Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 06, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'GTX INC /DE/ | ' |
Entity Central Index Key | '0001260990 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-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 | ' | 76,014,531 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $9,627 | $14,529 |
Short-term investments | 1,915 | 200 |
Prepaid expenses and other current assets | 919 | 442 |
Total current assets | 12,461 | 15,171 |
Property and equipment, net | 42 | 112 |
Intangible and other assets, net | 513 | 322 |
Total assets | 13,016 | 15,605 |
Current liabilities: | ' | ' |
Accounts payable | 179 | 808 |
Accrued expenses and other current liabilities | 2,139 | 3,759 |
Total current liabilities | 2,318 | 4,567 |
Other long-term liabilities | 82 | 354 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value: 200,000,000 and 120,000,000 shares authorized at September 30, 2014 and December 31, 2013 respectively; 76,014,531 and 63,185,389 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 76 | 63 |
Additional paid-in capital | 490,766 | 465,981 |
Accumulated deficit | -480,226 | -455,360 |
Total stockholders' equity | 10,616 | 10,684 |
Total liabilities and stockholders' equity | $13,016 | $15,605 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CONDENSED BALANCE SHEETS | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 120,000,000 |
Common stock, shares issued | 76,014,531 | 63,185,389 |
Common stock, shares outstanding | 76,014,531 | 63,185,389 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Expenses: | ' | ' | ' | ' |
Research and development expenses | $3,362 | $6,477 | $17,616 | $26,230 |
General and administrative expenses | 1,594 | 2,483 | 7,275 | 8,190 |
Total expenses | 4,956 | 8,960 | 24,891 | 34,420 |
Loss from operations | -4,956 | -8,960 | -24,891 | -34,420 |
Other income, net | 21 | 23 | 25 | 99 |
Net loss | ($4,935) | ($8,937) | ($24,866) | ($34,321) |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.06) | ($0.14) | ($0.34) | ($0.54) |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic and diluted (in shares) | 76,014,531 | 63,179,394 | 72,688,108 | 63,013,923 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($24,866) | ($34,321) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 86 | 333 |
Share-based compensation | 4,186 | 2,227 |
Directors' deferred compensation | 94 | 105 |
Changes in assets and liabilities: | ' | ' |
Prepaid expenses and other assets | -679 | -150 |
Accounts payable | -629 | -454 |
Accrued expenses and other liabilities | -1,890 | -4,060 |
Net cash used in operating activities | -23,698 | -36,320 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -5 | -32 |
Purchase of short-term investments, held to maturity | -10,490 | -1,225 |
Proceeds from maturities of short-term investments, held to maturity | 8,775 | 7,595 |
Net cash (used in) provided by investing activities | -1,720 | 6,338 |
Cash flows from financing activities: | ' | ' |
Net proceeds from the issuance of common stock and warrants | 21,135 | ' |
Tax payments related to shares withheld for vested restricted stock units | -617 | ' |
Payments on capital lease and financed equipment obligations | -2 | -5 |
Proceeds from exercise of employee stock options | ' | 1,226 |
Net cash provided by financing activities | 20,516 | 1,221 |
Net decrease in cash and cash equivalents | -4,902 | -28,761 |
Cash and cash equivalents, beginning of period | 14,529 | 48,044 |
Cash and cash equivalents, end of period | $9,627 | $19,283 |
Business_and_Basis_of_Presenta
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 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 breast and prostate 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 that the Company believes have the potential to be used as a novel hormonal therapy for the treatment of advanced breast cancer, as well as the potential to prevent and treat muscle wasting in patients with cancer and other musculoskeletal wasting or muscle loss conditions. The Company announced during the second quarter of 2014 positive preliminary results from an ongoing Phase 2 proof-of-concept, open-label clinical trial evaluating a 9 mg oral daily dose of enobosarm for the treatment of patients with estrogen receptor (“ER”) positive and androgen receptor (“AR”) positive metastatic breast cancer who have previously responded to hormonal therapy. The Company’s current strategy is focused on further development of enobosarm in two breast cancer indications targeting the androgen receptor. Subject to the completion of the private placement of its common stock and warrants that the Company announced on November 10, 2014 and the receipt of necessary regulatory approvals, it plans to initiate two Phase 2 clinical trials for these indications in the first half of 2015. One of these Phase 2 clinical trials is designed to enroll patients with ER positive and AR positive metastatic breast cancer, while the other Phase 2 clinical trial is designed to enroll patients with advanced AR positive triple-negative 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 daily for the prevention and treatment of muscle wasting in patients with advanced non-small cell lung cancer (“NSCLC”) failed to meet the statistical criterion for the co-primary endpoints of lean body mass and physical function that were assessed using responder analyses as pre-specified for the United States Food and Drug Administration (“FDA”). Enobosarm did, however, demonstrate a statistically significant effect versus placebo on the primary endpoint of physical function in the POWER 1 clinical trial as assessed by continuous variable analysis, as pre-specified in the Company’s statistical analysis plan for the European Medicines Agency (“EMA”). The Company has been evaluating whether data from its two Phase 3 POWER clinical trials is sufficient to support the filing of 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, and has met with representatives from member countries to the EMA to review and discuss the results of the POWER trials. Based upon recent input from these representatives, the Company believes that the data from the POWER trials is not sufficient to support the filing and approval of a MAA in the EU for enobosarm 3 mg for the prevention and treatment of muscle wasting in patients with advanced NSCLC without confirmatory data from another Phase 3 clinical trial of enobosarm in this indication. As a result of the input received from these representatives, the Company currently does not intend to file a MAA and will evaluate whether there is commercial rationale and partner interest to support additional clinical development required for approval. 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 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 for enobosarm 3 mg for the prevention and treatment of muscle wasting in patients with advanced NSCLC. The Company’s strategy does not currently include further development of enobosarm for this indication in the U.S. or in Europe unless such development is part of a collaborative arrangement or strategic partnership. The Company continues to evaluate other potential indications in the U.S. for enobosarm. | |
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 a secondary hormonal therapy in men with metastatic and high risk non-metastatic castration resistant prostate cancer. | |
In April 2014, the Company announced that Mitchell S. Steiner, its former Chief Executive Officer (“CEO”), Vice Chairman of the Board of Directors and a co-founder of the Company, was leaving the Company to pursue other business interests. Dr. Steiner resigned from his roles as CEO and Vice Chairman of the Board of Directors of the Company 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 2015 annual meeting of the Company’s stockholders. 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 twelve months of base salary continuation payments and continued healthcare coverage through the earliest of December 31, 2014 or the date he ceases to be eligible for COBRA continuation coverage. As a result of these severance benefits, the Company recognized cash severance related expenses of $483 during the nine months ended September 30, 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. The Company recorded a one-time, noncash net compensation expense of $215 relating to these stock option modifications. See Note 2, Share-Based Compensation, for further information. | |
Basis of Presentation | |
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 the Company’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 and nine months ended September 30, 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 September 30, 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 September 30, 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 September 30, 2014 and December 31, 2013, the Company’s accrual for product returns was $141 and $918, respectively. Of these amounts, $82 and $332 have been included in “Other long-term liabilities” in the condensed balance sheet at September 30, 2014 and December 31, 2013, respectively, and represents the portion of the Company’s product returns accrual estimated to be payable after one year. | |
Subsequent Events | |
The Company has evaluated all events or transactions that occurred after September 30, 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. | |
On November 9, 2014, the Company entered into a definitive securities purchase agreement (the “Purchase Agreement”) with certain purchasers, including members of the Company’s management and Board of Directors (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers, subject to customary closing conditions, an aggregate of 64,311,112 immediately separable units, comprised of an aggregate of 64,311,112 shares of common stock and warrants to purchase up to 64,311,112 additional shares of common stock, for an aggregate purchase price of $43,410 (the “Private Placement”). The closing of the Private Placement is subject to the satisfaction of customary closing conditions. The warrants the Company agreed to issue at the closing of the Private Placement, which would have a per share exercise price of $0.85, would be subject to net cash settlement if at the time of any exercise, there are then an insufficient number of authorized and reserved shares of common stock to effect a share settlement of the warrants. The Company does not currently have a sufficient number of authorized and unreserved shares of common stock necessary to settle exercises of the warrants in full in shares of common stock. Under the Purchase Agreement, the Company has agreed to seek stockholder approval, at a special or annual meeting to be held no later than May 27, 2015, of an amendment to the Company’s Certificate of Incorporation to increase the Company’s authorized common stock to an amount necessary to effect the share settlement of all of the warrants the Company agreed to issue at the closing of the Private Placement. Assuming such approval is obtained, warrant exercises would no longer be subject to net cash settlement. The warrants would generally become exercisable on the date such stockholder approval is obtained (but in no event later than June 1, 2015) and would continue to be exercisable for four years thereafter. The Company also agreed to certain registration obligations with respect to the resale by the Purchasers of the common stock issued or underlying the warrants issued in the Private Placement. The Purchase Agreement may be terminated by either the Company or the Purchasers if the closing has not occurred by November 21, 2014 (subject to extension to November 28, 2014 under limited circumstances). | |
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-Based Compensation | ' | |||||||||||||
Share-Based Compensation | ' | |||||||||||||
2. Share-Based Compensation | ||||||||||||||
Share-based payments include stock option grants and restricted stock units (“RSUs”) 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 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 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 and nine months ended September 30, 2014 and 2013: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Research and development expenses | $ | 89 | $ | 356 | $ | 2,419 | $ | 1,051 | ||||||
General and administrative expenses | 177 | 406 | 1,861 | 1,281 | ||||||||||
Total share-based compensation | $ | 266 | $ | 762 | $ | 4,280 | $ | 2,332 | ||||||
Share-based compensation expense recorded as general and administrative expense for both the three months ended September 30, 2014 and 2013 included share-based compensation expense related to deferred compensation arrangements for the Company’s non-employee directors of $31. Share-based compensation expense recorded as general and administrative expense for the nine months ended September 30, 2014 and 2013 included share-based compensation expense related to deferred compensation arrangements for the Company’s non-employee directors of $94 and $105, respectively. As a result of the modification of Dr. Steiner’s options upon his resignation in April 2014, the Company recognized a one-time, noncash net compensation expense of $215, which was included in general and administrative expenses for the nine months ended September 30, 2014. This amount reflects the net of 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. | ||||||||||||||
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 estimated the fair value of RSUs using the closing price of its stock on the grant date. The fair value of RSUs was amortized on a straight-line basis over the requisite service period of the awards. At December 31, 2013, the Company had 1,225,000 unvested RSUs outstanding with a weighted average grant date fair value per share of $1.87. All of the Company’s outstanding RSUs vested during the second quarter of 2014 and no RSUs were outstanding at September 30, 2014. The number of RSUs vested includes 371,906 shares that were withheld on behalf of the Company’s employees to satisfy the statutory tax withholding requirements. | ||||||||||||||
The fair value of options granted to employees and non-employee directors was estimated using the following assumptions for the periods presented: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Expected price volatility | 86.6 | % | 74.8 | % | 86.5 | % | 74.5 | % | ||||||
Risk-free interest rate | 2.1 | % | 1.8 | % | 2.3 | % | 1.1 | % | ||||||
Weighted average expected life in years | 7.0 years | 6.5 years | 6.9 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 | 3,042,500 | 1.36 | ||||||||||||
Options forfeited or expired | (1,242,108 | ) | 9.03 | |||||||||||
Options exercised | — | — | ||||||||||||
Options outstanding at September 30, 2014 | 8,245,734 | 4.28 | ||||||||||||
Basic_and_Diluted_Net_Loss_Per
Basic and Diluted Net Loss Per Share | 9 Months Ended |
Sep. 30, 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 18,395,096 and 6,136,483 for the three months ended September 30, 2014 and 2013, respectively, and 15,658,766 and 6,432,994 for the nine months ended September 30, 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 these periods. | |
Common_Stock
Common Stock | 9 Months Ended |
Sep. 30, 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 for gross proceeds of $21,272. 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 net proceeds from 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 | 9 Months Ended |
Sep. 30, 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) | 9 Months Ended |
Sep. 30, 2014 | |
Business and Basis of Presentation | ' |
Basis of Presentation | ' |
Basis of Presentation | |
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 the Company’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 and nine months ended September 30, 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 September 30, 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 September 30, 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 September 30, 2014 and December 31, 2013, the Company’s accrual for product returns was $141 and $918, respectively. Of these amounts, $82 and $332 have been included in “Other long-term liabilities” in the condensed balance sheet at September 30, 2014 and December 31, 2013, respectively, and represents the portion of the Company’s product returns accrual estimated to be payable after one year. | |
Subsequent Events | ' |
Subsequent Events | |
The Company has evaluated all events or transactions that occurred after September 30, 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. | |
On November 9, 2014, the Company entered into a definitive securities purchase agreement (the “Purchase Agreement”) with certain purchasers, including members of the Company’s management and Board of Directors (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers, subject to customary closing conditions, an aggregate of 64,311,112 immediately separable units, comprised of an aggregate of 64,311,112 shares of common stock and warrants to purchase up to 64,311,112 additional shares of common stock, for an aggregate purchase price of $43,410 (the “Private Placement”). The closing of the Private Placement is subject to the satisfaction of customary closing conditions. The warrants the Company agreed to issue at the closing of the Private Placement, which would have a per share exercise price of $0.85, would be subject to net cash settlement if at the time of any exercise, there are then an insufficient number of authorized and reserved shares of common stock to effect a share settlement of the warrants. The Company does not currently have a sufficient number of authorized and unreserved shares of common stock necessary to settle exercises of the warrants in full in shares of common stock. Under the Purchase Agreement, the Company has agreed to seek stockholder approval, at a special or annual meeting to be held no later than May 27, 2015, of an amendment to the Company’s Certificate of Incorporation to increase the Company’s authorized common stock to an amount necessary to effect the share settlement of all of the warrants the Company agreed to issue at the closing of the Private Placement. Assuming such approval is obtained, warrant exercises would no longer be subject to net cash settlement. The warrants would generally become exercisable on the date such stockholder approval is obtained (but in no event later than June 1, 2015) and would continue to be exercisable for four years thereafter. The Company also agreed to certain registration obligations with respect to the resale by the Purchasers of the common stock issued or underlying the warrants issued in the Private Placement. The Purchase Agreement may be terminated by either the Company or the Purchasers if the closing has not occurred by November 21, 2014 (subject to extension to November 28, 2014 under limited circumstances). | |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-Based Compensation | ' | |||||||||||||
Summary of share-based compensation expense | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Research and development expenses | $ | 89 | $ | 356 | $ | 2,419 | $ | 1,051 | ||||||
General and administrative expenses | 177 | 406 | 1,861 | 1,281 | ||||||||||
Total share-based compensation | $ | 266 | $ | 762 | $ | 4,280 | $ | 2,332 | ||||||
Schedule of assumptions used to estimate fair value of options | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Expected price volatility | 86.6 | % | 74.8 | % | 86.5 | % | 74.5 | % | ||||||
Risk-free interest rate | 2.1 | % | 1.8 | % | 2.3 | % | 1.1 | % | ||||||
Weighted average expected life in years | 7.0 years | 6.5 years | 6.9 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 | 3,042,500 | 1.36 | ||||||||||||
Options forfeited or expired | (1,242,108 | ) | 9.03 | |||||||||||
Options exercised | — | — | ||||||||||||
Options outstanding at September 30, 2014 | 8,245,734 | 4.28 | ||||||||||||
Business_and_Basis_of_Presenta2
Business and Basis of Presentation (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Apr. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Former Chief Executive Officer | Former Chief Executive Officer | Former Chief Executive Officer | ||
Income Taxes | ' | ' | ' | ' | ' |
Net deferred tax assets | $0 | $0 | ' | ' | ' |
FARESTON Revenue Recognition | ' | ' | ' | ' | ' |
Accrual for product returns | 141 | 918 | ' | ' | ' |
Accrual for product returns included in other long term liabilities | 82 | 332 | ' | ' | ' |
Severance costs | ' | ' | ' | ' | ' |
Number of months of base salary paid in the form of severance benefits | ' | ' | '12 months | ' | ' |
Total cash severance related expenses | ' | ' | ' | ' | 483 |
One-time, noncash net compensation expense related to the modification of stock options | ' | ' | ' | $215 | ' |
Business_and_Basis_of_Presenta3
Business and Basis of Presentation (Details 2) (Private Placement, USD $) | 0 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 06, 2014 | Mar. 06, 2014 | Nov. 09, 2014 | Nov. 09, 2014 |
Projected | Projected | |||
Subsequent Event | Subsequent Event | |||
Common Stock | ' | ' | ' | ' |
Immediately separable units issued under private placement | ' | ' | 64,311,112 | ' |
Stock issued under private placement (in shares) | 11,976,048 | ' | 64,311,112 | ' |
Warrants issued to purchase shares under private placement | ' | 10,179,642 | ' | 64,311,112 |
Aggregate purchase price (in dollars) | $21,272 | ' | $43,410 | ' |
Per share exercise price payable in cash (in dollars per share) | ' | $1.67 | ' | $0.85 |
Warrant term | '1 year | ' | '4 years | ' |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Research and Development Expenses | Research and Development Expenses | Research and Development Expenses | Research and Development Expenses | General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | Director | Director | Director | Director | Former Chief Executive Officer | Former Chief Executive Officer | Former Chief Executive Officer | |||||
General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | General and Administrative Expenses | |||||||||||||||
Share-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total share-based compensation | $266 | $762 | $4,280 | $2,332 | $89 | $356 | $2,419 | $1,051 | $177 | $406 | $1,861 | $1,281 | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense related to deferred compensation arrangements for non-employee directors | ' | ' | 94 | 105 | ' | ' | ' | ' | ' | ' | ' | ' | 31 | 31 | 94 | 105 | ' | ' | ' |
One-time, noncash net compensation expense related to the modification of stock options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 215 | ' | 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 | ' |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (Restricted Stock Units (RSUs), USD $) | 3 Months Ended | ||
Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Restricted Stock Units (RSUs) | ' | ' | ' |
Number of Shares | ' | ' | ' |
Unvested awards (in shares) | ' | 0 | 1,225,000 |
Vested shares withheld to satisfy statutory tax withholding requirements | 371,906 | ' | ' |
Weighted Average Grant Date Fair Value Per Share | ' | ' | ' |
Weighted average grant date fair value per share (in dollars per share) | ' | ' | $1.87 |
ShareBased_Compensation_Detail2
Share-Based Compensation (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Fair value of options granted | ' | ' | ' | ' |
Expected price volatility (as a percent) | 86.60% | 74.80% | 86.50% | 74.50% |
Risk-free interest rate (as a percent) | 2.10% | 1.80% | 2.30% | 1.10% |
Weighted average expected life in years | '7 years | '6 years 6 months | '6 years 10 months 24 days | '6 years 6 months |
Number of Shares | ' | ' | ' | ' |
Options outstanding at the beginning of the period (in shares) | ' | ' | 6,445,342 | ' |
Options granted (in shares) | ' | ' | 3,042,500 | ' |
Options forfeited or expired (in shares) | ' | ' | -1,242,108 | ' |
Options outstanding at the end of the period (in shares) | 8,245,734 | ' | 8,245,734 | ' |
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) | ' | ' | $1.36 | ' |
Options forfeited or expired (in dollars per share) | ' | ' | $9.03 | ' |
Options outstanding at the end of the period (in dollars per share) | $4.28 | ' | $4.28 | ' |
Basic_and_Diluted_Net_Loss_Per1
Basic and Diluted Net Loss Per Share (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 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 | 18,395,096 | 6,136,483 | 15,658,766 | 6,432,994 |
Common_Stock_Details
Common Stock (Details) (Private Placement, USD $) | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 06, 2014 | 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 |
Aggregate purchase price (in dollars) | $21,272 | ' |
Warrant term | '1 year | ' |
Per share exercise price payable in cash (in dollars per share) | ' | $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% | ' |