Agile Therapeutics (AGXRW) 10-Q 7 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 04, 2018
Document and Entity Information
Entity Registrant Name	AGILE THERAPEUTICS INC
Entity Central Index Key	1,261,249
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
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		34,248,268
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

Balance Sheets

Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 28,344	$ 35,952
Prepaid expenses	633	762
Total current assets	28,977	36,714
Property and equipment, net	13,927	13,863
Other assets	18	18
Total assets	42,922	50,595
Current liabilities:
Accounts payable	2,071	2,784
Accrued expenses	1,130	852
Loan payable, current portion	9,090	10,607
Warrant liability	22	29
Total current liabilities	12,313	14,272
Commitments and contingencies (Note 9)
Stockholders' equity
Common stock, $.0001 par value, 150,000,000 shares authorized, 34,248,268 and 34,186,342 issued and outstanding at March 31, 2018 and December 31, 2017, respectively	3	3
Additional paid-in capital	259,211	258,092
Accumulated deficit	(228,605)	(221,772)
Total stockholders' equity	30,609	36,323
Total liabilities and stockholders' equity	$ 42,922	$ 50,595

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Balance Sheets
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	34,248,268	34,186,342
Common stock, outstanding (in shares)	34,248,268	34,186,342

Statements of Operations

Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating expenses:
Research and development	$ 3,960	$ 4,721
General and administrative	3,086	2,405
Total operating expenses	7,046	7,126
Loss from operations	(7,046)	(7,126)
Other income (expense)
Interest income	97	47
Interest expense	(368)	(546)
Change in fair value of warrants	7	109
Total other income (expense), net	(264)	(390)
Loss before benefit from income taxes	(7,310)	(7,516)
Benefit from income taxes	477
Net loss	$ (6,833)	$ (7,516)
Net loss per share (basic and diluted) (in dollars per share)	$ (0.20)	$ (0.26)
Weighted-average common shares (basic and diluted) (in shares)	34,229,162	28,769,361

Statements of Cash Flows

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (6,833)	$ (7,516)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	6	5
Noncash stock based compensation	1,119	835
Noncash interest	139	186
Change in fair value of warrants	(7)	(109)
Changes in operating assets and liabilities:
Prepaid expenses and other assets	129	243
Accounts payable and accrued expenses	(269)	348
Net cash used in operating activities	(5,716)	(6,008)
Cash flows from investing activities:
Acquisition of property and equipment	(276)	(5)
Net cash used in investing activities	(276)	(5)
Cash flows from financing activities:
Principal payments of loan payable	(1,616)	(993)
Net cash used in financing activities	(1,616)	(993)
Net decrease in cash and cash equivalents	(7,608)	(7,006)
Cash and cash equivalents, beginning of period	35,952	48,750
Cash and cash equivalents, end of period	28,344	41,744
Supplemental cash flow information
Interest paid	$ 239	$ 368

Organization and Description of

Organization and Description of Business	3 Months Ended
	Mar. 31, 2018
Organization and Description of Business
Organization and Description of Business	1. Organization and Description of Business Nature of Operations Agile Therapeutics, Inc. (“Agile” or the “Company”) was incorporated in Delaware on December 22, 1997. Agile is a forward-thinking women’s healthcare company dedicated to fulfilling the unmet health needs of today’s women. The Company’s activities since inception have consisted principally of raising capital and performing research and development. The Company is headquartered in Princeton, New Jersey. The Company’s lead product candidate, Twirla®, also known as AG200-15, is a once-weekly prescription contraceptive patch that is at the end of Phase 3 clinical development. Substantially all of the Company’s resources are currently dedicated to developing and seeking regulatory approval for Twirla. The Company has not generated product revenue to date and is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from larger companies. The Company has incurred losses each year since inception. As of March 31, 2018, the Company had an accumulated deficit of approximately $228.6 million. The Company has financed its operations to date primarily through the issuance and sale of its common stock in both public and private offerings (see Note 7), private placements of its convertible preferred stock, venture loans, and non-dilutive grant funding. The Company expects to continue to incur net losses into the foreseeable future. Going Concern On December 21, 2017, the Company received a complete response letter (the “2017 CRL”) from the FDA citing deficiencies related to the manufacturing process for Twirla and raising questions on the in vivo adhesion properties of Twirla and their potential relationship to the Company’s phase 3 clinical trial results. The Company’s ability to commercialize Twirla, and the timing of Twirla commercialization, is dependent on FDA’s review of the Company’s response to the 2017 CRL and its NDA for Twirla, and other items such as timely and successful completion of the validation of equipment for commercial manufacturing, ultimate FDA approval, and additional capital. In January 2018, following the Company’s receipt of the 2017 CRL, the Company significantly scaled back its preparations for commercialization of Twirla, including commercial pre-launch and manufacturing validation activities, pending its ability to address the 2017 CRL and receive approval of Twirla. The Company’s current business plan assumes resubmission of its NDA for Twirla in the second quarter of 2018, a six-month FDA review of its NDA resubmission, and resumption of both pre-launch commercial activities and pre-validation and validation of the Company’s manufacturing process after Twirla approval, if the FDA approves Twirla. The Company has met with the FDA in a Type A meeting to discuss the deficiencies in the Twirla NDA and the regulatory path for approval of Twirla. The Company will be better able to determine the timeline for resubmission of the Twirla NDA after receipt of the final meeting minutes from the FDA. The Company will require additional capital to fund operating needs beyond 2018, including among other items, the resumption and completion of our commercialization plan for Twirla, which primarily includes the validation of our commercial manufacturing process and the commercial launch of Twirla, if approved, and advancing the development of its other potential product candidates. The Company cannot assure you that the FDA will approve Twirla, that the FDA’s timeline for review will be within six months, or that the Company along with Corium, its third-party manufacturer, will be able to complete validation of the Company’s commercial manufacturing successfully and in a timely manner. The Company’s ability to continue operations after December 31, 2018 will depend on its ability to obtain additional funding, as to which no assurances can be given. There can be no assurance that any financing by the Company can be realized by the Company, or if realized, what the terms of any such financing may be, or that any amount that the Company is able to raise will be adequate. Based upon the foregoing, there is substantial doubt about the Company’s ability to continue as a going concern. As of March 31, 2018, the Company had cash and cash equivalents of $28.3 million. The Company continues to analyze various alternatives, including strategic and refinancing alternatives, asset sales and mergers and acquisitions. The Company’s future success depends on its ability to raise capital and/or implement the various strategic alternatives discussed above. The Company cannot be certain that these initiatives or raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to the Company. If the Company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and the Company’s current stockholders may experience dilution. If the Company is unable to obtain funds when needed or on acceptable terms, the Company may be required to curtail its current development programs, cut operating costs, forego future development and other opportunities and may need to seek bankruptcy protection. The unaudited financial statements as of March 31, 2018 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months. The Company’s ability to continue as a going concern is dependent upon its uncertain ability to obtain additional equity and/or debt financing and reduce expenditures. The accompanying financial statements as of March 31, 2018 do not include any adjustments that might result from the outcome of this uncertainty. Basis of Presentation The accompanying unaudited interim financial statements have been prepared by the Company, without audit, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC. In the opinion of management, the unaudited interim financial statements reflects all adjustments, which are normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods have been made. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for the full fiscal year or any future period.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies The Company’s complete listing of significant accounting policies is described in Note 2 to the Company’s audited financial statements as of December 31, 2017 included in its annual report on Form 10-K filed with the SEC. Use of Estimates The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for common stock warrants, stock-based compensation, income taxes, and accounting for research and development costs. Actual results could differ from those estimates. Fair Value of Financial Instruments In accordance with Accounting Standards Codification (“ASC”) 825, Financial Instruments , disclosures of fair value information about financial instruments are required, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Cash and cash equivalents are carried at fair value (see Note 3). Other financial instruments, including accounts payable and accrued liabilities, are carried at cost, which approximates fair value given their short-term nature. Warrants The Company accounts for its warrants to purchase redeemable convertible stock in accordance with ASC 480, Distinguishing Liabilities from Equity . ASC 480 requires that a financial instrument, other than an outstanding share, that, at inception, is indexed to an obligation to repurchase the issuer’s equity shares, regardless of the timing or the probability of the redemption feature and may require the issuer to settle the obligation by transferring assets be classified as a liability. The Company measures the fair value of its warrant liability using the Black-Scholes option pricing model with changes in fair value recognized as increases or reductions to other income (expense) in the statement of operations. In connection with the completion of the Company’s initial public offering in May 2014, the warrants to purchase shares of Series A-1 and Series A-2 preferred stock expired unexercised and the warrants to purchase shares of Series C preferred stock automatically converted into warrants to purchase shares of common stock. Warrants with non-standard anti-dilution provisions (referred to as down round protection) are classified as liabilities and re-measured each reporting period. As of March 31, 2018, there were outstanding 62,505 warrants to purchase common stock at $6.00 per share. These warrants expire on December 14, 2019. The warrants issued in connection with the Company’s debt financing completed in February 2015 (see Note 6) are classified as a component of stockholders’ equity. The value of such warrants was determined using the Black-Scholes option-pricing model. As of March 31, 2018, there were outstanding 180,274 warrants to purchase common stock at $5.89 per share related to this debt financing. These warrants expire on February 24, 2020. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation . The Company grants stock options for a fixed number of shares to employees and non-employees with an exercise price equal to the fair value of the shares at grant date. Compensation cost is recognized for all share-based payments granted and is based on the grant-date fair value estimated using the weighted-average assumption of the Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility and expected term. The Company elects to account for forfeitures when they occur. The equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. The Company also awards restricted stock units (“RSUs”) to employees and its board of directors. RSUs are generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. Cost associated with performance-based restricted stock units with a performance condition which affects the vesting is recognized only if the performance condition is probable of being satisfied. Awards for consultants are accounted for under ASC 505-50, Equity Based Payments to Non-Employees . Any compensation expense related to consultants is marked-to-market over the applicable vesting period as they vest. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of diluted net loss per share calculation, common stock warrants, unvested RSUs and stock options are considered to be potentially dilutive securities but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the three months ended March 31, 2018 and 2017, respectively, because to do so would be anti-dilutive (in common equivalent shares): March 31, 2018 2017 Common stock warrants Unvested restricted stock units Common stock options Total Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures. On January 1, 2018, the Company adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers . Since the Company has not recognized any revenue to date, the adoption of ASC 606 did not have any impact on the Company’s financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company will be evaluating the impact of the pending adoption of the new standard on the Company’s financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. This ASU eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. ASU 2017-11 is effective for annual periods beginning after December 31, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2017-11 on its financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to change the terms or conditions of a share-based payment award. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This Update is the final version of Proposed ASU 2016-360—Compensation—Stock Compensation (Topic 718)—Scope of Modification Accounting, which has been deleted. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this ASU did not have a material impact on the Company’s financial statements.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures , describes the fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: · Level 1 — Quotes prices in active markets for identical assets and liabilities. The Company’s Level 1 assets consist of cash and cash equivalents. The Company has no Level 1 liabilities. · Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities. The Company has no Level 2 assets or liabilities. · Level 3 — Unobservable inputs that are supported by little or no market data and which require internal development of assumptions about how market participant price the fair value of the assets or liabilities. The Company has no Level 3 assets. The Company’s Level 3 liabilities consist of the warrant liability. The Company is required to mark the value of its warrant liability to market and recognize the change in valuation in its statements of operations each reporting period. The following table sets forth the Company’s financial instruments measured at fair value by level within the fair value hierarchy as of March 31, 2018 and December 31, 2017. Level 1 Level 2 Level 3 March 31, 2018 Assets: Cash and cash equivalents $ $ — $ — Total assets at fair value $ $ — $ — Liabilities: Common stock warrants $ — $ — $ Total liabilities at fair value $ — $ — $ Level 1 Level 2 Level 3 December 31, 2017 Assets: Cash and cash equivalents $ $ — $ — Total assets at fair value $ $ — $ — Liabilities: Common stock warrants $ — $ — $ Total liabilities at fair value $ — $ — $ The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of March 31, 2018 include (i) volatility (70.0%), (ii) risk free interest rate of 2.27% (estimated using treasury bonds with a 1.75 year life), (iii) strike price ($6.00) for the common stock warrants, (iv) fair value of common stock ($2.57) and (v) expected life (1.75 years). The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of December 31, 2017 include (i) volatility (70.0%), (ii) risk free interest rate of 1.89% (estimated using treasury bonds with a 2-year life), (iii) strike price ($6.00) for the common stock warrants, (iv) fair value of common stock ($2.69) and (v) expected life (2 years). The following is a rollforward of the fair value of Level 3 warrants: Beginning balance at December 31, 2015 $ Change in fair value ) Ending balance at December 31, 2016 Change in fair value ) Ending balance at December 31, 2017 Change in fair value ) Ending balance at March 31, 2018 $ There were no transfers between Level 1, 2 or 3 during 2018 or 2017. If the Company’s estimates regarding the fair value of its warrants are inaccurate, a future adjustment to these estimated fair values may be required. Additionally, these estimated fair values could change significantly.

Prepaid Expenses

Prepaid Expenses	3 Months Ended
	Mar. 31, 2018
Prepaid Expenses
Prepaid Expenses	4. Prepaid Expenses Prepaid expenses consist of the following: March 31, December 31, 2018 2017 Prepaid clinical trial expense $ $ Prepaid insurance Other Total prepaid expenses $ $

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2018
Accrued Liabilities
Accrued Liabilities	5. Accrued Liabilities Accrued liabilities consist of the following: March 31, December 31, 2018 2017 Employee bonuses $ $ Accrued interest payable Accrued professional fees and other Total accrued liabilities $ $

Loan and Security Agreements

Loan and Security Agreements	3 Months Ended
	Mar. 31, 2018
Loan and Security Agreements
Loan and Security Agreements	6. Loan and Security Agreements Oxford Finance LLC In December 2012, the Company entered into a Loan and Security Agreement (the “Oxford Loan”) with Oxford Finance LLC (“Oxford”) pursuant to which the Company borrowed a total of $15.0 million from Oxford. The Oxford Loan accrued interest at a fixed annual rate equal to 9.20% (three-month U.S. Libor rate of 0.47% plus 8.73%). Interest on the Oxford Loan was payable monthly, and principal was due in 30 equal consecutive monthly installments beginning on February 1, 2015 and ending on July 1, 2017. In addition, the Company was required to make a final payment of $675 on the maturity date of the Oxford Loan (July 1, 2017). In connection with the Oxford Loan, the Company issued Oxford warrants to purchase 62,505 shares of common stock at an exercise price of $6.00 per share. These warrants expire on December 14, 2019. In February 2015, the Company terminated and repaid all amounts outstanding under the Oxford Loan and recorded a loss on the extinguishment of the Oxford Loan (see further discussion below). Hercules Capital, Inc. In February 2015, the Company entered into a loan and security agreement (the “Hercules Loan Agreement”) with Hercules Capital, Inc. (“Hercules”) for a term loan of up to $25.0 million. In August 2016, the Company entered into the First Amendment to Loan and Security Agreement (the “First Amendment”) with Hercules which amended certain terms of the Hercules Loan Agreement. In May 2017, the Company entered into the Second Amendment to Loan and Security Agreement (the “Second Amendment”) with Hercules which further amended certain terms of the Hercules Loan Agreement. A first tranche of $16.5 million was funded upon execution of the Hercules Loan Agreement, approximately $15.5 million of which was used to repay the Company’s existing term loan with Oxford. The First Amendment extended the Company’s option to draw down the second tranche of $8.5 million (the “Second Term Loan Advance”) of the term loan facility provided under the Hercules Loan Agreement (the “Term Loan”) until March 31, 2017 and made the Second Term Loan Advance subject to the consent of Hercules, among other customary conditions. The Second Amendment further extended the Company’s option to draw the Second Term Loan Advance until January 31, 2018 and continued to make the Second Term Loan Advance subject to the consent of Hercules, among other customary conditions. The First Amendment also extended the interest-only payments until January 31, 2017, in connection with the first tranche of $16.5 million (the “First Term Loan Advance” and together with the Second Term Loan Advance, the “Term Loan Advances”). The Company is currently in discussions with Hercules to extend the period during which the additional tranche of $8.5 million may be drawn. The Company can make no assurances that its discussions will ultimately be successful and, if such discussions result in an extension of the periods in which the Company may draw the additional tranche of $8.5 million, the Company could incur additional fees to Hercules. The First Amendment provides the Term Loan will mature on December 1, 2018. As a result of the First Amendment, and in connection with the extension of the interest-only period from the First Term Loan Advance, Hercules returned to the Company the principal payments paid by the Company in July and August 2016, which such returned payments will once again constitute outstanding Term Loan advances under the Hercules Loan Agreement. In connection with the execution of the First Amendment, the Company paid Hercules a facility fee of $165. The facility fee represents a debt issue cost which is being reflected as a reduction to the carrying amount of loan payable in accordance with ASU 2015-03. Such issue costs are being amortized to interest expense over the life of the Term Loan using the effective interest method. As of March 31, 2018 and December 31, 2017, the Company had outstanding borrowings of $9.3 million and $10.9 million, respectively, related to the Hercules Loan Agreement which is recorded on the balance sheet in loan payable, current portion. The Term Loan accrues interest at a rate of the greater of 9.0% or 9.0% plus Prime minus 4.25% and is payable monthly. Principal is due in 23 consecutive monthly installments beginning on February 1, 2017 and ending on December 1, 2018. In addition, the Company is required to make a final payment of approximately $611 on the maturity date of the Term Loan (December 1, 2018). The amount of the end of term final payment is being accrued over the loan term as interest expense. The Company may prepay all, but not less than all, of the Term Loan subject to a prepayment premium of 1.0% of the outstanding principal. The obligations of the Company under the Hercules Loan Agreement are secured by a perfected first position lien on all of the assets of the Company, excluding intellectual property assets. In connection with the Hercules Loan Agreement, the Company issued Hercules a warrant to purchase 180,274 shares of the Company’s common stock at an exercise price of $5.89 per share which expires on February 24, 2020 and granted Hercules the right to participate in future equity financings in an amount up to $2.0 million while the loan and warrant are outstanding. The Company allocated the proceeds of $16.5 million in accordance with ASC 470 based on the relative fair values. The relative fair value of the warrants of approximately $1.2 million at the time of issuance, which was determined using the Black-Scholes option-pricing model, was recorded as additional paid-in capital and reduced the carrying value of the debt. The significant assumptions used in preparing the option pricing model for valuing the Company’s warrant issued to Hercules include (i) volatility (75.0%), (ii) risk free interest rate of 1.22% (estimated using treasury bonds with a 4-year life), (iii) strike price ($5.89) for the common stock warrant, (iv) fair value of common stock ($9.82) and (v) expected life (4 years). The discount on the debt is being amortized to interest expense over the term of the debt. Interest expense on the Hercules Loan Agreement including the accretion of the value of the related warrants, accrual of term loan back-end fee and amortization of the deferred financing costs was approximately $368 and $546, for the three months ended March 31, 2018 and 2017, respectively.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Stockholders' Equity	7. Stockholders’ Equity Shelf Registration Statement On June 19, 2015, the Company filed a universal shelf registration statement with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities and units up to an aggregate amount of $150.0 million (the “2015 Shelf Registration Statement”). On July 1, 2015, the 2015 Shelf Registration Statement was declared effective by the SEC. The Company completed offerings of common stock in both January 2016 and August 2017 utilizing the 2015 Shelf Registration Statement (see below). In the future, the Company may also periodically offer one or more of these securities in amounts, prices and terms to be announced when and if the securities are offered. At the time any of the securities covered by the 2015 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of any such offering. 2017 Public Offering of Common Stock In August 2017, the Company completed an underwritten public offering of 5,333,334 shares of its common stock at a public offering price of $3.75 per share. Proceeds from this offering, net of underwriting discounts, commissions and other offering costs were approximately $18.5 million. Performance Based Restricted Stock Awards In January 2018, the Company granted up to 365,000 shares of performance-based restricted stock units (“Performance Units”) under the Company’s 2014 Incentive Compensation Plan primarily to executive officers which are largely contingent upon the achievement of performance goals during the performance period beginning on the date of grant and ending on December 31, 2019 as set forth in each individual’s Performance Unit agreement. Performance Units granted in January 2018 replaced Performance Units granted in April 2017 which expired. Stock-Based Compensation Expense Stock-based compensation expense was allocated as follows: Three Months Ended March 31, 2018 2017 Research and development $ $ General and administrative Total $ $

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes
Income Taxes	8. Income Taxes Sale of New Jersey Net Operating Losses In January 2018, the Company received net proceeds of approximately $0.5 million in non-dilutive financing through the State of New Jersey’s Technology Business Tax Certificate Transfer Program (the “Program”). The Program enables approved biotechnology companies to sell their unused Net Operating Loss Carryovers and unused Research and Development Tax Credits for at least 80% of the value of the tax benefits to unaffiliated, profitable corporate taxpayers in the State of New Jersey. The New Jersey Economic Development Authority and the New Jersey Department of the Treasury’s Division of Taxation administer the Program. The Company intends to use the proceeds from the sale for working capital purposes. The Company has now reached the maximum lifetime benefit of $15.0 million under the Program and will no longer be eligible to participate in the Program.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	9. Commitments and Contingencies The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position. As of March 31, 2018, the Company has not recorded a provision for any contingent losses.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Use of Estimates	Use of Estimates The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for common stock warrants, stock-based compensation, income taxes, and accounting for research and development costs. Actual results could differ from those estimates.
Fair Value of Financial Instruments	Fair Value of Financial Instruments In accordance with Accounting Standards Codification (“ASC”) 825, Financial Instruments , disclosures of fair value information about financial instruments are required, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Cash and cash equivalents are carried at fair value (see Note 3). Other financial instruments, including accounts payable and accrued liabilities, are carried at cost, which approximates fair value given their short-term nature.
Warrants	Warrants The Company accounts for its warrants to purchase redeemable convertible stock in accordance with ASC 480, Distinguishing Liabilities from Equity . ASC 480 requires that a financial instrument, other than an outstanding share, that, at inception, is indexed to an obligation to repurchase the issuer’s equity shares, regardless of the timing or the probability of the redemption feature and may require the issuer to settle the obligation by transferring assets be classified as a liability. The Company measures the fair value of its warrant liability using the Black-Scholes option pricing model with changes in fair value recognized as increases or reductions to other income (expense) in the statement of operations. In connection with the completion of the Company’s initial public offering in May 2014, the warrants to purchase shares of Series A-1 and Series A-2 preferred stock expired unexercised and the warrants to purchase shares of Series C preferred stock automatically converted into warrants to purchase shares of common stock. Warrants with non-standard anti-dilution provisions (referred to as down round protection) are classified as liabilities and re-measured each reporting period. As of March 31, 2018, there were outstanding 62,505 warrants to purchase common stock at $6.00 per share. These warrants expire on December 14, 2019. The warrants issued in connection with the Company’s debt financing completed in February 2015 (see Note 6) are classified as a component of stockholders’ equity. The value of such warrants was determined using the Black-Scholes option-pricing model. As of March 31, 2018, there were outstanding 180,274 warrants to purchase common stock at $5.89 per share related to this debt financing. These warrants expire on February 24, 2020.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation . The Company grants stock options for a fixed number of shares to employees and non-employees with an exercise price equal to the fair value of the shares at grant date. Compensation cost is recognized for all share-based payments granted and is based on the grant-date fair value estimated using the weighted-average assumption of the Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility and expected term. The Company elects to account for forfeitures when they occur. The equity instrument is not considered to be issued until the instrument vests. As a result, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. The Company also awards restricted stock units (“RSUs”) to employees and its board of directors. RSUs are generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. Cost associated with performance-based restricted stock units with a performance condition which affects the vesting is recognized only if the performance condition is probable of being satisfied. Awards for consultants are accounted for under ASC 505-50, Equity Based Payments to Non-Employees . Any compensation expense related to consultants is marked-to-market over the applicable vesting period as they vest.
Net Loss Per Share	Net Loss Per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period determined using the treasury-stock and if-converted methods. For purposes of diluted net loss per share calculation, common stock warrants, unvested RSUs and stock options are considered to be potentially dilutive securities but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the three months ended March 31, 2018 and 2017, respectively, because to do so would be anti-dilutive (in common equivalent shares): March 31, 2018 2017 Common stock warrants Unvested restricted stock units Common stock options Total
Recent Accounting Pronouncements	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures. On January 1, 2018, the Company adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers . Since the Company has not recognized any revenue to date, the adoption of ASC 606 did not have any impact on the Company’s financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company will be evaluating the impact of the pending adoption of the new standard on the Company’s financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. This ASU eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. ASU 2017-11 is effective for annual periods beginning after December 31, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2017-11 on its financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to change the terms or conditions of a share-based payment award. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This Update is the final version of Proposed ASU 2016-360—Compensation—Stock Compensation (Topic 718)—Scope of Modification Accounting, which has been deleted. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this ASU did not have a material impact on the Company’s financial statements.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Schedule of outstanding potentially dilutive securities excluded from calculation of diluted net loss per share	The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the three months ended March 31, 2018 and 2017, respectively, because to do so would be anti-dilutive (in common equivalent shares): March 31, 2018 2017 Common stock warrants Unvested restricted stock units Common stock options Total

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Schedule of financial instruments measured at fair value by level within the fair value hierarchy	Level 1 Level 2 Level 3 March 31, 2018 Assets: Cash and cash equivalents $ $ — $ — Total assets at fair value $ $ — $ — Liabilities: Common stock warrants $ — $ — $ Total liabilities at fair value $ — $ — $ Level 1 Level 2 Level 3 December 31, 2017 Assets: Cash and cash equivalents $ $ — $ — Total assets at fair value $ $ — $ — Liabilities: Common stock warrants $ — $ — $ Total liabilities at fair value $ — $ — $
Schedule of rollforward of the fair value of Level 3 warrants	Beginning balance at December 31, 2015 $ Change in fair value ) Ending balance at December 31, 2016 Change in fair value ) Ending balance at December 31, 2017 Change in fair value ) Ending balance at March 31, 2018 $

Prepaid Expenses (Tables)

Prepaid Expenses (Tables)	3 Months Ended
	Mar. 31, 2018
Prepaid Expenses
Schedule of prepaid expenses	March 31, December 31, 2018 2017 Prepaid clinical trial expense $ $ Prepaid insurance Other Total prepaid expenses $ $

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Accrued Liabilities
Schedule of accrued liabilities	March 31, December 31, 2018 2017 Employee bonuses $ $ Accrued interest payable Accrued professional fees and other Total accrued liabilities $ $

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Schedule of allocation of stock-based compensation expense	Three Months Ended March 31, 2018 2017 Research and development $ $ General and administrative Total $ $

Organization and Description 21

Organization and Description of Business (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Organization and Description of Business
Product revenue	$ 0
Accumulated deficit	(228,605)	$ (221,772)
Cash and cash equivalents	$ 28,344	$ 35,952

Summary of Significant Accoun22

Summary of Significant Accounting Policies - Warrants (Details) - Common stock warrants - $ / shares	Mar. 31, 2018	Feb. 28, 2015	Dec. 31, 2012
Warrants | Oxford Finance LLC
Warrants
Common stock that can be purchased with warrants (in shares)	62,505		62,505
Exercise price of warrants (in dollars per share)	$ 6		$ 6
Warrants | Hercules Capital, Inc.
Warrants
Common stock that can be purchased with warrants (in shares)	180,274	180,274
Exercise price of warrants (in dollars per share)	$ 5.89	$ 5.89

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	5,404,032	4,136,166
Common stock warrants
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	242,779	242,779
Unvested restricted stock units
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	285,948	156,667
Common stock options
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares)	4,875,305	3,736,720

Fair Value Measurements - Finan

Fair Value Measurements - Financial Instruments Measured at Fair Value by Hierarchy Level and Significant Assumptions Used for Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Liabilities:
Common stock warrants	$ 22	$ 29
Recurring | Level 1
Assets:
Total assets at fair value	27,711	35,870
Recurring | Level 1 | Cash and cash equivalents
Assets:
Cash and cash equivalents	27,711	35,870
Recurring | Level 3
Liabilities:
Total liabilities at fair value	22	29
Recurring | Level 3 | Warrants | Common stock warrants
Liabilities:
Common stock warrants	$ 22	$ 29
Recurring | Level 3 | Warrants | Common stock warrants | Option pricing model
Significant assumptions used in preparing the option pricing model for valuing the Company's warrants
Volatility (as a percent)	70.00%	70.00%
Risk free interest rate (as a percent)	2.27%	1.89%
Life of treasury bonds	1 year 9 months	2 years
Strike price (in dollars per share)	$ 6	$ 6
Fair value of common stock (in dollars per share)	$ 2.57	$ 2.69
Expected life (in years)	1 year 9 months	2 years

Fair Value Measurements - Rollf

Fair Value Measurements - Rollforward of Fair Value of Level 3 Warrants and Transfers Between Levels (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair value measurements
Asset transfers out of Level 1 into Level 2	$ 0	$ 0
Asset transfers out of Level 2 into Level 1	0	0
Asset transfers into (out of) Level 3	0	0
Liability transfers out of Level 1 into Level 2	0	0
Liability transfers out of Level 2 into Level 1	0	0
Liability transfers into (out of) Level 3	0	0
Warrants | Liabilities
Rollforward of the fair value of Level 3 warrants:
Beginning balance	29,000	172,000	$ 406,000
Change in fair value	7,000	(143,000)	(234,000)
Ending balance	$ 22,000	$ 29,000	$ 172,000

Prepaid Expenses (Details)

Prepaid Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Prepaid Expenses
Prepaid clinical trial expense	$ 205	$ 205
Prepaid insurance	253	388
Other	175	169
Total prepaid expenses	$ 633	$ 762

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued Liabilities
Employee bonuses	$ 375	$ 215
Accrued interest payable	491	451
Accrued professional fees and other	264	186
Total accrued liabilities	$ 1,130	$ 852

Loan and Security Agreements -

Loan and Security Agreements - Oxford Loan and Hercules Loan (Details) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended
	Feb. 28, 2015USD ($)$ / sharesshares	Dec. 31, 2012USD ($)installment$ / sharesshares	Mar. 31, 2018USD ($)installment$ / sharesshares	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)	Aug. 31, 2016USD ($)
Loan and Security Agreements
Outstanding borrowings, current portion			$ 9,090		$ 10,607
Hercules Loan | Hercules Capital, Inc. | Equity financings | Right to participate in future equity financings | Maximum
Loan and Security Agreements
Equity financings amount	$ 2,000
Warrants | Common stock warrants | Hercules Capital, Inc.
Loan and Security Agreements
Common stock that can be purchased with warrants (in shares) | shares	180,274		180,274
Exercise price of warrants (in dollars per share) | $ / shares	$ 5.89		$ 5.89
Significant assumptions used in preparing the option pricing model for valuing the Company's warrants
Volatility (as a percent)	75.00%
Risk free interest rate (as a percent)	1.22%
Life of treasury bonds	4 years
Strike price (in dollars per share) | $ / shares	$ 5.89
Fair value of common stock (in dollars per share) | $ / shares	$ 9.82
Expected life (in years)	4 years
Additional Paid-in Capital | Hercules Capital, Inc.
Loan and Security Agreements
Fair value of common stock warrants issued with debt financing	$ 1,200
Warrants | Common stock warrants | Oxford Finance LLC
Loan and Security Agreements
Common stock that can be purchased with warrants (in shares) | shares		62,505	62,505
Exercise price of warrants (in dollars per share) | $ / shares		$ 6	$ 6
Secured debt
Loan and Security Agreements
Interest expense, including accretion of value of related warrants and amortization of deferred financing costs			$ 368,000	$ 546,000
Secured debt | Oxford Loan | Oxford Finance LLC
Loan and Security Agreements
Amount borrowed		$ 15,000
Fixed interest rate (as a percent)		9.20%
Number of consecutive monthly principal installments | installment		30
Final payment amount due		$ 675
Repayment of existing debt	15,500
Secured debt | Hercules Loan | Hercules Capital, Inc.
Loan and Security Agreements
Maximum borrowing capacity	25,000
Facility Fee						$ 165
Outstanding borrowings, current portion			$ 9,300		$ 10,900
Fixed interest rate (as a percent)			9.00%
Number of consecutive monthly principal installments | installment			23
Final payment amount due			$ 611
Prepayment premium as percentage of outstanding principal			1.00%
Discount on debt	1,200
Secured debt | Hercules Loan Tranche One | Hercules Capital, Inc.
Loan and Security Agreements
Amount borrowed	$ 16,500
Secured debt | Hercules Loan Tranche Two | Hercules Capital, Inc.
Loan and Security Agreements
Additional amount available			$ 8,500
Secured debt | LIBOR | Oxford Loan | Oxford Finance LLC
Loan and Security Agreements
Variable rate basis		three-month U.S. Libor
Reference rate (as a percent)		0.47%
Variable interest rate margin (as a percent)		8.73%
Secured debt | Prime | Hercules Loan | Hercules Capital, Inc.
Loan and Security Agreements
Variable rate basis			Prime minus 4.25%
Variable interest rate margin (as a percent)			9.00%
Variable rate adjustment (as a percent)			(4.25%)

Stockholders' Equity - Shelf Re

Stockholders' Equity - Shelf Registration Statement (Details) $ in Millions	Jun. 19, 2015USD ($)
2015 Shelf Registration
Sale of stock
Aggregate amount of securities issuable	$ 150

Stockholders' Equity - 2017 Pub

Stockholders' Equity - 2017 Public Offerings of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2017	Mar. 31, 2018
2017 Public Offering | Common Stock
Sale of stock
Shares issued (in shares)	5,333,334
Share price (in dollars per share)	$ 3.75
Proceeds from the issuance of common stock, net	$ 18.5
2014 Equity Incentive Plan | Performance-based vesting | Executive officers
Sale of stock
Granted (in shares)		365,000

Stockholders' Equity - Stock-Ba

Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock-Based Compensation Expense
Total stock-based compensation expense	$ 1,119	$ 835
Research and development
Stock-Based Compensation Expense
Total stock-based compensation expense	350	277
General and administrative
Stock-Based Compensation Expense
Total stock-based compensation expense	$ 769	$ 558

Income Taxes (Details)

Income Taxes (Details) - State - New Jersey - Sale of unused NOLs and research and development credits $ in Millions	1 Months Ended
	Jan. 31, 2018USD ($)
Sale of New Jersey Net Operating Losses
Net proceeds in non-dilutive financing	$ 0.5
Maximum lifetime benefit under the Program	$ 15
Minimum
Sale of New Jersey Net Operating Losses
Sale of unused Net Operating Loss Carryovers and unused Research and Development Tax Credits of the value of the tax benefits to unaffiliated (as a percent)	80.00%