Oncternal Therapeutics (ONCT) 10-Q 14 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 09, 2017
Document and Entity Information
Entity Registrant Name	GTX INC /DE/
Entity Central Index Key	1,260,990
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		21,541,909
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 53,431	$ 8,910
Short-term investments	200	12,959
Prepaid expenses and other current assets	2,049	2,429
Total current assets	55,680	24,298
Property and equipment, net	57	81
Intangible assets, net	112	123
Total assets	55,849	24,502
Current liabilities:
Accounts payable	2,451	1,220
Accrued expenses and other current liabilities	6,828	3,391
Total current liabilities	9,279	4,611
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value: 60,000,000 shares authorized at September 30, 2017 and December 31, 2016; 21,541,909 and 15,919,572 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	22	16
Additional paid-in capital	598,908	551,073
Accumulated deficit	(552,360)	(531,198)
Total stockholders' equity	46,570	19,891
Total liabilities and stockholders' equity	$ 55,849	$ 24,502

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
CONDENSED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	21,541,909	15,919,572
Common stock, shares outstanding	21,541,909	15,919,572

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Expenses:
Research and development expenses	$ 5,914	$ 4,614	$ 14,555	$ 12,643
General and administrative expenses	2,617	2,313	6,701	6,426
Total expenses	8,531	6,927	21,256	19,069
Loss from operations	(8,531)	(6,927)	(21,256)	(19,069)
Other income, net	27	13	94	46
Gain on change in fair value of warrant liability				8,163
Net loss	$ (8,504)	$ (6,914)	$ (21,162)	$ (10,860)
Net loss per share:
Net loss per share -- basic and diluted (in dollars per share)	$ (0.53)	$ (0.49)	$ (1.32)	$ (0.77)
Weighted average shares outstanding:
Basic and diluted (in shares)	16,115,835	14,189,226	16,059,383	14,172,177

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net loss	$ (21,162)	$ (10,860)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on change in fair value of warrant liability		(8,163)
Depreciation and amortization	35	17
Share-based compensation	2,225	2,318
Directors' deferred compensation	124	92
Changes in assets and liabilities:
Prepaid expenses and other assets	380	537
Accounts payable	1,231	841
Accrued expenses and other liabilities	3,437	(300)
Net cash used in operating activities	(13,730)	(15,518)
Cash flows from investing activities:
Purchase of property and equipment		(90)
Purchase of short-term investments, held to maturity	(11,400)	(22,400)
Proceeds from maturities of short-term investments, held to maturity	24,159	32,400
Net cash provided by investing activities	12,759	9,910
Cash flows from financing activities:
Net proceeds from the issuance of common stock and warrants	45,648
Tax payments related to shares withheld for vested restricted stock units	(156)	(210)
Net cash provided by (used in) financing activities	45,492	(210)
Net increase (decrease) in cash and cash equivalents	44,521	(5,818)
Cash and cash equivalents, beginning of period	8,910	14,056
Cash and cash equivalents, end of period	$ 53,431	$ 8,238

Business and Basis of Presentat

Business and Basis of Presentation	9 Months Ended
	Sep. 30, 2017
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 medicines to treat serious medical conditions, including stress urinary incontinence and prostate cancer. The Company is developing selective androgen receptor modulators (“SARMs”), including its lead product candidate, enobosarm (GTx-024). SARMs are a class of drugs that the Company believes has the potential to treat serious medical conditions where unmet medical needs in muscle-related diseases may benefit from increasing muscle mass, such as stress urinary incontinence (“SUI”) and Duchenne muscular dystrophy (“DMD”). In 2016, the Company initiated a Phase 2 open-label, non-placebo controlled, proof-of-concept clinical trial of enobosarm to treat postmenopausal women with SUI. Based on the emerging data from this ongoing proof-of-concept clinical trial, the Company initiated a placebo-controlled Phase 2 clinical trial of enobosarm to treat postmenopausal women with SUI in the third quarter of 2017. The Company commenced enrollment in 2015 in a Phase 2 clinical trial designed to evaluate the efficacy and safety of a 9 mg and 18 mg dose of enobosarm in patients whose advanced breast cancer is both estrogen receptor (“ER”) positive and androgen receptor (“AR”) positive. The Company announced in November 2016 that enobosarm achieved the pre-specified primary efficacy endpoint in the 9 mg dose cohort and announced in November 2017 that the pre-specified primary efficacy endpoint was also achieved in the 18 mg dose cohort. After evaluating the breast cancer environment where the treatment paradigms are shifting to immunotherapies and/or combination therapies, along with the time and cost of conducting the necessary clinical trials for approval, the Company has decided not to pursue additional clinical development of enobosarm for this indication. The Company has also evaluated several SARM compounds, including enobosarm, in preclinical models of DMD where a SARM’s ability to increase muscle mass may prove beneficial to patients suffering from DMD. The Company is actively seeking potential collaboration partners to further develop a SARM for the treatment of DMD. In 2015, the Company entered into an exclusive license agreement with the University of Tennessee Research Foundation (“UTRF”) to develop UTRF’s proprietary selective androgen receptor degrader (“SARD”) technology which may have the potential to provide compounds that can degrade multiple forms of AR to treat those patients who do not respond or are resistant to current therapies by inhibiting tumor growth in patients with progressive castration-resistant prostate cancer (“CRPC”). The Company has ongoing mechanistic preclinical studies to select the most appropriate compound to potentially move into a first-in-human clinical trial. On September 29, 2017, the Company completed a private placement of units consisting of an aggregate of 5,483,320 shares of common stock and warrants to purchase an aggregate of 3,289,988 shares of its common stock for net proceeds of $45,648, after deducting placement agent fees and other offering expenses. 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 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, 2016. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2017. On December 5, 2016, the Company effected a one-for-ten reverse stock split of its common stock through an amendment to its restated certification of incorporation. As of the effective time of the reverse stock split, every ten shares of the Company’s issued and outstanding common stock were automatically combined and reclassified into one issued and outstanding share of common stock, without any change in par value per share. The amendment to the Company’s restated certification of incorporation also reduced the number of authorized shares of common stock from 400,000,000 to 60,000,000 shares. The reverse stock split affected all shares of the Company’s common stock outstanding immediately prior to the effective time of the reverse stock split. Additionally, as a result of the reverse stock split, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units and warrants issued by the Company and outstanding immediately prior to the effective time, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares reserved for issuance under the Company’s equity compensation plans immediately prior to the effective time was reduced proportionately. No fractional shares were issued as a result of the reverse stock split. Stockholders who have otherwise been entitled to receive a fractional share received a cash payment in lieu thereof. All references to shares of common stock, all per share data, and all warrant, stock option and restricted stock unit (“RSU”) activity for all periods presented in these condensed financial statements and notes to the condensed financial statements have been adjusted to reflect the reverse stock split on a retroactive basis. 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. Warrant Liability In November 2014, the Company issued warrants to purchase 6,430,948 shares of its common stock. The Company classified these warrants as a liability on its balance sheet since the warrants contained certain terms that could have required the Company (or its successor) to purchase the warrants for cash in an amount equal to the value (as calculated utilizing a contractually-agreed Black-Scholes-Merton option pricing valuation model (“Black-Scholes Model”)) of the unexercised portion of the warrants in connection with certain change of control transactions occurring on or prior to December 31, 2016, with such cash payment capped at an amount equal to $1.25 per unexercised share underlying each warrant. As a result of the provision of the warrants requiring cash settlement upon certain change of control transactions, the Company was required to account for these warrants as a liability at fair value and the estimated warrant liability was required to be revalued at each balance sheet date until the earlier of the exercise of the warrants, the modification to remove the provision that could require cash settlement upon certain change of control transactions or the expiration of such provision on December 31, 2016. Effective March 25, 2016, each of the warrants was amended by agreement of the warrant holders to remove the provision that could require cash settlement upon certain change of control transactions. These warrants were no longer accounted for as a liability subsequent to March 25, 2016. The Company recorded a non-cash reclassification of the warrant fair value to stockholders’ equity based on the warrants’ fair value as of the March 25, 2016 modification date, with no further adjustments to the fair value of these warrants being required. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments (which include cash, cash equivalents, short-term investments, and accounts payable) approximate their fair values. The Company’s financial assets and liabilities are classified within a three-level fair value hierarchy that prioritizes the inputs used to measure fair value, which is defined as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date Level 2 – Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly Level 3 – Inputs that are unobservable for the asset or liability As the Company has the positive intent and ability to hold its certificates of deposit classified as short-term investments 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. 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. 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, 2017 and December 31, 2016, 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. 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, 2017 and December 31, 2016, net of the valuation allowance, the net deferred tax assets were reduced to zero. Income taxes are described more fully in Note 8 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2017. Other Income, net Other income, net consists of foreign currency transaction gains and losses, interest earned on the Company’s cash, cash equivalents and short-term investments, and other non-operating income or expense. Loan Agreement On August 10, 2017, the Company entered into a loan agreement with J.R. Hyde, III and The Pyramid Peak Foundation (the “Loan Agreement”) to borrow up to a total of $15,000 (the “Loans”). Each of Mr. Hyde and The Pyramid Peak Foundation (the “Lenders”) are significant stockholders, and Mr. Hyde serves on the Company’s board of directors. The Company did not borrow any amounts under the Loan Agreement and the Loan Agreement terminated in accordance with its terms on September 29, 2017 as on that date, the Company completed a private placement of its equity securities resulting in gross proceeds of $48,500 (described more fully in Note 4, Stockholders’ Equity ). Under the terms of the Loan Agreement, the Loan Agreement terminated on the date that the Company consummated an equity financing resulting in gross proceeds of at least $15,000. Subsequent Events The Company has evaluated all events or transactions that occurred after September 30, 2017 up through the date the condensed financial statements were issued. There were no material recognizable or nonrecognizable subsequent events during the period evaluated.

Share-Based Compensation

Share-Based Compensation	9 Months Ended
	Sep. 30, 2017
Share-Based Compensation
Share-Based Compensation	2. Share-Based Compensation Share-based payments include stock option grants and 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 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 filed with the Securities and Exchange Commission on March 24, 2017. During the first quarter of 2017, the Company adopted the Financial Accounting Standards Board Accounting Standards Update 2016-09, Improvements to Employee Share Based Payment Accounting . This guidance addresses the income tax effects of stock-based payments and eliminates the windfall pool concept, as all of the tax effects related to stock-based payments will now be recorded at settlement (or expiration) through the income statement. The new guidance also permits entities to make an accounting policy election for the impact of forfeitures on the recognition of expense for stock-based payment awards, allowing for forfeitures to be estimated or recognized when they occur. The Company elected to prospectively adopt the policy that forfeitures be recorded when they occur. The adoption of this guidance did not have a material impact on the Company’s financial position or results of operations. The following table summarizes share-based compensation expense included within the condensed statements of operations for the three and nine months ended September 30, 2017 and 2016: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Research and development expenses $ $ $ $ General and administrative expenses Total share-based compensation $ $ $ $ Share-based compensation expense recorded as general and administrative expense for the three months ended September 30, 2017 and 2016 included share-based compensation expense related to deferred compensation arrangements for the Company’s non-employee directors of $41 and $33, respectively. Share-based compensation expense recorded as general and administrative expense for the nine months ended September 30, 2017 and 2016 included share-based compensation expense related to deferred compensation arrangements for the Company’s non-employee directors of $124 and $92, respectively. The Company uses the 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 fair value of options granted was estimated using the following assumptions for the periods presented: Nine Months Ended 2017 2016 Expected price volatility % % Risk-free interest rate % % Weighted average expected life in years 6.9 years 6.9 years There were no options granted during the three months ended September 30, 2017. Options granted during the three months ended September 30, 2016 were valued using the following assumptions: expected volatility of 89.4%, risk free interest rate of 1.2%, and an expected life of six 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 Options outstanding at December 31, 2016 $ Options granted Options forfeited or expired ) Options outstanding at September 30, 2017 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 following is a summary of the RSU transactions for all of the Company’s equity incentive plans since the Company’s most recent fiscal year end: Number of Shares Nonvested RSUs at December 31, 2016 RSUs granted — RSUs vested ) RSUs forfeited ) Nonvested RSUs at September 30, 2017

Basic and Diluted Net Loss Per

Basic and Diluted Net Loss Per Share	9 Months Ended
	Sep. 30, 2017
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 income (loss) per share attributable to common stockholders is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share gives effect to the dilutive potential of common stock consisting of stock options, unvested RSUs and common stock warrants. Weighted average potential shares of common stock of 8,741,251 and 8,151,501 for the three months ended September 30, 2017 and 2016, respectively, and 8,574,822 and 8,169,793 for the nine months ended September 30, 2017 and 2016, respectively, were excluded from the calculations of diluted net 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.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2017
Stockholders' Equity
Stockholders' Equity	4. Stockholders’ Equity Common Stock On September 29, 2017, the Company completed a private placement of units consisting of an aggregate of 5,483,320 shares of common stock and warrants to purchase an aggregate of 3,289,988 shares of its common stock for net proceeds of $45,648, after deducting placement agent fees and other offering expenses. The purchasers in the registered direct offering consisted solely of accredited investors that included certain institutional and existing stockholders, including a member of the Company’s board of directors. The warrants, which have five year terms expiring on September 29, 2022, are immediately exercisable and have a per share exercise price of $9.02. 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 $21,069 using the Black-Scholes Model with the following assumptions: expected volatility of 97%, risk free interest rate of 1.92%, expected life of five years and no dividends. The net proceeds from the private placement were allocated to the common stock and warrants based upon their relative fair values. On October 14, 2016, the Company completed a registered direct offering of its common stock, in which it sold 1,728,395 shares of its common stock for net proceeds of $13,692. The purchasers in the registered direct offering consisted of certain existing GTx stockholders and certain members of the GTx management team and board of directors. On November 14, 2014, the Company completed a private placement of units consisting of an aggregate of 6,431,111 shares of common stock and warrants to purchase an aggregate of 6,430,948 shares of its common stock for net proceeds of $42,814, after deducting offering expenses. The purchasers in the private placement included certain existing GTx stockholders and certain members of the GTx management team and board of directors. The net proceeds from the private placement were allocated to the common stock and warrants based upon the fair value method. Similarly, the offering expenses were allocated between the common stock and warrants with the portion allocated to common stock offset against the proceeds allocated to stockholders’ equity, whereas the portion allocated to the warrants was expensed immediately. The warrants have a per share exercise price of $8.50, became exercisable on May 6, 2015 and will continue to be exercisable for four years thereafter. Prior to May 6, 2015, each warrant was subject to net cash settlement if, at the time of any exercise, there was then an insufficient number of authorized and reserved shares of common stock to effect a share settlement of the warrant. Under the terms of the warrants, as of May 6, 2015, the net cash settlement feature of the warrants automatically became inoperative; accordingly, the warrants are exercisable only for shares of the Company’s common stock. The warrants, however, also contained certain terms that could have required the Company (or its successor) to purchase the warrants for cash in an amount equal to the value (as calculated utilizing a contractually-agreed Black-Scholes Model) of the unexercised portion of the warrants in connection with certain change of control transactions occurring on or prior to December 31, 2016, with the cash payment capped at an amount equal to $1.25 per unexercised share underlying each warrant. Due to the provision of the warrants that could have required cash settlement upon certain change of control transactions, the Company was required to account for these warrants as a liability at fair value using the Black-Scholes Model and the estimated warrant liability was required to be revalued at each balance sheet date until the earlier of the exercise of the warrants, the modification to remove the provision that could require cash settlement upon certain change of control transactions or the expiration of such provision on December 31, 2016. Effective March 25, 2016, each of the warrants was amended by agreement of the warrant holders to remove the provision that could require cash settlement upon certain change of control transactions. These warrants were no longer accounted for as a liability at March 31, 2016. The Company recorded a non-cash reclassification of the warrant fair value to stockholders’ equity based on the warrants’ fair value as of the March 25, 2016 modification date, with no further adjustments to the fair value of these warrants being required. The fair value of the warrants on the March 25, 2016 modification date of $19,186 was estimated using the Black-Scholes Model with the following assumptions: expected volatility of 101%, risk-free interest rate of 1.1%, expected life of approximately 3.1 years and no dividends.

University of Tennessee Researc

University of Tennessee Research Foundation License Agreements	9 Months Ended
	Sep. 30, 2017
University of Tennessee Research Foundation License Agreements
University of Tennessee Research Foundation License Agreements	5. University of Tennessee Research Foundation License Agreements 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. The Company and UTRF also entered into a license agreement (the “SARD License Agreement”) in March 2015 pursuant to which the Company was granted exclusive worldwide rights in all existing SARD technologies owned or controlled by UTRF, including all improvements thereto. Under the SARD License Agreement, the Company is obligated to employ active, diligent efforts to conduct preclinical research and development activities for the SARD program to advance one or more lead compounds into clinical development. The Company is also obligated to pay UTRF annual license maintenance fees, low single-digit royalties on net sales of products and additional royalties on sublicense revenues, depending on the state of development of a clinical product candidate at the time it is sublicensed.

Business and Basis of Present11

Business and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
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 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, 2016. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2017. On December 5, 2016, the Company effected a one-for-ten reverse stock split of its common stock through an amendment to its restated certification of incorporation. As of the effective time of the reverse stock split, every ten shares of the Company’s issued and outstanding common stock were automatically combined and reclassified into one issued and outstanding share of common stock, without any change in par value per share. The amendment to the Company’s restated certification of incorporation also reduced the number of authorized shares of common stock from 400,000,000 to 60,000,000 shares. The reverse stock split affected all shares of the Company’s common stock outstanding immediately prior to the effective time of the reverse stock split. Additionally, as a result of the reverse stock split, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units and warrants issued by the Company and outstanding immediately prior to the effective time, which resulted in a proportionate decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportionate increase in the exercise price of all such stock options and warrants. In addition, the number of shares reserved for issuance under the Company’s equity compensation plans immediately prior to the effective time was reduced proportionately. No fractional shares were issued as a result of the reverse stock split. Stockholders who have otherwise been entitled to receive a fractional share received a cash payment in lieu thereof. All references to shares of common stock, all per share data, and all warrant, stock option and restricted stock unit (“RSU”) activity for all periods presented in these condensed financial statements and notes to the condensed financial statements have been adjusted to reflect the reverse stock split on a retroactive basis.
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.
Warrant Liability	Warrant Liability In November 2014, the Company issued warrants to purchase 6,430,948 shares of its common stock. The Company classified these warrants as a liability on its balance sheet since the warrants contained certain terms that could have required the Company (or its successor) to purchase the warrants for cash in an amount equal to the value (as calculated utilizing a contractually-agreed Black-Scholes-Merton option pricing valuation model (“Black-Scholes Model”)) of the unexercised portion of the warrants in connection with certain change of control transactions occurring on or prior to December 31, 2016, with such cash payment capped at an amount equal to $1.25 per unexercised share underlying each warrant. As a result of the provision of the warrants requiring cash settlement upon certain change of control transactions, the Company was required to account for these warrants as a liability at fair value and the estimated warrant liability was required to be revalued at each balance sheet date until the earlier of the exercise of the warrants, the modification to remove the provision that could require cash settlement upon certain change of control transactions or the expiration of such provision on December 31, 2016. Effective March 25, 2016, each of the warrants was amended by agreement of the warrant holders to remove the provision that could require cash settlement upon certain change of control transactions. These warrants were no longer accounted for as a liability subsequent to March 25, 2016. The Company recorded a non-cash reclassification of the warrant fair value to stockholders’ equity based on the warrants’ fair value as of the March 25, 2016 modification date, with no further adjustments to the fair value of these warrants being required.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments (which include cash, cash equivalents, short-term investments, and accounts payable) approximate their fair values. The Company’s financial assets and liabilities are classified within a three-level fair value hierarchy that prioritizes the inputs used to measure fair value, which is defined as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date Level 2 – Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly Level 3 – Inputs that are unobservable for the asset or liability As the Company has the positive intent and ability to hold its certificates of deposit classified as short-term investments 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.
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.
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, 2017 and December 31, 2016, 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.
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, 2017 and December 31, 2016, net of the valuation allowance, the net deferred tax assets were reduced to zero. Income taxes are described more fully in Note 8 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2017.
Other Income, net	Other Income, net Other income, net consists of foreign currency transaction gains and losses, interest earned on the Company’s cash, cash equivalents and short-term investments, and other non-operating income or expense.
Loan Agreement	Loan Agreement On August 10, 2017, the Company entered into a loan agreement with J.R. Hyde, III and The Pyramid Peak Foundation (the “Loan Agreement”) to borrow up to a total of $15,000 (the “Loans”). Each of Mr. Hyde and The Pyramid Peak Foundation (the “Lenders”) are significant stockholders, and Mr. Hyde serves on the Company’s board of directors. The Company did not borrow any amounts under the Loan Agreement and the Loan Agreement terminated in accordance with its terms on September 29, 2017 as on that date, the Company completed a private placement of its equity securities resulting in gross proceeds of $48,500 (described more fully in Note 4, Stockholders’ Equity ). Under the terms of the Loan Agreement, the Loan Agreement terminated on the date that the Company consummated an equity financing resulting in gross proceeds of at least $15,000.
Subsequent Events	Subsequent Events The Company has evaluated all events or transactions that occurred after September 30, 2017 up through the date the condensed financial statements were issued. There were no material recognizable or nonrecognizable subsequent events during the period evaluated.

Share-Based Compensation (Table

Share-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2017
Share-Based Compensation
Summary of share-based compensation expense	Three Months Ended Nine Months Ended 2017 2016 2017 2016 Research and development expenses $ $ $ $ General and administrative expenses Total share-based compensation $ $ $ $
Schedule of assumptions used to estimate fair value of options granted	Nine Months Ended 2017 2016 Expected price volatility % % Risk-free interest rate % % Weighted average expected life in years 6.9 years 6.9 years
Summary of stock option transactions	Number of Shares Weighted Average Options outstanding at December 31, 2016 $ Options granted Options forfeited or expired ) Options outstanding at September 30, 2017
Summary of RSU transactions	Number of Shares Nonvested RSUs at December 31, 2016 RSUs granted — RSUs vested ) RSUs forfeited ) Nonvested RSUs at September 30, 2017

Business and Basis of Present13

Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands	Sep. 29, 2017USD ($)shares	Aug. 10, 2017USD ($)	Dec. 05, 2016shares	Sep. 30, 2017USD ($)shares	Dec. 31, 2016USD ($)shares	Dec. 04, 2016shares	Nov. 30, 2014$ / sharesshares
Business
Warrants issued to purchase shares under private placement							6,430,948
Basis of Presentation
Reverse stock split of outstanding common stock			0.1
Common stock, shares authorized			60,000,000	60,000,000	60,000,000	400,000,000
Number of fractional shares issued as a result of the reverse stock split			0
Warrants
Warrants issued to purchase shares under private placement							6,430,948
Maximum contingent per share cash settlement price (in dollars per share) | $ / shares							$ 1.25
Income Taxes
Net deferred tax assets | $				$ 0	$ 0
Loan Agreement
Minimum equity financing proceeds raised to terminate loan agreement | $		$ 15,000
Pyramid Peak Foundation and J.R. Hyde, III
Loan Agreement
Maximum borrowing | $		$ 15,000
Private Placement, September 2017
Business
Shares issued under private placement	5,483,320
Warrants issued to purchase shares under private placement	3,289,988
Net proceeds from private placement after deducting offering expenses | $	$ 45,648
Warrants
Warrants issued to purchase shares under private placement	3,289,988
Loan Agreement
Gross proceeds from private placement | $	$ 48,500

Share-Based Compensation - Shar

Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share-based compensation expense
Total share-based compensation	$ 944	$ 852	$ 2,349	$ 2,410
Share-based compensation expense related to deferred compensation arrangements for non-employee directors			124	92
Research and development expenses
Share-based compensation expense
Total share-based compensation	368	391	782	1,054
General and administrative expenses
Share-based compensation expense
Total share-based compensation	576	461	1,567	1,356
Director | General and administrative expenses
Share-based compensation expense
Share-based compensation expense related to deferred compensation arrangements for non-employee directors	$ 41	$ 33	$ 124	$ 92

Share-Based Compensation - Stoc

Share-Based Compensation - Stock Option Activity (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Stock-based compensation options granted
Expected price volatility (as a percent)		89.40%	88.50%	91.30%
Risk-free interest rate (as a percent)		1.20%	2.20%	2.00%
Weighted average expected life in years		6 years	6 years 10 months 24 days	6 years 10 months 24 days
Number of Shares
Options outstanding at the beginning of the period (in shares)			1,089,980
Options granted (in shares)	0		942,350
Options forfeited or expired (in shares)			(141,434)
Options outstanding at the end of the period (in shares)	1,890,896		1,890,896
Weighted Average Exercise Price Per Share
Options outstanding at the beginning of the period (in dollars per share)			$ 27.13
Options granted (in dollars per share)			4.69
Options forfeited or expired (in dollars per share)			31.68
Options outstanding at the end of the period (in dollars per share)	$ 15.60		$ 15.60

Share-Based Compensation - RSU

Share-Based Compensation - RSU Activity - (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2017shares
Number of Shares
Nonvested RSUs outstanding at the beginning of the period (in shares)	584,999
RSUs vested (in shares)	(168,499)
RSUs forfeited (in shares)	(36,000)
Nonvested RSUs outstanding at the end of the period (in shares)	380,500

Basic and Diluted Net Loss Pe17

Basic and Diluted Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Basic and Diluted Net Loss Per Share
Weighted average potential shares of common stock excluded from calculation of diluted net loss per share	8,741,251	8,151,501	8,574,822	8,169,793

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 29, 2017	Oct. 14, 2016	Mar. 25, 2016	May 06, 2015	Nov. 14, 2014	Dec. 31, 2016	Nov. 30, 2014
Common Stock
Warrants issued to purchase shares under private placement							6,430,948
Maximum contingent per share cash settlement price (in dollars per share)							$ 1.25
Private Placement, September 2017
Common Stock
Shares issued	5,483,320
Warrants issued to purchase shares under private placement	3,289,988
Net proceeds from private placement after deducting offering expenses	$ 45,648
Warrant term	5 years
Exercise price (in dollars per share)	$ 9.02
Estimated fair value of warrants	$ 21,069
Expected volatility of warrants (as a percent)	97.00%
Risk-free interest rate of warrants (as a percent)	1.92%
Expected life of warrants	5 years
Expected dividends on warrants	$ 0
Direct Offering, October 2016
Common Stock
Shares issued		1,728,395
Net cash proceeds from public offering after deducting offering expenses		$ 13,692
Private Placement, November 2014
Common Stock
Shares issued					6,431,111
Warrants issued to purchase shares under private placement					6,430,948
Net proceeds from private placement after deducting offering expenses					$ 42,814
Warrant term				4 years
Exercise price (in dollars per share)				$ 8.50
Expected volatility of warrants (as a percent)			101.00%
Risk-free interest rate of warrants (as a percent)			1.10%
Expected life of warrants			3 years 1 month 6 days
Maximum contingent per share cash settlement price (in dollars per share)						$ 1.25
Expected dividends on warrants			$ 0
Estimated fair value of warrants			$ 19,186