of thirty days thereafter, to negotiate and obtain an exclusive worldwide license to develop and commercialize any ETB that may result from this collaboration, including MT-4019. Molecular has received payments of $2.0 million in technology access fees and cost reimbursement associated with the Company’s performance obligations under the agreement. The Company determined that the promised goods and services under the Takeda Collaboration Agreement were the background IP license, as well as the research and development services. The Company determined that there was one performance obligation, since the background IP and manufacturing were not distinct from the research and development services. Revenues are recognized over the period that the research and development services occur. The Company also concluded that, since the option for the exclusive license is deemed to be at fair value that the option does not provide the customer with a material right, and should be accounted for if and when the option is exercised. During the three months ended March 31, 2018 and 2017, the Company recorded research and development revenue from Takeda of $11,000 and $1.3 million, respectively, under the Takeda Collaboration Agreement. This revenue is deemed to be revenue from a related party. Takeda Multi-Target Agreement In June 2017, Molecular entered into a Multi-Target Collaboration and License Agreement with Takeda (“Takeda Multi-Target Agreement”) in which Molecular will collaborate with Takeda to identify and generate ETBs, against two targets designated by Takeda. Takeda designated certain targets of interest as the focus of the research. Each party grants to the other nonexclusive rights in its intellectual property for purposes of the conduct of the research, and Molecular agrees to work exclusively with Takeda with respect to the designated targets. Under the Takeda Multi-Target Agreement, Takeda has an option during an option period to obtain an exclusive license under Molecular’s intellectual property to develop, manufacture, commercialize and otherwise exploit ETBs against the designated targets. The option period for each target ends three months after the completion of the evaluation of such designated target. Under the Takeda Multi-Target Agreement, both parties have the right to cancel the agreement, with a specified notice period. Molecular received an upfront fee of $1.0 million and was entitled to receive an additional $2.0 million with the designation of each of the two targets. These two targets were designated in December 2017, and as of March 31, 2018, Molecular had a receivable of $4.0 million from Takeda. Molecular may also receive an additional $25.0 million, in aggregate through the exercise of the option to license ETBs. Additionally, Molecular is entitled to receive up to approximately $547.0 million in additional milestone payments through preclinical and clinical development and commercialization. Molecular is also entitled to tiered royalty payments of a mid-single to low-double digit percentage of net sales of any licensed ETBs, subject to certain reductions. Finally, Molecular is entitled to receive up to $10.0 million in certain contingency fees. The Takeda Multi-Target Agreement will expire on the expiration of the option period (within three months after the completion of the evaluation of each designated target) for the designated targets if Takeda does not exercise its options, or, following exercise of the option, on the later of the expiration of patent rights claiming the licensed ETB or ten years from first commercial sale of a licensed ETB. The Takeda Multi-Target Agreement may be sooner terminated by Takeda for convenience or upon a Molecular change of control, or by either party for an uncured material breach of the agreement. The Company evaluated the contract termination clause and concluded that it was a non-substantive termination provision. As such, an initial contract term was defined as the length of the termination notice period, with a deemed renewal option to continue the research and development services over the remainder of the contract term as a material right. The Company determined that the promised goods and services under the Takeda Multi-Target Agreement were the background IP license, the research and development services, and manufacturing during the initial contract period; and a renewal option to continue the research and development services. The Company determined that there were two performance obligation; research and development services, and the renewal options. Since the background IP and manufacturing were not distinct from the research and development services, they were deemed to be one performance obligation. Transaction consideration was allocated to each of the performance obligation using an estimate of the standalone selling price, and revenues are recognized over the period that the research and development services occur. The Company also concluded that, since the option for the exclusive license is deemed to be at fair value that the option does not provide the customer with a material right, and should be accounted for if and when the option is exercised. In connection with the execution of the Takeda Multi-Target Agreement. Takeda also entered into a stock purchase agreement with the Company (“Takeda Stock Purchase Agreement”), pursuant to which Takeda purchased approximately $20.0 million of shares of the Company’s common stock following the reverse-merger in the third quarter of 2017. See Note 10, “Stockholders’ Equity” for further details. Since the Takeda Stock Purchase Agreement was dependent on contingent events, the Company determined that the transaction was constraint, and not a performance obligation under the Takeda Multi-Target Agreement. The Company accounted for the stock purchase agreement in August 2017, once the constraints were removed, and recorded the $20.0 million in equity upon the settlement of the stock purchase transaction. During the three months ended March 31, 2018, the Company recorded $152,000 research and development revenue under the Multi-Target Takeda Agreement. During the three months ended March 31, 2017, the Company recorded no research and development revenue under the Multi-Target Takeda Agreement, since the agreement had not been entered into. Other Collaboration Agreements In September 2016, Private Molecular entered into a collaboration agreement with an undisclosed pharmaceutical company (“Other Collaboration Agreement”) to generate ETBs, for evaluation for consideration of $500,000. Under the terms of the Other Collaboration Agreement, Molecular was responsible for providing to the customer (i) new ETBs generated using the customer’s materials and (ii) ETB study molecules for testing and evaluation. The customer also received an option under the Other Collaboration Agreement for the manufacture of additional quantities of ETB molecules, for additional consideration of $250,000, upon delivery and acceptance of the additional materials. The Company determined that at the inception of the agreement, the promised goods and services under the Other Collaboration Agreement were, the research and development services, and manufacturing. The Company determined that there was one performance obligation, since the manufacturing was not distinct from the research and development services. Revenues are recognized over the period that the research and development services occur using an input method to measure progress towards satisfaction of the performance obligation. The option for additional ETB molecules was determined to be at fair value and was accounted for once the option was exercised. The option for additional materials was exercised in November 2017, and revenues are recognized over the period that the research and development services occur. During the three months ended March 31, 2018 and 2017, the Company recorded $68,000 and $500,000 in research and development revenue under the Other Collaboration Agreement, respectively. Grant Agreements The Company receives funds from a state grant funding program, which is a conditional cost reimbursement grant and revenue is recognized as allowable costs are paid. In November 2011, Private Molecular was awarded a $10.6 million product development grant from the Cancer Prevention Research Institute of Texas (“CPRIT”) for its CD20-targeting ETB MT-3724. To date, Molecular has received $9.5 million in grant funds. The Company recognized $251,000 and $125,000 in grant revenue under these awards during the three months ended March 31, 2018 and 2017, respectively. Amounts collected in excess of revenue recognized are recorded as deferred revenue. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 — RELATED PARTY TRANSACTIONS Takeda Collaboration and Stock Purchase In connection with the Takeda Stock Purchase Agreement described in Note 4, “Research and Development Agreements”, Takeda became a related party, following the stock purchase. Refer to Note 4, “Research and Development Agreements” for more details about the Takeda Collaboration Agreement and the Takeda Multi-Target Agreement. Refer to Note 10, “Stockholders’ Equity”, for more detail about the Takeda Stock Purchase Agreement. Concurrent Financing Following the Concurrent Financing described in Note 10, “Stockholders’ Equity” below, Longitude Venture Partner III, L.P. (“Longitude”) and CDK Associates, L.L.C. (“CDK”) became related parties, with Longitude and CDK beneficially owning 15.3% and 4.99% of the Company, respectively, following investments of $20.0 million and $7.0 million, respectively. The |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Marketable Securities and Fair Value | NOTE 6 —MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS The Company accounts for its marketable securities in accordance with ASC 820 “Fair Value Measurements and Disclosures.” Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. For Level 2 securities that have market prices from multiples sources, a “consensus price” or a weighted average price for each of these securities can be derived from a distribution-curve-based algorithm which includes market prices obtained from a variety of industrial standard data providers (e.g. Bloomberg), security master files from large financial institutions, and other third-party sources. Level 2 securities with short maturities and infrequent secondary market trades are typically priced using mathematical calculations adjusted for observable inputs when available. The following table sets forth the Company’s financial assets (cash equivalents and marketable securities) at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands): Basis of Fair Value Measurements Fair Value as of March 31, 2018 Level 1 Level 2 Level 3 Money market funds $ 48,830 $ 48,830 $ — $ — Basis of Fair Value Measurements Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Money market funds $ 51,751 $ 51,751 $ — $ — The Company invests in highly-liquid, investment-grade securities. The following is a summary of the Company’s available-for-sale securities at March 31, 2018 and December 31, 2017 (in thousands): As of March 31, 2018 Cost Basis Unrealized Gain Unrealized Loss Fair Value Money market funds $ 48,830 $ — $ — $ 48,830 Less cash equivalents (48,830 ) — — (48,830 ) Total marketable securities $ — $ — $ — $ — As of December 31, 2017 (in thousands): Cost Basis Unrealized Gain Unrealized Loss Fair Value Money market funds $ 51,751 $ — $ — $ 51,751 Less cash equivalents (51,751 ) — — (51,751 ) Total marketable securities $ — $ — $ — $ — There were no realized gains or losses in the three months ended March 31, 2018 and 2017, respectively. The following is table sets forth the Company’s financial liabilities measured at fair value on a recurring basis as of the date indicated below: Basis of Fair Value Measurements Fair Value as of March 31, 2018 Level 1 Level 2 Level 3 2017 Warrants 340 — — 340 Basis of Fair Value Measurements Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 2017 Warrants 954 — — 954 The Company determined the fair value of the liability associated with its 2017 Warrants to purchase in aggregate 377,273 shares of outstanding common stock using a Black-Scholes Model. See detailed discussion in Note 10, “Stockholders’ Equity”. As of March 31, 2018 and December 31, 2017, the fair value of the long-term debt, payable in installments through year ended 2022 and 2019, respectively, approximated its carrying value of $3.0 million and $3.5 million because it is carried at a market observable interest rate, which are considered Level 2. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Components | NOTE 7 — BALANCE SHEET COMPONENTS Accrued liabilities were comprised of the following (in thousands): March 31, December 31, 2018 2017 Accrued liabilities: General and administrative $ 670 $ 374 Clinical costs 734 702 Non-clinical research 868 435 Payroll related 491 1,149 Other accrued expenses 37 30 Total accrued liabilities $ 2,800 $ 2,690 Deferred revenue was comprised of the following: March 31, December 31, 2018 2017 Deferred revenue: Grant agreements $ 1,421 $ 1,673 Research and development agreements 4,929 1,092 Total deferred revenue $ 6,350 $ 2,765 |
Borrowing Arrangements
Borrowing Arrangements | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | NOTE 8 — BORROWING ARRANGEMENTS SVB Growth Capital Loan In April 2014, the Company entered into a loan and security agreement with Silicon Valley Bank (“SVB”) that was subsequently amended, to provide for (1) growth capital advances to the Company of up to $6.0 million over three tranches based on corporate milestones (2) term loans of up to $6.0 million in the aggregate (the “Growth Capital Loan”); (3) warrants to purchase 48,874 shares of the Company’s common stock at an exercise price of $3.07 per share under the amended loan and security agreement; and (4) a final fee of $375,000 due at the loan maturity date in addition to the principal and interest payments. The Company drew down $0.8 million and $2.3 million in May and June 2015 and issued warrants to purchase 14,254 and 17,310 shares of the Company’s common stock at an exercise price of $3.07 per share under the second and amended loan and security agreement. The Company drew down $3.0 million in April 2016 and issued warrants to purchase 17,310 shares of the Company’s common stock at an exercise price of $3.07 per share under the second term loan. The warrants issued in the Loan Agreement became exercisable upon issuance and were converted into common stock upon the closing of the Merger. As of December 31, 2017, the Company had received $6 million in the aggregate from the Growth Capital Loan. The Company was required to repay the outstanding principal in 30 equal installments beginning November 1, 2016 and was due in full on April 30, 2019. Interest accrued at a rate of 1.19% above prime, or 5.44% per annum as of December 31, 2017. Interest only payments were made monthly and beginning November 1, 2016, the Company paid the first of thirty consecutive equal monthly payments of principal plus interest. The Company paid down the Growth Capital Loan on February 27, 2018, from the proceeds of the Perceptive Credit Facility, discussed below. Until the termination of the Growth Capital Loan on February 27, 2018, the Company paid $3.2 million in principal, $375,000 in a final fee, and $42,000 in interest during the three months ended March 31, 2018 and $0.6 million in principal and $66,000 in interest in the three months ended March 31, 2017. As of March 31, 2018 and December 31, 2017 the Growth Capital Loan principal balance was zero and $3.5 million, respectively. As of December 31, 2017, the Company was in compliance with the non-financial covenants of the Growth Capital Loan. Perceptive Credit Facility On February 27, 2018, the Company entered into a term loan facility with Perceptive Credit Holdings II, LP (“Perceptive”) in the amount of $10.0 million (the “Perceptive Credit Facility”). The Perceptive Credit Facility consists of a $5.0 million term loan, which was drawn on the effective date of the Perceptive Credit Facility and an additional $5.0 million term loan to be drawn six months following the effective date of the Perceptive Credit Facility. The Company used a portion of the proceeds from the Perceptive Credit Facility to pay off the existing debt facility with SVB. Borrowings under the Perceptive Credit Facility are secured by all of the property and assets of the Company. The principal on the facility accrues interest at an annual rate equal to a three-month LIBOR plus the Applicable Margin. The Applicable Margin is 11.00%. Upon the occurrence, and during the continuance, of an event of default, the Applicable Margin, defined above, will be increased by 4.00% per annum. The interest rate at March 31, 2018 was 12.96%. Payments for the first twenty-four months are interest only and are paid quarterly. After the second anniversary of the closing date of the Perceptive Credit Facility, principal payments of $200,000 are due each calendar quarter, with a final payment of $3.4 million due on February 27, 2022. This term loan facility matures on February 27, 2022 and includes both financial and non-financial covenants, including a minimum cash balance requirement. The Company is required to pay an exit fee of $100,000 on a pro rata basis on the maturity date or the earlier date of repayment of the term loans in full. For the three months ended March 31, 2018, the Company recorded $59,000 of interest expense and $54,000 of amortization of debt discount in interest expense, related to the Perceptive Credit Facility. For the three months ended March 31, 2017, the Company did not incur any interest expense related to the Perceptive Credit Facility, since the facility was not in place at that time. In connection with the Perceptive Credit Facility, on February 27, 2018 the Company issued Perceptive a warrant to purchase 190,000 shares of the Company’s common stock. The warrant will be exercisable for a period of seven years from the date of issuance at an exercise price of $9.5792, subject to certain adjustments as specified in the Warrant. See Note 10, “Stockholders’ Equity” for further discussion of the warrant. As of March 31, 2018 and December 31, 2017 the Perceptive Credit Facility principal balance was $5.0 million and zero, respectively. As of March 31, 2018, the Company was in compliance with the non-financial covenants of the Perceptive Credit Facility. Future required principal and final payments on the Perceptive Credit Facility were as follows as of March 31, 2018: 2018 (remaining) $ — 2019 — 2020 800 2021 800 2022 3,500 Total debt 5,100 Debt discount and deferred finance costs (2,101 ) Total debt, net $ 2,999 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 — COMMITMENTS AND CONTINGENCIES The Company is obligated under operating lease agreements covering the Company’s office facilities in Austin, Texas and Jersey City, New Jersey, respectively. Facilities expense under the operating leases was approximately $340,000 and $77,000 three months ended March 31, 2018 and 2017, respectively. Future minimum payments due under the operating lease agreements at March 31, 2018 were as follows (in thousands): 2018 (remaining) $ 832 2019 1,135 2020 1,048 2021 1,074 2022 1,096 Thereafter 486 Total $ 5,671 The Company leases laboratory equipment under non-cancelable capital lease agreements. As of March 31, 2018 and December 31, 2017, laboratory equipment under capital leases included in property and equipment totaled approximately $237,000 and $162,000, respectively, net of accumulated amortization of approximately $83,000 and $75,000, respectively. Future minimum capital lease payments consisted of the following at March 31, 2018 (in thousands): 2018 (remaining) $ 41 2019 33 2020 19 Total future minimum capital lease payments 93 Less: amount representing interest (7 ) Total capital lease obligations 86 Current portion of lease obligations (45 ) Capital lease obligations, non-current portion $ 41 Contingencies In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by or on behalf of the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers and directors in certain circumstances. The Company maintains product liability insurance and comprehensive general liability insurance, which may cover certain liabilities arising from its indemnification obligations. It is not possible to determine the maximum potential amount of exposure under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular indemnification obligation. Such indemnification obligations may not be subject to maximum loss clauses. Management is not currently aware of any matters that could have a material adverse effect on the financial position, results of operations or cash flows of the Company. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 10 — STOCKHOLDERS’ EQUITY Concurrent Financing On August 1, 2017, the Company entered into the a securities purchase agreement with Longitude Venture Partners III, L.P. and certain other accredited investors (the Longitude Securities Purchase Agreement”), pursuant to which the Company sold an aggregate of 5,793,063 units (the “Units”) accredited investors having an aggregate purchase price of $40.0 million, each such Unit consisting of (i) one (1) share (the “Shares”) of our common stock and (ii) a warrant (the “Private Placement Warrants”) to purchase 0.5 shares of our common stock (the “Private Placement”). The Private Placement was pursuant to equity commitment letter agreements entered into by and between the Company and investors in March and June 2017. The purchase price per Unit was $6.9048. The Warrants will be exercisable for a period of seven years from the date of their issuance at a per-share exercise price of $6.8423 (which exercise price shall be payable in cash or through a cashless exercise mechanic), subject to certain adjustments as specified in the Warrants. At March 31, 2018, there were warrants outstanding under the Longitude Securities Purchase Agreement to purchase 2,896,532 shares of common stock. The warrants met the requirements for equity classification under ASC 815, “Derivatives and Hedging” (ASC 815), and the value of these warrants is included in additional paid-in capital on the balance sheet. The Private Placement Warrants are exercisable upon issuance and expire August 1, 2024. In December 2015, the Company entered into an agreement (the “Wedbush Agreement”) with Wedbush Securities Inc., which was subsequently amended in December of 2017, related to their services associated with the equity financing under the Longitude Securities Purchase Agreement. As part of the Wedbush Agreement, the Company issued to Wedbush Securities, Inc, warrants to purchase 57,930 shares of our common stock (the “Wedbush Warrants”). The Wedbush Warrants will be exercisable for a period of seven years from the date of their issuance at a per-share exercise price of $6.8423 (which exercise price shall be payable in cash or through a cashless exercise mechanic), subject to certain adjustments as specified in the Wedbush Warrants. At March 31, 2018, there were warrants outstanding under the Wedbush Agreement to purchase 57,930 shares of common stock. The warrants met the requirements for equity classification under ASC 815, and the value of these warrants is included in additional paid-in capital on the balance sheet. The Wedbush Warrants are exercisable upon issuance and expire December 1, 2024. The total warrants outstanding under this amended agreement are 2,954,462 and are listed in the summary table below under “2017 Private Placement Warrants”. Subsequent Financing In connection with the execution of the Takeda Multi-Target Agreement, Threshold and Private Molecular entered into the Takeda Stock Purchase Agreement. Pursuant to the Takeda Stock Purchase Agreement, following the consummation of the Merger and Private Placement, Takeda purchased 2,922,993 shares of the Company’s common stock, at a price per share of $6.84, for an aggregate purchase price of $20 million. Common Stock Warrants As of March 31, 2018, the Company had warrants outstanding to purchase 3.5 million shares of the Company’s stock. The Company accounts for certain of its common stock warrants under guidance in ASC 480 that clarifies the determination of whether an instrument is classified as a liability or equity. The following table summarizes the Company’s outstanding warrants as of March 31, 2018 and December 31, 2017 and the warrant activity during the three months ended March 31, 2018: Warrants Outstanding Warrants Outstanding Weighted Average December 31, 2017 Issued Exercised March 31, 2018 Exercise Price 2017 Warrants 377,273 — — 377,273 $ 39.82 2017 Private Placement Warrants 2,954,462 — — 2,954,462 $ 6.84 2018 Warrants — 190,000 — 190,000 $ 9.58 3,331,735 190,000 — 3,521,735 On August 1, 2017, as part of the Merger, the Company assumed the warrant liability of the predecessor Threshold, related to issued warrants to purchase 377,273 shares of our common stock (“2017 Warrants”), with an exercise price of $39.82 per share. Refer to Note 3, “Merger with Private Molecular”, for further detail about the Merger. Due to change in control provisions outside of the Company’s control in the 2017 Warrants, the guidance requires the Company’s outstanding warrants to be classified as liabilities and to be fair valued at each reporting period, with the changes in fair value recognized as change in fair value of warrant liabilities in the Company’s consolidated statements of operations and comprehensive loss. The following table is a reconciliation of the 2017 Warrant liability measured at fair value using level 3 inputs (in thousands): Warrant Liability Balance at December 31, 2017 $ 954 Change in fair value during the three months ended March 31, 2018 (614 ) Balance at March 31, 2018 $ 340 The fair value of the 2017 Warrants on March 31, 2018 and December 31, 2017 was determined using a Black-Scholes model with the following key level 3 inputs: March 31, 2018 December 31, 2017 Risk-free interest rate 2.27 % 1.89 % Expected life (in years) 1.89 2.13 Dividend yield — — Volatility 89 % 103 % Stock price $ 8.00 $ 10.02 During the three months ended March 31, 2018 the change in fair value of $614,000 of noncash income related to the 2017 Warrants was recorded as change in fair value of warrant liabilities in the Company’s consolidated statement of operations and comprehensive loss. Significant changes in the level 3 inputs of volatility, stock price and expected life, used in the fair value measurement of the 2017 Warrants in isolation could result in a material change in the fair value measurement. On August 1, 2017, in conjunction with the Private Placement, the Company issued warrants to purchase 2,896,532 shares of the Company’s common stock with an exercise price of $6.84, the Private Placement Warrants as described above. The Private Placement warrants are classified as equity and were valued at $16.3 million using the Black-Scholes model, and recorded in additional paid-in capital. The Black-Scholes inputs used were: expected dividend rate of 0%, expected volatility of 147%, risk free interest rate of 2.07%, and expected term of 7.0 years. In December 2017 the Company issued warrants to purchase 57,930 shares of the Company’s common stock with an exercise price of $6.84, the Wedbush Warrants as described above. The Wedbush Warrants are classified as equity and recorded in additional paid-in capital; and were valued at $0.4 million using the Black-Scholes model. The Black-Scholes inputs used were: expected dividend rate of 0%, expected volatility of 108%, risk free interest rate of 2.33%, and expected term of 7.0 years. The Wedbush Warrants together with the Private Placement Warrants are combined as “2017 Private Placement Warrants” in the table above. On February 28, 2018, in connection with the Perceptive Credit Facility, the Company issued warrants to purchase 190,000 shares of the Company’s common stock with an exercise price of $9.58, the 2018 Warrants in the table above. The 2018 Warrants are exercisable for a period of seven years from the date of issuance, subject to certain adjustments as specified in the Warrants. The 2018 Warrants were classified as equity and recorded in additional paid-in capital; and were valued at $1.5 million using the Black-Scholes model. The Black-Scholes inputs used were: expected dividend rate of 0%, expected volatility of 105%, risk free interest rate of 2.83%, and expected term of 7.0 years. See Note 8, “Borrowing Arrangements”, for further detail about the Perceptive Credit Facility. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Compensation | NOTE 11 — STOCK BASED COMPENSATION The Company recognizes stock-based compensation in accordance with ASC 718, “Compensation—Stock Compensation.” Stock-based compensation expense, which consists of the compensation cost for employee stock options granted under the 2009 Stock Plan, as amended (the “2009 Stock Plan”) and under the Company’s 2014 Equity Incentive Plan, as amended (the “2014 Equity Incentive Plan”) and the value of options issued to non-employees for services rendered, was allocated to research and development and general and administrative expenses in the unaudited consolidated statements of operations. Stock-based compensation for the three months ended March 31, 2018 and 2017 were (in thousands): Three Months Ended March 31, 2018 2017 Research and development $ 180 $ — General and administrative 463 26 Total stock-based compensation $ 643 $ 26 Valuation Assumptions The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula and a single option award approach. This fair value is being amortized ratably over the requisite service periods of the awards, which is generally the vesting period. The fair value of employee stock options was estimated using the following weighted-average assumptions for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Employee Stock Options: Risk-free interest rate 2.68 % 1.95 % Expected term (in years) 6.02 5.00 Dividend yield — — Volatility 108 % 76 % Weighted-average fair value of stock options granted $ 8.85 $ 0.82 To determine the expected term of the Company’s employee stock options granted, the Company utilized the simplified approach as defined by SEC Staff Accounting Bulletin No. 107, “Share-Based Payment” (“SAB 107”). To determine the risk-free interest rate, the Company utilized an average interest rate based on U.S. Treasury instruments with a term consistent with the expected term of the Company’s stock based awards. To determine the expected stock price volatility for the Company’s stock based awards, the Company utilized the historical volatility of the Company’s common stock. The fair value of all the Company’s stock based awards assumes no dividends as the Company does not anticipate paying cash dividends on its common stock. Employee Stock-based Compensation Expense As required by ASC 718, the Company recognized $643,000 and $26,000 of stock-based compensation expense related to stock options under the Company’s equity incentive plans for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, the total unrecognized compensation cost related to unvested stock-based awards granted to employees under the Company’s equity incentive plans was approximately $9.2 million. This cost will be recorded as compensation expense on a ratable basis over the remaining weighted average requisite service period of approximately 3.4 years. Equity Incentive Plans The Company’s equity incentive plans include the 2009 Stock Plan and the 2014 Equity Incentive Plan. The Company does not intend to issue any shares under the 2009 Stock Plan. The following table summarizes stock option activity under the Company’s equity incentive plans: Options Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2017 2,768,711 $ 12.07 5.6 $ 11.0 Granted 297,750 $ 10.69 — — Exercised (161,705 ) $ 0.91 — — Forfeitures (24,995 ) $ 31.47 — — Outstanding at March 31, 2018 2,879,761 $ 12.38 6.2 $ 7.7 Exercisable at March 31, 2018 1,470,533 $ 15.89 2.9 $ 6.6 The total intrinsic value of stock options exercised during the three months ended March 31, 2018, was $1.6 million, as determined at the date of the option exercise. Cash received from stock option exercises was $148,000 for the three months ended March 31, 2018. No stock options were exercised during the three months ended March 31, 2017. The Company issues new shares of common stock upon exercise of options. In connection with these exercises, there was no tax benefit realized by the Company due to the Company’s current loss position. |
Organization and Summary of S17
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited interim condensed consolidated financial statements reflect the historical results of Private Molecular prior to the completion of the Merger, and do not include the historical results of the Company prior to the completion of the Merger. All share and per share disclosures have been adjusted to reflect the exchange of shares in the Merger, and the 11-for-1 reverse stock split of the common stock effected on August 1, 2017. Under U.S. GAAP, the Merger is treated as a “reverse merger” under the purchase method of accounting. For accounting purposes, Private Molecular is considered to have acquired Threshold. See Note 3, “Merger with Private Molecular”, for further details on the Merger and the U.S. GAAP accounting treatment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP pursuant to the requirements of the Securities and Exchange Commission (“SEC”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for the fair presentation of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the recorded amounts reported therein. A change in facts or circumstances surrounding the estimate could result in a change to estimates and impact future operating results. The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2018. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, and reflect the elimination of intercompany accounts and transactions. |
Reclassifications | Reclassifications Certain amounts in prior year’s presentations have been reclassified to conform to the current presentation. These classifications had no effect on previously reported net loss. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board’s (“FASB”) provisions of ASC 606, Revenue from Contracts with Customers Revenue Recognition Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) The Company identifies the goods or services promised within each collaboration agreement and assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. In assessing whether a promised good or service is distinct, the Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. If a promised good or service is not distinct, an entity is required to combine that promised good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct. The allocation of the transaction price to the performance obligations in proportion to their standalone selling prices is determined at contract inception. If the consideration promised in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer. The Company determines the amount of variable consideration by using the expected value method or the most likely amount method. The Company includes the unconstrained amount of estimated variable consideration in the transaction price. The amount included in the transaction price is the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. In determining the transaction price, the Company adjusts consideration for the effects of the time value of money if there is a significant benefit of financing. The Company assessed its collaboration agreements and concluded that no significant financing components were present. If an arrangement contains customer options that allow the customer to acquire additional goods or services, including an exclusive license to the Company’s intellectual property, the goods and services underlying the customer options are evaluated to determine whether they are deemed to represent a material right. In determining whether the customer option has a material right, the Company assesses whether there is an option to acquire additional goods or services at a discount. If the customer option is determined not to represent a material right, the option is not considered to be performance obligations at the outset of the arrangement. If the customer option is determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied over time, based on the use of an input method. Performance obligations may include research and development services to be performed by the Company on behalf of the collaboration partner. Revenue is recognized on research and development efforts as the services are performed and presented on a gross basis, since the Company is the principal. Refer to Note 4 ,” Research and Development Agreements” |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash and cash equivalents, investments, long term debt and accounts receivable. The Company’s cash, cash equivalents are with two major financial institutions in the United States. The Company performs an ongoing credit evaluation of its strategic partners’ financial conditions and generally does not require collateral to secure accounts receivable from its strategic partners. The Company’s exposure to credit risk associated with non-payment will be affected principally by conditions or occurrences within Takeda Pharmaceutical Company Ltd. (“Takeda”). Approximately 34% of total revenues for the three months ended March 31, 2018, were derived from Takeda. There was $4.0 million in accounts receivable due from Takeda at March 31, 2018 that was received in April 2018. See also Note 4, “Research and Development Agreements”, regarding the collaboration agreements with Takeda. Drug candidates developed by the Company may require approvals or clearances from the U.S. Food and Drug Administration (“FDA”) or international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s drug candidates will receive any of the required approvals or clearances. If the Company were to be denied approval or clearance or any such approval or clearance were to be delayed, it would have a material adverse impact on the Company. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Effective January 1, 2018, the Company adopted ASC 606, which provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 on a modified retrospective basis through a cumulative adjustment to equity. The impact of the adoption of the standard to prior period amounts is discussed below in Note 4, “ Research and Development Agreements” In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires management to record right-to-use asset and lease liability on the statement of financial position for operating leases. ASU 2016-02 is effective for annual and interim reporting periods beginning on or after December 15, 2018 and the modified retrospective approach is required. The Company is in the process of evaluating the impact the adoption of this standard would have on its consolidated financial statements and disclosures and expects the new standard to significantly increase the reported assets and liabilities on its consolidated balance sheets. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting” to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this new guidance, modification accounting is required if the fair value, vesting conditions, or classification of the award changes as a result of the change in terms or conditions. ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within each annual reporting period. The Company adopted the standard in the first quarter of 2018 and it did not have a material impact to its consolidated financial statements. In December 2017, the SEC issued Staff Accounting Bulletin ("SAB") 118 to address the application of GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act, or the Tax Act, which was signed into law on December 22, 2017. In March 2018, the FASB issued ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)," which amended ASC 740 to incorporate the requirements of SAB 118. There were no changes in the provisional amounts recorded by the Company at December 31, 2017 related to the Tax Act. The Company continues to evaluate the impact of the Tax Act. |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator | The following is the calculation of basic and diluted net loss per share (in thousands, except share and per share data ) : Three Months Ended March 31, 2018 2017 Numerator: Net loss attributable to common shareholders $ 8,714 $ 1,622 Denominator: Weighted average common shares outstanding - basic and diluted 26,989,693 214,641 Net loss per share: Basic and diluted $ 0.32 $ 7.56 |
Warrants and Options Excluded from Computation of Diluted Net Loss Per Share | The following outstanding warrants and options were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an antidilutive effect (in thousands): Three Months Ended March 31, 2018 2017 Shares issuable upon exercise of warrants 3,522 35 Shares issuable upon exercise of stock options 2,880 458 |
Merger with Private Molecular (
Merger with Private Molecular (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Purchase Price for Threshold on Closing Date of Merger | The purchase price for Threshold on August 1, 2017, the closing date of the Merger, was as follows (in thousands, except per share amounts): August 1, 2017 Number of share of the combined company owned by Threshold stockholders 6,508 (1) Multiplied by the price per share of Threshold common stock $ 5.94 (2) Purchase price before options $ 38,658 Threshold options assumed 1,006 (3) Settlement of preexisting bridge note with Threshold (4,010 ) (4) Total purchase price $ 35,654 1. Represents the number of shares of common stock of the combined company that Threshold stockholders owned as of the closing of the Merger pursuant to the Merger Agreement. This amount is calculated as 6,508,356 shares of Threshold common stock outstanding as of August 1, 2017, adjusted for the 11-for-1 reverse stock split. 2. The fair value of Threshold common stock used in determining the purchase price was $5.94, which was derived from the $0.54 per share closing price of Threshold on August 1, 2017, the current price at the time of closing, adjusted for the 11-for-1 reverse stock split. 3. Because the Company is considered to be the acquirer for accounting purposes, the pre-Merger vested stock options granted by Threshold under the 2014 Equity Incentive Plan are deemed to have been exchanged for equity awards of the Company and as such the portion of the acquisition date fair value of these equity awards attributable to pre-Merger service to Threshold were accounted for as a component of the consideration transferred. 4. Represents the bridge loan as of the closing date of the Merger. As the receivable on Threshold’s balance sheet was settled as part of the merger, it is deemed to be a reduction in the purchase price. |
Summary of Allocation of Purchase Consideration to Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase consideration to the assets acquired and liabilities assumed based on their fair values as of August 1, 2017 (in thousands): August 1, 2017 Cash and cash equivalents $ 11,216 Prepaid expenses and other current assets 945 In-process research and development (IPR&D) 26,623 Accounts payable, accrued expenses (2,009 ) Warrant liability (1,121 ) Net assets acquired $ 35,654 |
Research and Development Agre20
Research and Development Agreements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Research and Development Revenues Disaggregated by Location | Research and Development revenues disaggregated by location were as follows (in thousands): March 31, 2018 March 31, 2017 Japan $ 163 $ 1,260 United States 68 500 Total Research and Development Revenue $ 231 $ 1,760 (1) Collaboration revenue is attributable to regions based on the location of our collaboration partner's parent company headquarters. |
Schedule of Contract Assets and Contract Liabilities for Performance Obligations related to Collaboration Agreements | Changes in our contract assets and liabilities under Topic 606 were as follows (in thousands): March 31, 2018 December 31, 2017 (1) Contract Assets Unbilled revenue $ 54 $ — Contract Liabilities Deferred revenue $ 4,929 $ 1,092 (1) December 31, 2017 balances prior to the impact related to the modified retrospective adoption of ASC 606. During the three months ended March 31, 2018, the Company recorded $163,000 in research and development revenue that was previously included in deferred revenue at December 31, 2017. |
ASC 2014-09 | |
Schedule of Impact of Adoption of New Revenue Standard | As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the Condensed Consolidated Balance Sheet as of January 1, 2018 (in thousands): Balance Sheet December 31, 2017 Effect of adoption of ASC 606 (1) January 1, 2018 Assets Other current assets $ 19 $ 54 $ 73 Total assets 90,391 54 90,445 Stockholder's equity Accumulated deficit (64,471 ) 54 (64,417 ) Total liabilities and stockholder's equity $ 90,391 $ 54 $ 90,445 (1) This impact represents the amount of revenue that would have been recognized and accounted for as unbilled revenue, during the year ended December 31, 2017. The impact of adoption on the Company’s Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2018 was as follows (in thousands): Balance without As reported Effect of adoption of adoption of ASC 606 Statement of operations and comprehensive loss March 31, 2018 ASC 606 (1) March 31, 2018 Research and development revenue $ 231 $ (68 ) $ 163 Total revenue 482 (68 ) 414 Net loss $ 8,714 $ 68 $ 8,782 Net loss per share $ 0.32 $ 0.01 $ 0.33 (1) The adoption of ASC 606 resulted in additional revenues recognized in the first quarter of 2018. This impact represents the amount of aggregate revenue that would not have been recognized during the quarter ended March 31, 2018 under Previous Guidance. The impact of adoption on the Company’s Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2018 was as follows (in thousands): Balance without As reported Effect of adoption of adoption of ASC 606 Statement of cash flows March 31, 2018 ASC 606 (1) March 31, 2018 Net loss $ 8,714 $ 68 $ 8,782 Changes in operating assets and liabilities: Other current assets (71 ) (68 ) (3 ) Net cash used in operating activities $ (8,983 ) $ — $ (8,983 ) (1) The adoption of ASC 606 resulted in a decrease of net loss and an increase in unbilled revenue that is included in other current assets. |
Marketable Securities and Fai21
Marketable Securities and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets at Fair Value on Recurring Basis | The following table sets forth the Company’s financial assets (cash equivalents and marketable securities) at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 (in thousands): Basis of Fair Value Measurements Fair Value as of March 31, 2018 Level 1 Level 2 Level 3 Money market funds $ 48,830 $ 48,830 $ — $ — Basis of Fair Value Measurements Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Money market funds $ 51,751 $ 51,751 $ — $ — |
Summary of Company's Available-for-Sale Securities | The Company invests in highly-liquid, investment-grade securities. The following is a summary of the Company’s available-for-sale securities at March 31, 2018 and December 31, 2017 (in thousands): As of March 31, 2018 Cost Basis Unrealized Gain Unrealized Loss Fair Value Money market funds $ 48,830 $ — $ — $ 48,830 Less cash equivalents (48,830 ) — — (48,830 ) Total marketable securities $ — $ — $ — $ — As of December 31, 2017 (in thousands): Cost Basis Unrealized Gain Unrealized Loss Fair Value Money market funds $ 51,751 $ — $ — $ 51,751 Less cash equivalents (51,751 ) — — (51,751 ) Total marketable securities $ — $ — $ — $ — |
Financial Liabilities at Fair Value on Recurring Basis | The following is table sets forth the Company’s financial liabilities measured at fair value on a recurring basis as of the date indicated below: Basis of Fair Value Measurements Fair Value as of March 31, 2018 Level 1 Level 2 Level 3 2017 Warrants 340 — — 340 Basis of Fair Value Measurements Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 2017 Warrants 954 — — 954 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Components of Accrued Liabilities | Accrued liabilities were comprised of the following (in thousands): March 31, December 31, 2018 2017 Accrued liabilities: General and administrative $ 670 $ 374 Clinical costs 734 702 Non-clinical research 868 435 Payroll related 491 1,149 Other accrued expenses 37 30 Total accrued liabilities $ 2,800 $ 2,690 |
Components of Deferred Revenue | Deferred revenue was comprised of the following: March 31, December 31, 2018 2017 Deferred revenue: Grant agreements $ 1,421 $ 1,673 Research and development agreements 4,929 1,092 Total deferred revenue $ 6,350 $ 2,765 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Growth Capital Loan and Perceptive Credit Facility | |
Debt Instrument [Line Items] | |
Schedule of Required Future Principal Payments | Future required principal and final payments on the Perceptive Credit Facility were as follows as of March 31, 2018: 2018 (remaining) $ — 2019 — 2020 800 2021 800 2022 3,500 Total debt 5,100 Debt discount and deferred finance costs (2,101 ) Total debt, net $ 2,999 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Payments Due under Operating Lease Agreements | Future minimum payments due under the operating lease agreements at March 31, 2018 were as follows (in thousands): 2018 (remaining) $ 832 2019 1,135 2020 1,048 2021 1,074 2022 1,096 Thereafter 486 Total $ 5,671 |
Schedule of Future Minimum Capital Lease Payments | Future minimum capital lease payments consisted of the following at March 31, 2018 (in thousands): 2018 (remaining) $ 41 2019 33 2020 19 Total future minimum capital lease payments 93 Less: amount representing interest (7 ) Total capital lease obligations 86 Current portion of lease obligations (45 ) Capital lease obligations, non-current portion $ 41 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Outstanding Warrants to Purchase Shares of Common Stock | As of March 31, 2018, the Company had warrants outstanding to purchase 3.5 million shares of the Company’s stock. The Company accounts for certain of its common stock warrants under guidance in ASC 480 that clarifies the determination of whether an instrument is classified as a liability or equity. The following table summarizes the Company’s outstanding warrants as of March 31, 2018 and December 31, 2017 and the warrant activity during the three months ended March 31, 2018: Warrants Outstanding Warrants Outstanding Weighted Average December 31, 2017 Issued Exercised March 31, 2018 Exercise Price 2017 Warrants 377,273 — — 377,273 $ 39.82 2017 Private Placement Warrants 2,954,462 — — 2,954,462 $ 6.84 2018 Warrants — 190,000 — 190,000 $ 9.58 3,331,735 190,000 — 3,521,735 |
Reconciliation of Warrant Liability Measured at Fair Value | The following table is a reconciliation of the 2017 Warrant liability measured at fair value using level 3 inputs (in thousands): Warrant Liability Balance at December 31, 2017 $ 954 Change in fair value during the three months ended March 31, 2018 (614 ) Balance at March 31, 2018 $ 340 |
Outstanding Warrants Valuation Assumption | The fair value of the 2017 Warrants on March 31, 2018 and December 31, 2017 was determined using a Black-Scholes model with the following key level 3 inputs: March 31, 2018 December 31, 2017 Risk-free interest rate 2.27 % 1.89 % Expected life (in years) 1.89 2.13 Dividend yield — — Volatility 89 % 103 % Stock price $ 8.00 $ 10.02 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-based compensation expense, which consists of the compensation cost for employee stock options granted under the 2009 Stock Plan, as amended (the “2009 Stock Plan”) and under the Company’s 2014 Equity Incentive Plan, as amended (the “2014 Equity Incentive Plan”) and the value of options issued to non-employees for services rendered, was allocated to research and development and general and administrative expenses in the unaudited consolidated statements of operations. Stock-based compensation for the three months ended March 31, 2018 and 2017 were (in thousands): Three Months Ended March 31, 2018 2017 Research and development $ 180 $ — General and administrative 463 26 Total stock-based compensation $ 643 $ 26 |
Weighted-Average Fair Value Valuation Assumptions | The fair value of employee stock options was estimated using the following weighted-average assumptions for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Employee Stock Options: Risk-free interest rate 2.68 % 1.95 % Expected term (in years) 6.02 5.00 Dividend yield — — Volatility 108 % 76 % Weighted-average fair value of stock options granted $ 8.85 $ 0.82 |
Stock Option Activity Under Equity Incentive Plan | The following table summarizes stock option activity under the Company’s equity incentive plans: Options Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2017 2,768,711 $ 12.07 5.6 $ 11.0 Granted 297,750 $ 10.69 — — Exercised (161,705 ) $ 0.91 — — Forfeitures (24,995 ) $ 31.47 — — Outstanding at March 31, 2018 2,879,761 $ 12.38 6.2 $ 7.7 Exercisable at March 31, 2018 1,470,533 $ 15.89 2.9 $ 6.6 |
Organization and Summary of S27
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | Aug. 01, 2017 | Mar. 31, 2018USD ($) |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Reverse stock split of common stock, description | 11-for-1 reverse stock split | |
Reverse stock split of common stock conversion ratio | 11 | |
Takeda Pharmaceuticals Inc | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Accounts receivable | $ 4 | |
Revenue | Credit Risk | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of total revenues | 34.00% |
Net Loss Per Common Share - Rec
Net Loss Per Common Share - Reconciliation of Numerator and Denominator (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net loss attributable to common shareholders | $ 8,714 | $ 1,622 |
Denominator: | ||
Weighted average common shares outstanding - basic and diluted | 26,989,693 | 214,641 |
Net loss per share: | ||
Basic and diluted | $ 0.32 | $ 7.56 |
Net Loss Per Common Share - War
Net Loss Per Common Share - Warrants and Options Excluded from Computation of Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares issuable | 3,522 | 35 |
Stock Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares issuable | 2,880 | 458 |
Merger with Private Molecular -
Merger with Private Molecular - Additional Information (Detail) - USD ($) | Aug. 01, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 01, 2017 | Mar. 24, 2017 |
Business Acquisition [Line Items] | |||||
Exercise price per share on stock options after reverse stock split | $ 10.69 | ||||
Stock compensation | $ 643,000 | $ 26,000 | |||
2014 Equity Incentive Plan | |||||
Business Acquisition [Line Items] | |||||
Stock compensation | $ 1,200,000 | ||||
Threshold | |||||
Business Acquisition [Line Items] | |||||
Common stock shares issued in exchange of each share | 7.7844 | ||||
Threshold equity holders ownership interest | 34.40% | ||||
Private Molecular equity holders ownership interest | 65.60% | ||||
Stock option outstanding to purchase common stock | 963,681 | ||||
Number of vested stock option shares after reverse stock split | 963,681 | ||||
Exercise price per share on stock options after reverse stock split | $ 33.62 | ||||
Fair value inputs discount rate | 12.00% | ||||
Transaction costs associated with Merger | $ 2,000,000 | ||||
Principal amount | $ 2,000,000 | $ 2,000,000 | |||
Promissory note interest rate | 1.00% |
Merger with Private Molecular31
Merger with Private Molecular - Purchase Price for Threshold on Closing Date of Merger (Detail) - Threshold $ / shares in Units, $ in Thousands | Aug. 01, 2017USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Number of share of the combined company owned by Threshold stockholders | shares | 6,508,356 |
Multiplied by the price per share of Threshold common stock | $ / shares | $ 5.94 |
Purchase price before options | $ 38,658 |
Threshold options assumed | 1,006 |
Settlement of preexisting bridge note with Threshold | (4,010) |
Total purchase price | $ 35,654 |
Merger with Private Molecular32
Merger with Private Molecular - Purchase Price for Threshold on Closing Date of Merger (Parenthetical) (Detail) | Aug. 01, 2017$ / sharesshares | Mar. 31, 2018$ / shares | Dec. 31, 2017$ / shares |
Business Acquisition [Line Items] | |||
Reverse stock split of common stock, description | 11-for-1 reverse stock split | ||
Reverse stock split of common stock conversion ratio | 11 | ||
Common stock closing price | $ 8 | $ 10.02 | |
Threshold | |||
Business Acquisition [Line Items] | |||
Number of share of the combined company owned by Threshold stockholders | shares | 6,508,356 | ||
Reverse stock split of common stock, description | 11-for-1 reverse stock split | ||
Reverse stock split of common stock conversion ratio | 11 | ||
Price per share of Threshold common stock | $ 5.94 | ||
Common stock closing price | $ 0.54 |
Merger with Private Molecular33
Merger with Private Molecular - Summary of Allocation of Purchase Consideration to Assets Acquired and Liabilities Assumed (Detail) - Threshold $ in Thousands | Aug. 01, 2017USD ($) |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $ 11,216 |
Prepaid expenses and other current assets | 945 |
In-process research and development (IPR&D) | 26,623 |
Accounts payable, accrued expenses | (2,009) |
Warrant liability | (1,121) |
Net assets acquired | $ 35,654 |
Research and Development Agre34
Research and Development Agreements - Schedule of Research and Development Revenues Disaggregated by Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Recognition [Line Items] | ||
Research and development revenue | $ 231 | $ 1,760 |
JAPAN | ||
Revenue Recognition [Line Items] | ||
Research and development revenue | 163 | 1,260 |
UNITED STATES | ||
Revenue Recognition [Line Items] | ||
Research and development revenue | $ 68 | $ 500 |
Research and Development Agre35
Research and Development Agreements - Schedule of Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
ASSETS | |||
Other current assets | $ 144 | $ 19 | |
Total assets | 87,215 | 90,391 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accumulated deficit | (73,130) | (64,471) | |
Total liabilities and stockholder's equity | $ 87,215 | $ 90,391 | |
ASC 2014-09 | |||
ASSETS | |||
Other current assets | $ 73 | ||
Total assets | 90,445 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accumulated deficit | (64,417) | ||
Total liabilities and stockholder's equity | 90,445 | ||
Effect of Adoption of ASC 606 | ASC 2014-09 | |||
ASSETS | |||
Other current assets | 54 | ||
Total assets | 54 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accumulated deficit | 54 | ||
Total liabilities and stockholder's equity | $ 54 |
Research and Development Agre36
Research and Development Agreements - Schedule of Impact of Adoption on Condensed Consolidated Statement of Operations and Comprehensive (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Recognition [Line Items] | ||
Research and development revenue | $ 231 | $ 1,760 |
Total revenue | 482 | 1,885 |
Net loss | $ 8,714 | $ 1,195 |
Basic and diluted | $ 0.32 | $ 7.56 |
ASC 2014-09 | Effect of Adoption of ASC 606 | ||
Revenue Recognition [Line Items] | ||
Research and development revenue | $ (68) | |
Total revenue | (68) | |
Net loss | $ 68 | |
Basic and diluted | $ 0.01 | |
ASC 2014-09 | Balance without Adoption of ASC 606 | ||
Revenue Recognition [Line Items] | ||
Research and development revenue | $ 163 | |
Total revenue | 414 | |
Net loss | $ 8,782 | |
Basic and diluted | $ 0.33 |
Research and Development Agre37
Research and Development Agreements - Schedule of Impact of Adoption on Condensed Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Recognition [Line Items] | ||
Net loss | $ 8,714 | $ 1,195 |
Changes in operating assets and liabilities: | ||
Other current assets | (71) | 0 |
Net cash used in operating activities | (8,983) | $ (2,654) |
ASC 2014-09 | Effect of Adoption of ASC 606 | ||
Revenue Recognition [Line Items] | ||
Net loss | 68 | |
Changes in operating assets and liabilities: | ||
Other current assets | (68) | |
Net cash used in operating activities | 0 | |
ASC 2014-09 | Balance without Adoption of ASC 606 | ||
Revenue Recognition [Line Items] | ||
Net loss | 8,782 | |
Changes in operating assets and liabilities: | ||
Other current assets | (3) | |
Net cash used in operating activities | $ (8,983) |
Research and Development Agre38
Research and Development Agreements - Schedule of Contract Assets and Contract Liabilities for Performance Obligations related to Collaboration Agreements (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Contract Liabilities | ||
Deferred revenue | $ 6,350 | $ 2,765 |
ASC 2014-09 | ||
Contract Assets | ||
Unbilled revenue | 54 | 0 |
Contract Liabilities | ||
Deferred revenue | $ 4,929 | $ 1,092 |
Research and Development Agre39
Research and Development Agreements - Schedule of Contract Assets and Contract Liabilities for Performance Obligations related to Collaboration Agreements (Parenthetical) (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Contract With Customer Asset And Liability [Line Items] | ||
Research and development revenue | $ 231,000 | $ 1,760,000 |
Deferred Revenue | ||
Contract With Customer Asset And Liability [Line Items] | ||
Research and development revenue | $ 163,000 |
Research and Development Agre40
Research and Development Agreements - Additional Information (Detail) - USD ($) | Aug. 31, 2017 | Jun. 23, 2017 | Sep. 30, 2016 | Nov. 30, 2011 | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2016 |
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Date when performance obligations are expected to be fulfilled and revenue fully recognized. | Jun. 30, 2019 | |||||||||
Revenue remaining performance obligations not yet satisfied | $ 5,100,000 | $ 5,100,000 | ||||||||
Research and development revenue | 231,000 | $ 1,760,000 | ||||||||
Accounts receivable from Takeda | 4,000,000 | 4,000,000 | $ 0 | |||||||
Grant revenue | 251,000 | 125,000 | ||||||||
Other Collaboration Agreements | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Research and development revenue | 68,000 | 500,000 | ||||||||
Other Collaboration Agreements | ETBs | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Research and development revenue | $ 500,000 | |||||||||
Contingent milestone payment upon delivery and acceptance of additional ETB materials | 250,000 | 250,000 | ||||||||
Takeda Pharmaceuticals Inc | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Aggregate Purchase Price | $ 20,000,000 | |||||||||
Takeda Pharmaceuticals Inc | Takeda Collaboration Agreement | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Payment for technology access fees and cost reimbursement | $ 2,000,000 | |||||||||
Research and development revenue | 11,000 | 1,300,000 | ||||||||
Takeda Pharmaceuticals Inc | Takeda Multi Target Agreement | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Research and development revenue | 152,000 | 0 | ||||||||
Upfront technology access fee | 1,000,000 | |||||||||
Additional contingent milestone payments upon designation of each of two targets | 2,000,000 | 2,000,000 | ||||||||
Accounts receivable from Takeda | 4,000,000 | 4,000,000 | $ 4,000 | |||||||
Aggregate milestone payments upon exercise of option to license ETBS | 25,000,000 | 25,000,000 | ||||||||
Additional preclinical, clinical development and commercialization milestone payments entitled to potentially receive | 547,000,000 | 547,000,000 | ||||||||
Contractual contingency fees | 10,000,000 | |||||||||
Proceeds from signing of stock purchase agreement | $ 20,000,000 | |||||||||
Aggregate Purchase Price | $ 20,000,000 | |||||||||
Cancer Prevention and Research Institute of Texas | ETB MT-3724 | Grant Agreements | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Product development grant awarded | $ 10,600,000 | |||||||||
Aggregate proceeds received from award granted | $ 9,500,000 | |||||||||
Cancer Prevention and Research Institute of Texas | ETB MT-3724 | Product Development Grant | Grant Agreements | ||||||||||
Research And Development Collaboration Agreements [Line Items] | ||||||||||
Grant revenue | $ 251,000 | $ 125,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - Concurrent Financing | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Longitude Venture Partners III, L..P. | |
Related Party Transaction [Line Items] | |
Ownership percentage of merger company | 15.30% |
Investments | $ 20,000,000 |
CDK Associates, L.L.C. | |
Related Party Transaction [Line Items] | |
Ownership percentage of merger company | 4.99% |
Investments | $ 7,000,000 |
Excel Venture Fund II, L.P. | |
Related Party Transaction [Line Items] | |
Investments | $ 333,000 |
Excel Venture Fund II, L.P. | Minimum | |
Related Party Transaction [Line Items] | |
Ownership percentage of merger company | 5.00% |
Marketable Securities and Fai42
Marketable Securities and Fair Value Measurements - Financial Assets at Fair Value on Recurring Basis (Detail) - Money Market Funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents and marketable securities | $ 48,830 | $ 51,751 |
Basis of Fair Value Measurements, Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents and marketable securities | 48,830 | 51,751 |
Basis of Fair Value Measurements, Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents and marketable securities | 0 | 0 |
Basis of Fair Value Measurements, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents and marketable securities | $ 0 | $ 0 |
Marketable Securities and Fai43
Marketable Securities and Fair Value Measurements - Summary of Company's Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cost Basis | $ 0 | $ 0 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | 0 | 0 |
Money Market Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost Basis | 48,830 | 51,751 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | 48,830 | 51,751 |
Less Cash Equivalents | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cost Basis | 48,830 | 51,751 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | $ 48,830 | $ 51,751 |
Marketable Securities and Fai44
Marketable Securities and Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Schedule Of Available For Sale Securities [Line Items] | |||
Realized gain or losses | $ 0 | $ 0 | |
Shares of common stock to be purchased with warrants | 3,521,735 | 3,331,735 | |
Long-term debt, carrying value | $ 3,000,000 | $ 3,500,000 | |
2017 Warrants | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Shares of common stock to be purchased with warrants | 377,273 | 377,273 |
Marketable Securities and Fai45
Marketable Securities and Fair Value Measurements - Financial Liabilities at Fair Value on Recurring Basis (Detail) - 2017 Warrants - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial liabilities | $ 340 | $ 954 |
Basis of Fair Value Measurements, Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 0 | 0 |
Basis of Fair Value Measurements, Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial liabilities | 0 | 0 |
Basis of Fair Value Measurements, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total financial liabilities | $ 340 | $ 954 |
Balance Sheet Components - Comp
Balance Sheet Components - Components of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Abstract] | ||
General and administrative | $ 670 | $ 374 |
Clinical costs | 734 | 702 |
Non-clinical research | 868 | 435 |
Payroll related | 491 | 1,149 |
Other accrued expenses | 37 | 30 |
Total accrued liabilities | $ 2,800 | $ 2,690 |
Balance Sheet Components - Co47
Balance Sheet Components - Components of Deferred Revenue (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $ 6,350 | $ 2,765 |
Grant Agreements | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 1,421 | 1,673 |
Research And Development Agreements | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $ 4,929 | $ 1,092 |
Borrowing Arrangements - Additi
Borrowing Arrangements - Additional Information - (Detail) - USD ($) | Feb. 27, 2018 | Mar. 31, 2018 | Apr. 30, 2016 | Jun. 30, 2015 | May 31, 2015 | Mar. 31, 2017 | Dec. 31, 2017 | Apr. 30, 2015 |
Perceptive | ||||||||
Debt Instrument [Line Items] | ||||||||
Final fee due at the loan maturity date | $ 3,400,000 | |||||||
Debt instrument, annual interest rate | 12.96% | |||||||
Term Loan Facility | Perceptive | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity under loan | $ 10,000,000 | |||||||
Common stock exercise price | $ 9.5792 | |||||||
Increase in applicable margin percentage on event of default | 4.00% | |||||||
Period for which interest only payments will be made | 24 months | |||||||
Credit Facility, principal payments | $ 200,000 | |||||||
Credit Facility, maturity date | Feb. 27, 2022 | |||||||
Exit fee | $ 100,000 | |||||||
Number of shares issued for each warrant | 190,000 | |||||||
Warrant exercisable period | 7 years | |||||||
LIBOR | Term Loan Facility | Perceptive | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 11.00% | |||||||
SVB Growth Capital Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity under loan | $ 6,000,000 | |||||||
Number of warrants to purchase shares of common stock | 17,310 | 14,254 | 48,874 | |||||
Final fee due at the loan maturity date | $ 375,000 | |||||||
Amount drew down from bank | $ 3,000,000 | $ 2,300,000 | $ 800,000 | |||||
Common stock exercise price | $ 3.07 | $ 3.07 | ||||||
Aggregate amount drawn down from credit facility | $ 6,000,000 | |||||||
Debt instrument, frequency of periodic payment | 30 | |||||||
Debt instrument first installment due date | Nov. 1, 2016 | |||||||
Debt instrument maturity date | Apr. 30, 2019 | |||||||
Debt instrument, annual interest rate | 5.44% | |||||||
Debt instrument principal paid during period | $ 3,200,000 | $ 600,000 | ||||||
Final fee paid | 375,000 | |||||||
Debt instrument interest paid during period | 42,000 | $ 66,000 | ||||||
Total debt | $ 0 | $ 3,500,000 | ||||||
SVB Growth Capital Loan | Prime Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.19% | |||||||
Term Loan Drawn on Effective Date of Credit Facility | Term Loan Facility | Perceptive | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from initial term loan on closing date of Credit Facility | $ 5,000,000 | |||||||
Additional Term Loan Drawn Six Months Following Effective Date of Credit Facility | Term Loan Facility | Perceptive | ||||||||
Debt Instrument [Line Items] | ||||||||
Remaining available amount from credit facility to be drawn six months following effective date of credit facility | $ 5,000,000 |
Borrowing Arrangements - Schedu
Borrowing Arrangements - Schedule of Required Future Principal Payments - (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Debt Instrument [Line Items] | |||
Total debt, net | $ 3,000 | $ 3,500 | |
SVB Growth Capital Loan | |||
Debt Instrument [Line Items] | |||
Total debt | 0 | $ 3,500 | |
SVB Growth Capital Loan | Perceptive Credit Facility | |||
Debt Instrument [Line Items] | |||
2018 (remaining) | 0 | ||
2,019 | 0 | ||
2,020 | 800 | ||
2,021 | 800 | ||
2,022 | 3,500 | ||
Total debt | 5,100 | ||
Debt discount and deferred finance costs | (2,101) | ||
Total debt, net | $ 2,999 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Facilities Operating Leases | |||
Other Commitments [Line Items] | |||
Operating lease expense | $ 340,000 | $ 77,000 | |
Laboratory Equipment | |||
Other Commitments [Line Items] | |||
Property and equipment, gross | 237,000 | $ 162,000 | |
Accumulated amortization | $ 83,000 | $ 75,000 |
Commitments and Contingencies51
Commitments and Contingencies - Future Minimum Payments Due under Operating Lease Agreements (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Leases [Abstract] | |
2018 (remaining) | $ 832 |
2,019 | 1,135 |
2,020 | 1,048 |
2,021 | 1,074 |
2,022 | 1,096 |
Thereafter | 486 |
Total | $ 5,671 |
Commitments and Contingencies52
Commitments and Contingencies - Schedule of Future Minimum Capital Lease Payments (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2018 (remaining) | $ 41 |
2,019 | 33 |
2,020 | 19 |
Total future minimum capital lease payments | 93 |
Less: amount representing interest | (7) |
Total capital lease obligations | 86 |
Current portion of lease obligations | (45) |
Capital lease obligations, non-current portion | $ 41 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Feb. 27, 2018 | Aug. 01, 2017 | Jun. 23, 2017 | Dec. 31, 2017 | Mar. 31, 2018 |
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 3,331,735 | 3,521,735 | |||
Term Loan Facility | Perceptive Credit Facility | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrant exercisable period | 7 years | ||||
Common stock exercise price | $ 9.5792 | ||||
Number of shares to be issued upon exercise of warrant | 190,000 | ||||
2017 Warrants | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 377,273 | 377,273 | |||
Common stock exercise price | $ 39.82 | ||||
Common Stock | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 3,500,000 | ||||
Common Stock | Term Loan Facility | Perceptive Credit Facility | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrant exercisable period | 7 years | ||||
Common stock exercise price | $ 9.58 | ||||
Valuation of equity classified warrants recorded in additional paid-n capital | $ 1,500,000 | ||||
Expected dividend rate | 0.00% | ||||
Expected volatility | 105.00% | ||||
Risk free interest rate | 2.83% | ||||
Expected term | 7 years | ||||
Number of shares to be issued upon exercise of warrant | 190,000 | ||||
Common Stock | 2017 Warrants | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 377,273 | ||||
Common stock exercise price | $ 39.82 | ||||
Change in fair value of common stock warrants | $ 614,000 | ||||
Wedbush Agreement | Common Stock | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 57,930 | 57,930 | |||
Warrant exercisable period | 7 years | ||||
Common stock exercise price | $ 6.8423 | ||||
Takeda Pharmaceuticals Inc | |||||
Class Of Warrant Or Right [Line Items] | |||||
Aggregate Purchase Price | $ 20,000,000 | ||||
Each unit of shares transaction of common stock | 2,922,993 | ||||
Purchase price per share | $ 6.84 | ||||
Wedbush Warrant Valuation | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 57,930 | ||||
Common stock exercise price | $ 6.84 | ||||
Valuation of equity classified warrants recorded in additional paid-n capital | $ 400,000 | ||||
Expected dividend rate | 0.00% | ||||
Expected volatility | 108.00% | ||||
Risk free interest rate | 2.33% | ||||
Expected term | 7 years | ||||
Private Placement | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 2,954,462 | 2,954,462 | |||
Common stock exercise price | $ 6.84 | ||||
Private Placement | Common Stock | |||||
Class Of Warrant Or Right [Line Items] | |||||
Warrants to purchase shares of common stock | 2,896,532 | ||||
Common stock exercise price | $ 6.84 | ||||
Valuation of equity classified warrants recorded in additional paid-n capital | $ 16,300,000 | ||||
Expected dividend rate | 0.00% | ||||
Expected volatility | 147.00% | ||||
Risk free interest rate | 2.07% | ||||
Expected term | 7 years | ||||
Private Placement | Longitude Venture Partners III, L..P. | |||||
Class Of Warrant Or Right [Line Items] | |||||
Number of aggregate units sold | 5,793,063 | ||||
Aggregate Purchase Price | $ 40,000,000 | ||||
Each unit of shares transaction of common stock | 1 | ||||
Warrants to purchase shares of common stock | 0.5 | 2,896,532 | |||
Sale of units, description and its composition | the Company sold an aggregate of 5,793,063 units (the “Units”) accredited investors having an aggregate purchase price of $40.0 million, each such Unit consisting of (i) one (1) share (the “Shares”) of our common stock and (ii) a warrant (the “Private Placement Warrants”) to purchase 0.5 shares of our common stock (the “Private Placement”). | ||||
Purchase price per unit | $ 6.9048 | ||||
Warrant exercisable period | 7 years | ||||
Common stock exercise price | $ 6.8423 |
Stockholders' Equity - Outstand
Stockholders' Equity - Outstanding Warrants to Purchase Shares of Common Stock (Detail) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | |
Warrants Outstanding, December 31, 2017 | 3,331,735 |
Issued | 190,000 |
Exercised | 0 |
Warrants Outstanding, March 31, 2018 | 3,521,735 |
2017 Private Placement Warrants | |
Class Of Warrant Or Right [Line Items] | |
Warrants Outstanding, December 31, 2017 | 2,954,462 |
Issued | 0 |
Exercised | 0 |
Warrants Outstanding, March 31, 2018 | 2,954,462 |
Weighted Average Exercise Price | $ / shares | $ 6.84 |
2017 Warrants | |
Class Of Warrant Or Right [Line Items] | |
Warrants Outstanding, December 31, 2017 | 377,273 |
Issued | 0 |
Exercised | 0 |
Warrants Outstanding, March 31, 2018 | 377,273 |
Weighted Average Exercise Price | $ / shares | $ 39.82 |
2018 Warrants | |
Class Of Warrant Or Right [Line Items] | |
Warrants Outstanding, December 31, 2017 | 0 |
Issued | 190,000 |
Exercised | 0 |
Warrants Outstanding, March 31, 2018 | 190,000 |
Weighted Average Exercise Price | $ / shares | $ 9.58 |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Warrant Liability Measured at Fair Value (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Change in fair value during the three months ended March 31, 2018 | $ 615 | $ (2) |
Basis of Fair Value Measurements, Level 3 | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | 954 | |
Change in fair value during the three months ended March 31, 2018 | (614) | |
Ending Balance | $ 340 |
Stockholders' Equity - Outsta56
Stockholders' Equity - Outstanding Warrants Valuation Assumption (Detail) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Risk-free interest rate | 2.27% | 1.89% |
Expected life (in years) | 1 year 10 months 20 days | 2 years 1 month 17 days |
Dividend yield | 0.00% | 0.00% |
Volatility | 89.00% | 103.00% |
Stock price | $ 8 | $ 10.02 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 643,000 | $ 26,000 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 180,000 | 0 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 463,000 | $ 26,000 |
Stock Based Compensation - Weig
Stock Based Compensation - Weighted-Average Fair Value Valuation Assumptions (Detail) - Employee Stock Options - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 2.68% | 1.95% |
Expected term (in years) | 6 years 7 days | 5 years |
Dividend yield | 0.00% | 0.00% |
Volatility | 108.00% | 76.00% |
Weighted-average fair value of stock options granted | $ 8.85 | $ 0.82 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Stock-based compensation expense | $ 643,000 | $ 26,000 |
Unrecognized compensation cost related to unvested stock-based awards granted to employees under the equity incentive plans | $ 9,200,000 | |
Unrecognized compensation cost related to unvested stock-based awards granted to employees under the equity incentive plans, period for recognition | 3 years 4 months 24 days | |
Total intrinsic value of stock options exercised | $ 1,600,000 | |
Cash received from stock option exercises | 148,000 | $ 0 |
Tax benefit realized upon exercise of option | $ 0 |
Stock Based Compensation - St60
Stock Based Compensation - Stock Option Activity Under Equity Incentive Plan (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Shares, Outstanding, Beginning Balance | 2,768,711 | |
Number of Shares, Granted | 297,750 | |
Number of Shares, Exercised | (161,705) | |
Number of Shares, Forfeitures | (24,995) | |
Number of Shares, Outstanding, Ending Balance | 2,879,761 | 2,768,711 |
Number of Shares, Exercisable | 1,470,533 | |
Weighted-Average Exercise Price, Outstanding, Beginning Balance | $ 12.07 | |
Weighted-Average Exercise Price, Granted | 10.69 | |
Weighted-Average Exercise Price, Exercised | 0.91 | |
Weighted-Average Exercise Price, Forfeitures | 31.47 | |
Weighted-Average Exercise Price, Outstanding, Ending Balance | 12.38 | $ 12.07 |
Weighted-Average Exercise Price, Exercisable | $ 15.89 | |
Weighted-Average Remaining Contractual Term, Outstanding | 6 years 2 months 12 days | 5 years 7 months 6 days |
Weighted-Average Remaining Contractual Term, Exercisable | 2 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding | $ 7.7 | $ 11 |
Aggregate Intrinsic Value, Exercisable | $ 6.6 |