Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 8-May-14 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'GTX INC /DE/ | ' |
Entity Central Index Key | '0001260990 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 75,161,437 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $22,432 | $14,529 |
Short-term investments | 5,345 | 200 |
Prepaid expenses and other current assets | 1,278 | 442 |
Total current assets | 29,055 | 15,171 |
Property and equipment, net | 86 | 112 |
Intangible and other assets, net | 652 | 322 |
Total assets | 29,793 | 15,605 |
Current liabilities: | ' | ' |
Accounts payable | 619 | 808 |
Accrued expenses and other current liabilities | 3,894 | 3,759 |
Total current liabilities | 4,513 | 4,567 |
Other long-term liabilities | 195 | 354 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value: 120,000,000 shares authorized at March 31, 2014 and December 31, 2013; 75,161,437 and 63,185,389 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 75 | 63 |
Additional paid-in capital | 489,357 | 465,981 |
Accumulated deficit | -464,347 | -455,360 |
Total stockholders' equity | 25,085 | 10,684 |
Total liabilities and stockholders' equity | $29,793 | $15,605 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
CONDENSED BALANCE SHEETS | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 75,161,437 | 63,185,389 |
Common stock, shares outstanding | 75,161,437 | 63,185,389 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Expenses: | ' | ' |
Research and development expenses | $6,360 | $9,614 |
General and administrative expenses | 2,629 | 3,023 |
Total expenses | 8,989 | 12,637 |
Loss from operations | -8,989 | -12,637 |
Other income, net | 2 | 55 |
Net loss | ($8,987) | ($12,582) |
Net loss per share: | ' | ' |
Basic and diluted (in dollars per share) | ($0.14) | ($0.20) |
Weighted average shares outstanding: | ' | ' |
Basic and diluted (in shares) | 66,512,069 | 62,864,140 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($8,987) | ($12,582) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 33 | 150 |
Share-based compensation | 2,215 | 814 |
Directors' deferred compensation | 32 | 42 |
Changes in assets and liabilities: | ' | ' |
Prepaid expenses and other assets | -1,169 | -913 |
Accounts payable | -189 | -607 |
Accrued expenses and other liabilities | -22 | -827 |
Net cash used in operating activities | -8,087 | -13,923 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -4 | -29 |
Purchase of short-term investments, held to maturity | -5,145 | -1,225 |
Proceeds from maturities of short-term investments, held to maturity | ' | 3,185 |
Net cash (used in) provided by investing activities | -5,149 | 1,931 |
Cash flows from financing activities: | ' | ' |
Net proceeds from the issuance of common stock and warrants | 21,141 | ' |
Payments on capital lease and financed equipment obligations | -2 | -2 |
Proceeds from exercise of employee stock options | ' | 86 |
Net cash provided by financing activities | 21,139 | 84 |
Net increase (decrease) in cash and cash equivalents | 7,903 | -11,908 |
Cash and cash equivalents, beginning of period | 14,529 | 48,044 |
Cash and cash equivalents, end of period | $22,432 | $36,136 |
Business_and_Basis_of_Presenta
Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Business and Basis of Presentation | ' |
Business and Basis of Presentation | ' |
1. Business and Basis of Presentation | |
Business | |
GTx, Inc. (“GTx” or the “Company”), a Delaware corporation incorporated on September 24, 1997 and headquartered in Memphis, Tennessee, is a biopharmaceutical company dedicated to the discovery, development and commercialization of small molecules for the treatment of cancer, including treatments for prostate and breast cancer, cancer supportive care, including prevention and treatment of cancer-related muscle wasting, and other serious medical conditions. | |
The Company is developing selective androgen receptor modulators (“SARMs”), including its lead product candidate, enobosarm (GTx-024). SARMs are a new class of drugs with the potential to prevent and treat muscle wasting in patients with cancer and other musculoskeletal wasting or muscle loss conditions, including chronic sarcopenia (age related muscle loss), as well as the potential to be used as a novel hormonal therapy for the treatment of metastatic breast cancer. The Company announced in August 2013 that its POWER 1 (platinum plus taxane chemotherapy) and POWER 2 (platinum plus non-taxane chemotherapy) Phase 3 clinical trials evaluating enobosarm 3 mg for the prevention and treatment of muscle wasting in patients with advanced non-small cell lung cancer (“NSCLC”) failed to meet the primary statistical criterion for the co-primary endpoints of lean body mass and physical function that were assessed statistically using responder analyses as pre-specified for the United States Food and Drug Administration (“FDA”). The Company met with representatives from two member countries to the European Medicines Agency (“EMA”) in January 2014 to review and discuss the results of the POWER trials to determine an appropriate path forward for submitting a marketing authorization application (“MAA”) in the European Union (“EU”) for enobosarm 3 mg for the prevention and treatment of muscle wasting in patients with advanced NSCLC. Based on input from the two member countries, the Company believes data from the POWER 1 trial, as well as supporting data from the POWER 2 trial, may be sufficient to support the submission of a MAA to the EMA seeking marketing authorization for enobosarm 3 mg in the more narrow indication of the prevention and treatment of muscle wasting in patients with advanced NSCLC treated with platinum plus taxane chemotherapy. The Company has initiated seven Phase 1 clinical studies that are typically required for submission purposes and have submitted a pediatric investigational plan, or PIP, to the EMA, which is necessary for submission of a MAA. The Company has retained experts in both the United States and the EU to work with its internal team to explore the option of submitting a MAA for enobosarm 3 mg for the prevention and treatment of muscle wasting in patients with advanced NSCLC treated with platinum plus taxane chemotherapy, after completion of the Phase 1 studies and acceptance of the PIP by the EMA’s Pediatric Committee. In the Company’s meeting with the FDA in February 2014 to review and discuss the results of the POWER clinical trials, the Company learned that since data from the two POWER trials failed to meet the primary statistical criterion pre-specified for the co-primary endpoints of lean body mass and physical function, the FDA was not willing to accept a new drug application (“NDA”) for enobosarm 3 mg. The Company is evaluating options for further development of enobosarm 3 mg. Any further development would be subject to the Company’s ability to obtain additional funding and would be required to be successfully completed prior to any NDA submission to the FDA for enobosarm 3 mg. | |
The Company is conducting a Phase 2 open label study evaluating enobosarm 9 mg for the treatment of androgen receptor positive and estrogen receptor positive metastatic breast cancer in women who have previously responded to hormonal therapy for the treatment of their metastatic breast cancer. Additionally, the Company is developing GTx-758 (Capesaris®), an oral nonsteroidal selective estrogen receptor alpha agonist, for secondary hormonal therapy in men with castration resistant prostate cancer, and, potentially, as a secondary hormonal treatment for advanced prostate cancer used in combination with androgen deprivation therapy. The Company is presently conducting a Phase 2 clinical trial evaluating GTx-758 as secondary hormonal therapy in men with metastatic and non-metastatic castration resistant prostate cancer. | |
The Company has experienced significant recurring operating losses since its inception and has limited funds. The Company expects that its current cash resources, together with interest income thereon, will be sufficient to fund the completion of its ongoing Phase 2 clinical trials of enobosarm 9 mg and GTx-758, the completion of its Phase 1 clinical studies of enobosarm 3 mg and the continuation of activities required for the potential submission of a MAA to the EMA for enobosarm 3 mg for the prevention and treatment of muscle wasting in patients with advanced NSCLC treated with platinum plus taxane chemotherapy. However, the Company will need to raise substantial additional capital in the near term to complete the activities that would be required to submit a MAA and to sustain its operations through and beyond the second quarter of 2015. | |
Basis ofPresentation | |
The accompanying unaudited condensed financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of GTx’s financial position, results of operations and cash flows for each period presented in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted from the accompanying condensed financial statements. These interim condensed financial statements should be read in conjunction with the audited financial statements and related notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2014. | |
Use of Estimates | |
The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts and results could differ from those estimates. | |
Research and Development Expenses | |
Research and development expenses include, but are not limited to, the Company’s expenses for personnel, supplies, and facilities associated with research activities, screening and identification of product candidates, formulation and synthesis activities, manufacturing, preclinical studies, toxicology studies, clinical trials, regulatory and medical affairs activities, quality assurance activities and license fees. The Company expenses these costs in the period in which they are incurred. The Company estimates its liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon the Company’s estimate of services received and degree of completion of the services in accordance with the specific third party contract. As a result of the October 2013 reduction in its workforce, the Company is no longer conducting drug discovery activities and is focusing its research and development activities on the ongoing clinical development of the Company’s current product candidates. | |
Cash, Cash Equivalents and Short-term Investments | |
The Company considers highly liquid investments with initial maturities of three months or less to be cash equivalents. | |
At March 31, 2014 and December 31, 2013, short-term investments consisted of Federal Deposit Insurance Corporation insured certificates of deposit with original maturities of greater than three months and less than one year. As the Company has the positive intent and ability to hold the certificates of deposit until maturity, these investments have been classified as held to maturity investments and are stated at cost, which approximates fair value. The Company considers these to be Level 2 investments as the fair values of these investments are determined using third-party pricing sources, which generally utilize observable inputs, such as interest rates and maturities of similar assets. | |
Income Taxes | |
The Company accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, at March 31, 2014 and December 31, 2013, net of the valuation allowance, the net deferred tax assets were reduced to zero. Income taxes are described more fully in Note 9 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
Other Income, net | |
Other income, net consists of foreign currency transaction gains and losses associated with conducting clinical trials in foreign countries, interest earned on the Company’s cash, cash equivalents and short-term investments, interest expense, and other non-operating income or expense. | |
FARESTON® Revenue Recognition | |
Although the Company sold its rights and certain assets related to FARESTON® effective September 30, 2012, the Company retained the liability for future product returns relating to sales of FARESTON® made by the Company prior to September 30, 2012. Therefore, the Company estimates an accrual for product returns based on factors which include historical product returns and estimated product in the distribution channel which is expected to exceed its expiration date. At March 31, 2014 and December 31, 2013, the Company’s accrual for product returns, was $454 and $918, respectively. Of these amounts, $189 and $332 have been included in “Other long-term liabilities” in the condensed balance sheet at March 31, 2014 and December 31, 2013, respectively, and represents the portion of the Company’s product returns accrual estimated to be payable after one year. The accrual for product returns decreased during the current period due to the closure of the return period for a portion of the previously sold inventory. | |
Subsequent Events | |
The Company has evaluated all events or transactions that occurred after March 31, 2014 up through the date the condensed financial statements were issued. Other than as set forth below, there were no material recognizable or nonrecognizable subsequent events during the period evaluated. | |
In April 2014, the Company announced that Mitchell S. Steiner, M.D., the Company’s Vice Chairman and Chief Executive Officer and a co-founder of the Company, was leaving the Company to pursue other business interests. Dr. Steiner resigned from his roles as Chief Executive Officer and Vice Chairman of the Board of Directors at the Company, and as a member of the Board of Directors, effective April 3, 2014. In connection with Dr. Steiner’s resignation, Marc S. Hanover was appointed as the Company’s interim Chief Executive Officer and was elected to the Board to serve the remainder of Dr. Steiner’s term on the Board until the annual meeting of GTx shareholders in 2015. Also in connection with Dr. Steiner’s resignation, the Company entered into a severance agreement with Dr. Steiner, pursuant to which Dr. Steiner received severance benefits of (i) twelve months of base salary continuation payments, which totals $452; (ii) a payout of accrued vacation of $12; and (iii) continued healthcare coverage through the earliest to occur of (a) December 2014, (b) the date he becomes eligible for group health insurance coverage through a new employer or (c) the date Dr. Steiner ceases to be eligible for COBRA continuation coverage, which is estimated to cost the Company $19. As a result of these severance benefits, the Company will recognize cash severance related expenses of $483 during the second quarter of 2014. Additionally, all of Dr. Steiner’s outstanding unvested stock options were vested and became immediately exercisable on April 13, 2014. The Company extended the post-termination exercise period of all of his stock options until the earlier to occur of (i) April 13, 2019 or (ii) the expiration of the term of a particular stock option grant. As a result of the modification of Dr. Steiner’s options, the Company will recognize a one-time, noncash net compensation expense of $215 during the second quarter of 2014, which reflects the aggregate incremental fair value associated with the modifications of $359, partially offset by the reversal of $144 of previously recognized share-based compensation expense for Dr. Steiner’s unvested options. | |
In connection with Mr. Hanover’s appointment as the Company’s interim Chief Executive Officer, the Board approved the grant of a stock option under its 2013 Equity Incentive Plan (“2013 EIP”) to purchase 500,000 shares of common stock. In accordance with the terms of the 2013 EIP, the option was granted at a price equal to the fair market value of the stock on the date of grant and has a term of ten years from the date of grant and vests in five equal annual installments. All of Mr. Hanover’s previously granted options and a portion of the options granted on April 3, 2014 are subject to accelerated vesting if Mr. Hanover is involuntarily terminated or resigns due to a material demotion, as defined in the amended employment agreement between Mr. Hanover and the Company, within six months of a new Chief Executive Officer becoming employed by the Company. Additionally, if either of these events were to occur, the post-termination exercise period for all of his outstanding vested stock options would be extended until the earlier of (i) five years from his date of termination or resignation on account of a material demotion or (ii) the expiration of the term of a particular stock option grant in accordance with the terms of his amended employment agreement. | |
On May 7, 2014, the Company filed a Certificate of Amendment to the Company’s Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s common stock, par value $0.001 per share, from 120,000,000 shares to 200,000,000 shares. The foregoing amendment was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders held on May 6, 2014. | |
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Share-Based Compensation | ' | |||||||
Share-Based Compensation | ' | |||||||
2. Share-Based Compensation | ||||||||
Share-based payments include stock option grants and restricted stock units (“RSU’s”) under the Company’s stock option and equity incentive plans and deferred compensation arrangements for the Company’s non-employee directors. The Company recognizes compensation expense for its share-based payments based on the fair value of the awards over the period during which an employee or non-employee director is required to provide service in exchange for the award. The Company’s share-based compensation plans are described more fully in Note 3 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||||||
The following table summarizes share-based compensation expense included within the condensed statements of operations for the three months ended March 31, 2014 and 2013: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Research and development expenses | $ | 1,380 | $ | 342 | ||||
General and administrative expenses | 867 | 514 | ||||||
Total share-based compensation | $ | 2,247 | $ | 856 | ||||
Share-based compensation expense recorded as general and administrative expense for the three months ended March 31, 2014 and 2013 included share-based compensation expense related to deferred compensation arrangements for the Company’s non-employee directors of $32 and $42, respectively. | ||||||||
The Company uses the Black-Scholes-Merton option pricing valuation model (“Black-Scholes Model”) to value stock options. The expected life of options is determined by calculating the average of the vesting term and the contractual term of the options. The expected price volatility is based on the Company’s historical stock price volatility. The risk-free interest rate is determined using U.S. Treasury rates where the term is consistent with the expected life of the stock options. Expected dividend yield is not considered as the Company has not made any dividend payments and has no plans of doing so in the foreseeable future. The amount of share-based compensation expense recognized is reduced ratably over the vesting period by an estimate of the percentage of options granted that are expected to be forfeited or canceled before becoming fully vested. | ||||||||
The Company estimates the fair value of RSUs using the closing price of its stock on the grant date. The fair value of RSUs is amortized on a straight-line basis over the requisite service period of the awards. | ||||||||
The fair value of options granted was estimated using the following assumptions for the periods presented: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Expected price volatility | 87.9 | % | 74.4 | % | ||||
Risk-free interest rate | 2.3 | % | 1.1 | % | ||||
Weighted average expected life in years | 6.5 years | 6.5 years | ||||||
The following is a summary of stock option transactions for all of the Company’s stock option and equity incentive plans since the Company’s most recent fiscal year end: | ||||||||
Number of Shares | Weighted Average | |||||||
Exercise Price Per | ||||||||
Share | ||||||||
Options outstanding at December 31, 2013 | 6,445,342 | $ | 6.58 | |||||
Options granted | 2,000 | 1.74 | ||||||
Options forfeited or expired | (231,533 | ) | 11.85 | |||||
Options exercised | — | — | ||||||
Options outstanding at March 31, 2014 | 6,215,809 | 6.38 | ||||||
At March 31, 2014 and December 31, 2013, the Company had 1,225,000 unvested RSUs with a weighted average grant date fair value per share of $1.87. | ||||||||
Basic_and_Diluted_Net_Loss_Per
Basic and Diluted Net Loss Per Share | 3 Months Ended |
Mar. 31, 2014 | |
Basic and Diluted Net Loss Per Share | ' |
Basic and Diluted Net Loss Per Share | ' |
3. Basic and Diluted Net Loss Per Share | |
Basic and diluted net loss per share attributable to common stockholders is calculated based on the weighted average number of common shares outstanding during the period. Diluted net loss per share gives effect to the dilutive potential of common stock consisting of stock options, unvested restricted stock units and common stock warrants. | |
Weighted average potential shares of common stock of 10,382,571 and 6,680,423 for the three months ended March 31, 2014 and 2013, respectively, were excluded from the calculations of diluted loss per share as inclusion of the potential shares would have had an anti-dilutive effect on the net loss per share for the periods. | |
Common_Stock
Common Stock | 3 Months Ended |
Mar. 31, 2014 | |
Common Stock | ' |
Common Stock | ' |
4. Common Stock | |
On March 6, 2014, the Company completed a private placement of units consisting of an aggregate of 11,976,048 shares of common stock and warrants to purchase an aggregate of 10,179,642 shares of its common stock per unit for gross proceeds of $21,272. Pursuant to the terms of a registration rights agreement dated March 6, 2014 that the Company entered into with the investors, the Company agreed to file a registration statement under the Securities Act registering the resale of all 22,155,690 shares held by or issuable to the investors. No underwriting discounts or commissions or similar fees were payable in connection with the issuance. | |
The warrants, which have a one year term expiring on March 6, 2015, have a per share exercise price of $1.67 that is payable only in cash. The Company assessed whether the warrants require accounting as derivatives. The Company determined that the warrants were indexed to the Company’s own stock. As such, the Company has concluded the warrants meet the scope exception for determining whether the instruments require accounting as derivatives and are classified in stockholders’ equity. The fair value of the warrants was estimated at $4,478 using the Black-Scholes Model with the following assumptions: expected volatility of 67%, risk free interest rate of 0.12%, expected life of one year and no dividends. The proceeds of the sale of the private placement were allocated to the common stock and warrants based upon their relative fair values. | |
University_of_Tennessee_Resear
University of Tennessee Research Foundation License Agreement | 3 Months Ended |
Mar. 31, 2014 | |
University of Tennessee Research Foundation License Agreement | ' |
University of Tennessee Research Foundation License Agreement | ' |
5. University of Tennessee Research Foundation License Agreement | |
The Company and the University of Tennessee Research Foundation (“UTRF”) are parties to a consolidated, amended and restated license agreement (the “SARM License Agreement”) pursuant to which the Company was granted exclusive worldwide rights in all existing SARM technologies owned or controlled by UTRF, including all improvements thereto, and exclusive rights to future SARM technology that may be developed by certain scientists at the University of Tennessee or subsequently licensed to UTRF under certain existing inter-institutional agreements with The Ohio State University. Under the SARM License Agreement, the Company is obligated to pay UTRF annual license maintenance fees, low single-digit royalties on net sales of products and mid-single-digit royalties on sublicense revenues. |
Business_and_Basis_of_Presenta1
Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Business and Basis of Presentation | ' |
Basis of Presentation | ' |
Basis ofPresentation | |
The accompanying unaudited condensed financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of GTx’s financial position, results of operations and cash flows for each period presented in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted from the accompanying condensed financial statements. These interim condensed financial statements should be read in conjunction with the audited financial statements and related notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2014. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts and results could differ from those estimates. | |
Research and Development Expenses | ' |
Research and Development Expenses | |
Research and development expenses include, but are not limited to, the Company’s expenses for personnel, supplies, and facilities associated with research activities, screening and identification of product candidates, formulation and synthesis activities, manufacturing, preclinical studies, toxicology studies, clinical trials, regulatory and medical affairs activities, quality assurance activities and license fees. The Company expenses these costs in the period in which they are incurred. The Company estimates its liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon the Company’s estimate of services received and degree of completion of the services in accordance with the specific third party contract. As a result of the October 2013 reduction in its workforce, the Company is no longer conducting drug discovery activities and is focusing its research and development activities on the ongoing clinical development of the Company’s current product candidates. | |
Cash, Cash Equivalents and Short-term Investments | ' |
Cash, Cash Equivalents and Short-term Investments | |
The Company considers highly liquid investments with initial maturities of three months or less to be cash equivalents. | |
At March 31, 2014 and December 31, 2013, short-term investments consisted of Federal Deposit Insurance Corporation insured certificates of deposit with original maturities of greater than three months and less than one year. As the Company has the positive intent and ability to hold the certificates of deposit until maturity, these investments have been classified as held to maturity investments and are stated at cost, which approximates fair value. The Company considers these to be Level 2 investments as the fair values of these investments are determined using third-party pricing sources, which generally utilize observable inputs, such as interest rates and maturities of similar assets. | |
Income Taxes | ' |
Income Taxes | |
The Company accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, at March 31, 2014 and December 31, 2013, net of the valuation allowance, the net deferred tax assets were reduced to zero. Income taxes are described more fully in Note 9 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
Other Income, net | ' |
Other Income, net | |
Other income, net consists of foreign currency transaction gains and losses associated with conducting clinical trials in foreign countries, interest earned on the Company’s cash, cash equivalents and short-term investments, interest expense, and other non-operating income or expense. | |
FARESTON Revenue Recognition | ' |
FARESTON® Revenue Recognition | |
Although the Company sold its rights and certain assets related to FARESTON® effective September 30, 2012, the Company retained the liability for future product returns relating to sales of FARESTON® made by the Company prior to September 30, 2012. Therefore, the Company estimates an accrual for product returns based on factors which include historical product returns and estimated product in the distribution channel which is expected to exceed its expiration date. At March 31, 2014 and December 31, 2013, the Company’s accrual for product returns, was $454 and $918, respectively. Of these amounts, $189 and $332 have been included in “Other long-term liabilities” in the condensed balance sheet at March 31, 2014 and December 31, 2013, respectively, and represents the portion of the Company’s product returns accrual estimated to be payable after one year. The accrual for product returns decreased during the current period due to the closure of the return period for a portion of the previously sold inventory. | |
Subsequent Events | ' |
Subsequent Events | |
The Company has evaluated all events or transactions that occurred after March 31, 2014 up through the date the condensed financial statements were issued. Other than as set forth below, there were no material recognizable or nonrecognizable subsequent events during the period evaluated. | |
In April 2014, the Company announced that Mitchell S. Steiner, M.D., the Company’s Vice Chairman and Chief Executive Officer and a co-founder of the Company, was leaving the Company to pursue other business interests. Dr. Steiner resigned from his roles as Chief Executive Officer and Vice Chairman of the Board of Directors at the Company, and as a member of the Board of Directors, effective April 3, 2014. In connection with Dr. Steiner’s resignation, Marc S. Hanover was appointed as the Company’s interim Chief Executive Officer and was elected to the Board to serve the remainder of Dr. Steiner’s term on the Board until the annual meeting of GTx shareholders in 2015. Also in connection with Dr. Steiner’s resignation, the Company entered into a severance agreement with Dr. Steiner, pursuant to which Dr. Steiner received severance benefits of (i) twelve months of base salary continuation payments, which totals $452; (ii) a payout of accrued vacation of $12; and (iii) continued healthcare coverage through the earliest to occur of (a) December 2014, (b) the date he becomes eligible for group health insurance coverage through a new employer or (c) the date Dr. Steiner ceases to be eligible for COBRA continuation coverage, which is estimated to cost the Company $19. As a result of these severance benefits, the Company will recognize cash severance related expenses of $483 during the second quarter of 2014. Additionally, all of Dr. Steiner’s outstanding unvested stock options were vested and became immediately exercisable on April 13, 2014. The Company extended the post-termination exercise period of all of his stock options until the earlier to occur of (i) April 13, 2019 or (ii) the expiration of the term of a particular stock option grant. As a result of the modification of Dr. Steiner’s options, the Company will recognize a one-time, noncash net compensation expense of $215 during the second quarter of 2014, which reflects the aggregate incremental fair value associated with the modifications of $359, partially offset by the reversal of $144 of previously recognized share-based compensation expense for Dr. Steiner’s unvested options. | |
In connection with Mr. Hanover’s appointment as the Company’s interim Chief Executive Officer, the Board approved the grant of a stock option under its 2013 Equity Incentive Plan (“2013 EIP”) to purchase 500,000 shares of common stock. In accordance with the terms of the 2013 EIP, the option was granted at a price equal to the fair market value of the stock on the date of grant and has a term of ten years from the date of grant and vests in five equal annual installments. All of Mr. Hanover’s previously granted options and a portion of the options granted on April 3, 2014 are subject to accelerated vesting if Mr. Hanover is involuntarily terminated or resigns due to a material demotion, as defined in the amended employment agreement between Mr. Hanover and the Company, within six months of a new Chief Executive Officer becoming employed by the Company. Additionally, if either of these events were to occur, the post-termination exercise period for all of his outstanding vested stock options would be extended until the earlier of (i) five years from his date of termination or resignation on account of a material demotion or (ii) the expiration of the term of a particular stock option grant in accordance with the terms of his amended employment agreement. | |
On May 7, 2014, the Company filed a Certificate of Amendment to the Company’s Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s common stock, par value $0.001 per share, from 120,000,000 shares to 200,000,000 shares. The foregoing amendment was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders held on May 6, 2014. | |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Share-Based Compensation | ' | |||||||
Summary of share-based compensation expense | ' | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Research and development expenses | $ | 1,380 | $ | 342 | ||||
General and administrative expenses | 867 | 514 | ||||||
Total share-based compensation | $ | 2,247 | $ | 856 | ||||
Schedule of assumptions used to estimate fair value of options | ' | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Expected price volatility | 87.9 | % | 74.4 | % | ||||
Risk-free interest rate | 2.3 | % | 1.1 | % | ||||
Weighted average expected life in years | 6.5 years | 6.5 years | ||||||
Summary of stock option transactions | ' | |||||||
Number of Shares | Weighted Average | |||||||
Exercise Price Per | ||||||||
Share | ||||||||
Options outstanding at December 31, 2013 | 6,445,342 | $ | 6.58 | |||||
Options granted | 2,000 | 1.74 | ||||||
Options forfeited or expired | (231,533 | ) | 11.85 | |||||
Options exercised | — | — | ||||||
Options outstanding at March 31, 2014 | 6,215,809 | 6.38 | ||||||
Business_and_Basis_of_Presenta2
Business and Basis of Presentation (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | 7-May-14 | Apr. 03, 2014 | Jun. 30, 2014 | Apr. 03, 2014 |
Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||
Mitchell S. Steiner | Mitchell S. Steiner | Marc S. Hanover | ||||
M | 2013 EIP | |||||
item | ||||||
Income Taxes | ' | ' | ' | ' | ' | ' |
Net deferred tax assets | $0 | $0 | ' | ' | ' | ' |
FARESTON Revenue Recognition | ' | ' | ' | ' | ' | ' |
Accrual for product returns | 454 | 918 | ' | ' | ' | ' |
Accrual for product returns included in other long term liabilities | 189 | 332 | ' | ' | ' | ' |
Subsequent event | ' | ' | ' | ' | ' | ' |
Number of months of base salary paid in the form of severance benefits | ' | ' | ' | 12 | ' | ' |
Aggregate amount of base salary paid in the form of severance benefits | ' | ' | ' | 452 | ' | ' |
Payout of accrued vacation | ' | ' | ' | 12 | ' | ' |
Estimated cost of continued healthcare coverage | ' | ' | ' | 19 | ' | ' |
Total cash severance related expenses | ' | ' | ' | ' | 483 | ' |
One-time, noncash net compensation expense related to the modification of stock options | ' | ' | ' | ' | 215 | ' |
Aggregate incremental fair value associated with the modifications of stock options | ' | ' | ' | ' | 359 | ' |
Amount of previously recognized share-based compensation expense for unvested options reversed | ' | ' | ' | ' | $144 | ' |
Options granted (in shares) | 2,000 | ' | ' | ' | ' | 500,000 |
Option term | ' | ' | ' | ' | ' | '10 years |
Number of equal annual installments for vesting of stock options | ' | ' | ' | ' | ' | 5 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 | ' | ' | ' |
Common stock, shares authorized | 120,000,000 | 120,000,000 | 200,000,000 | ' | ' | ' |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Share-based compensation expense | ' | ' |
Total share-based compensation | $2,247 | $856 |
Share-based compensation expense related to deferred compensation arrangements for non-employee directors | 32 | 42 |
Research and development expenses | ' | ' |
Share-based compensation expense | ' | ' |
Total share-based compensation | 1,380 | 342 |
General and administrative expenses | ' | ' |
Share-based compensation expense | ' | ' |
Total share-based compensation | 867 | 514 |
Non-employee Directors | General and administrative expenses | ' | ' |
Share-based compensation expense | ' | ' |
Share-based compensation expense related to deferred compensation arrangements for non-employee directors | $32 | $42 |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Fair value of options granted | ' | ' |
Expected price volatility (as a percent) | 87.90% | 74.40% |
Risk-free interest rate (as a percent) | 2.30% | 1.10% |
Weighted average expected life in years | '6 years 6 months | '6 years 6 months |
Number of Shares | ' | ' |
Options outstanding at the beginning of the period (in shares) | 6,445,342 | ' |
Options granted (in shares) | 2,000 | ' |
Options forfeited or expired (in shares) | -231,533 | ' |
Options outstanding at the end of the period (in shares) | 6,215,809 | ' |
Weighted Average Exercise Price Per Share | ' | ' |
Options outstanding at the beginning of the period (in dollars per share) | $6.58 | ' |
Options granted (in dollars per share) | $1.74 | ' |
Options forfeited or expired (in dollars per share) | $11.85 | ' |
Options outstanding at the end of the period (in dollars per share) | $6.38 | ' |
ShareBased_Compensation_Detail2
Share-Based Compensation (Details 3) (Restricted stock units, USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Restricted stock units | ' | ' |
Number of Shares | ' | ' |
Unvested awards (in shares) | 1,225,000 | 1,225,000 |
Weighted Average Grant Date Fair Value Per Share | ' | ' |
Weighted average grant date fair value per share (in dollars per share) | $1.87 | $1.87 |
Basic_and_Diluted_Net_Loss_Per1
Basic and Diluted Net Loss Per Share (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Basic and Diluted Net Loss Per Share | ' | ' |
Weighted average potential shares of common stock excluded from calculation of diluted net income (loss) per share | 10,382,571 | 6,680,423 |
Common_Stock_Details
Common Stock (Details) (Private placement, USD $) | 0 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 06, 2014 |
Private placement | ' |
Common Stock | ' |
Stock issued under private placement (in shares) | 11,976,048 |
Warrants issued to purchase shares under private placement | 10,179,642 |
Gross proceeds from issuance of stock (in dollars) | $21,272 |
Number of shares to be registered by a registration statement under Securities Act | 22,155,690 |
Warrant term | '1 year |
Per share exercise price payable in cash (in dollars) | $1.67 |
Estimated fair value of warrants | $4,478 |
Expected volatility of warrants (as a percent) | 67.00% |
Risk free interest rate of warrants (as a percent) | 0.12% |
Expected life of warrants | '1 year |
Dividend rate of warrants (as a percent) | 0.00% |