Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | AGILE THERAPEUTICS INC | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 87,297,605 | |
Entity Central Index Key | 0001261249 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 39,446 | $ 34,479 |
Marketable securities | 47,789 | |
Prepaid expenses | 1,527 | 840 |
Total current assets | 88,762 | 35,319 |
Property and equipment, net | 14,208 | 14,044 |
Right of use and other assets | 94 | 177 |
Total assets | 103,064 | 49,540 |
Current liabilities: | ||
Accounts payable | 5,121 | 1,819 |
Accrued expenses | 1,290 | 1,804 |
Lease liability, current portion | 82 | 172 |
Total current liabilities | 6,493 | 3,795 |
Long-term debt | 15,775 | |
Total liabilities | 22,268 | 3,795 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity | ||
Common stock, $.0001 par value, 150,000,000 shares authorized, 87,297,605 and 69,810,305 issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 9 | 7 |
Additional paid-in capital | 359,856 | 306,108 |
Accumulated other comprehensive income | 10 | |
Accumulated deficit | (279,079) | (260,370) |
Total stockholders’ equity | 80,796 | 45,745 |
Total liabilities and stockholders’ equity | $ 103,064 | $ 49,540 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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) | 87,297,605 | 69,810,305 |
Common stock, outstanding (in shares) | 87,297,605 | 69,810,305 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating expenses: | ||||
Research and development | $ 3,661 | $ 1,779 | $ 6,825 | $ 4,660 |
General and administrative | 6,378 | 1,768 | 10,831 | 3,594 |
Total operating expenses | 10,039 | 3,547 | 17,656 | 8,254 |
Loss from operations | (10,039) | (3,547) | (17,656) | (8,254) |
Other income (expense) | ||||
Interest income | 115 | 63 | 247 | 101 |
Interest expense | (902) | (1,300) | ||
Total other income (expense), net | (787) | 63 | (1,053) | 101 |
Loss before benefit from income taxes | (10,826) | (3,484) | (18,709) | (8,153) |
Net loss | $ (10,826) | $ (3,484) | $ (18,709) | $ (8,153) |
Net loss per share (basic and diluted) (in dollars per share) | $ (0.12) | $ (0.08) | $ (0.23) | $ (0.20) |
Weighted-average common shares (basic and diluted) (in shares) | 87,221,441 | 43,776,549 | 81,936,815 | 40,560,259 |
Comprehensive loss: | ||||
Net loss | $ (10,826) | $ (3,484) | $ (18,709) | $ (8,153) |
Other comprehensive income: | ||||
Unrealized gain on marketable securities | 10 | 10 | ||
Comprehensive loss | $ (10,816) | $ (3,484) | $ (18,699) | $ (8,153) |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common StockPrivate Placement | Common StockAt-the-market sales | Common Stock | Additional Paid-in CapitalPrivate Placement | Additional Paid-in CapitalAt-the-market sales | Additional Paid-in Capital | AOCI Attributable to Parent [Member] | Accumulated DeficitPrivate Placement | Accumulated DeficitAt-the-market sales | Accumulated Deficit | Private Placement | At-the-market sales | Total |
Balance at Dec. 31, 2018 | $ 3 | $ 261,722 | $ (241,551) | $ 20,174 | |||||||||
Balance (in shares) at Dec. 31, 2018 | 34,377,329 | ||||||||||||
Increase (decrease) in stockholders' equity | |||||||||||||
Adjustment to derivative liabilities upon adoption of ASU 2017-11 | 213 | (213) | |||||||||||
Share-based compensation - stock options and RSUs | 490 | 490 | |||||||||||
Issuance of common stock | $ 1 | $ 7,809 | $ 860 | $ 7,810 | $ 860 | ||||||||
Issuance of common stock (in shares) | 8,426,750 | 665,974 | |||||||||||
Vesting of RSUs (in shares) | 145,204 | ||||||||||||
Net loss | (4,669) | (4,669) | |||||||||||
Balance at Mar. 31, 2019 | $ 4 | 271,094 | (246,433) | 24,665 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 43,615,257 | ||||||||||||
Balance at Dec. 31, 2018 | $ 3 | 261,722 | (241,551) | 20,174 | |||||||||
Balance (in shares) at Dec. 31, 2018 | 34,377,329 | ||||||||||||
Increase (decrease) in stockholders' equity | |||||||||||||
Issuance of common stock (in shares) | 1,658,046 | ||||||||||||
Net loss | $ (8,153) | ||||||||||||
Balance at Jun. 30, 2019 | $ 4 | 272,977 | (249,917) | 23,064 | |||||||||
Balance (in shares) at Jun. 30, 2019 | 44,632,329 | ||||||||||||
Balance at Mar. 31, 2019 | $ 4 | 271,094 | (246,433) | 24,665 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 43,615,257 | ||||||||||||
Increase (decrease) in stockholders' equity | |||||||||||||
Share-based compensation - stock options | 479 | 479 | |||||||||||
Issuance of common stock | $ 1,389 | $ 1,389 | |||||||||||
Issuance of common stock (in shares) | 992,072 | ||||||||||||
Issuance of common stock upon exercise of options | 15 | 15 | |||||||||||
Issuance of common stock upon exercise of options (in shares) | 25,000 | ||||||||||||
Net loss | (3,484) | (3,484) | (3,484) | ||||||||||
Balance at Jun. 30, 2019 | $ 4 | 272,977 | (249,917) | 23,064 | |||||||||
Balance (in shares) at Jun. 30, 2019 | 44,632,329 | ||||||||||||
Balance at Dec. 31, 2019 | $ 7 | 306,108 | (260,370) | 45,745 | |||||||||
Balance (in shares) at Dec. 31, 2019 | 69,810,305 | ||||||||||||
Increase (decrease) in stockholders' equity | |||||||||||||
Share-based compensation - stock options and RSUs | 621 | 621 | |||||||||||
Issuance of common stock | $ 2 | $ 48,433 | $ 48,435 | ||||||||||
Issuance of common stock (in shares) | 17,250,000 | ||||||||||||
Issuance of common stock upon exercise of options | 119 | 119 | |||||||||||
Issuance of common stock upon exercise of options (in shares) | 152,907 | ||||||||||||
Warrant discount | 3,570 | 3,570 | |||||||||||
Net loss | (7,883) | (7,883) | |||||||||||
Balance at Mar. 31, 2020 | $ 9 | 358,851 | (268,253) | 90,607 | |||||||||
Balance (in shares) at Mar. 31, 2020 | 87,213,212 | ||||||||||||
Balance at Dec. 31, 2019 | $ 7 | 306,108 | (260,370) | 45,745 | |||||||||
Balance (in shares) at Dec. 31, 2019 | 69,810,305 | ||||||||||||
Increase (decrease) in stockholders' equity | |||||||||||||
Unrealized gain on marketable securities | 10 | ||||||||||||
Net loss | (18,709) | ||||||||||||
Balance at Jun. 30, 2020 | $ 9 | 359,856 | 10 | (279,079) | 80,796 | ||||||||
Balance (in shares) at Jun. 30, 2020 | 87,297,605 | ||||||||||||
Balance at Mar. 31, 2020 | $ 9 | 358,851 | (268,253) | 90,607 | |||||||||
Balance (in shares) at Mar. 31, 2020 | 87,213,212 | ||||||||||||
Increase (decrease) in stockholders' equity | |||||||||||||
Share-based compensation - stock options and RSUs | 839 | 839 | |||||||||||
Issuance of common stock upon exercise of options | 166 | 166 | |||||||||||
Issuance of common stock upon exercise of options (in shares) | 84,393 | ||||||||||||
Unrealized gain on marketable securities | 10 | 10 | |||||||||||
Net loss | (10,826) | (10,826) | |||||||||||
Balance at Jun. 30, 2020 | $ 9 | $ 359,856 | $ 10 | $ (279,079) | $ 80,796 | ||||||||
Balance (in shares) at Jun. 30, 2020 | 87,297,605 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (18,709) | $ (8,153) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 8 | 10 |
Amortization | 82 | 71 |
Noncash stock-based compensation | 1,460 | 969 |
Noncash interest | 447 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (686) | 429 |
Accounts payable and accrued expenses | 2,839 | (590) |
Lease liability | (90) | (75) |
Net cash used in operating activities | (14,649) | (7,339) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (47,822) | |
Acquisition of property and equipment | (222) | |
Net cash used in investing activities | (48,044) | |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in private placement, net of offering costs | 7,810 | |
Proceeds from exercise of stock options | 285 | 15 |
Net cash provided by financing activities | 67,660 | 10,074 |
Net increase in cash and cash equivalents | 4,967 | 2,735 |
Cash and cash equivalents, beginning of period | 34,479 | 7,851 |
Cash and cash equivalents, end of period | 39,446 | 10,586 |
Supplemental disclosure of noncash financing activities | ||
Warrants issued in connection with long-term debt | 3,570 | |
Supplemental cash flow information | ||
Interest paid | 896 | |
At-the-market sales | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in public offering, net of offering costs | $ (2,249) | |
Proceeds from issuance of long-term debt | 20,000 | |
Public offering | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common stock in public offering, net of offering costs | 48,434 | |
Debt financing costs paid | $ (1,059) |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
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 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, including development of the Company’s lead product candidate. The Company is headquartered in Princeton, New Jersey. The Company’s sole approved product, Twirla®, also known as AG200 15, is a once weekly prescription contraceptive patch that received approval from the U.S. Food and Drug Administration, or FDA in February 2020. Substantially all of the Company’s resources are currently dedicated to commercializing Twirla in the United States. 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, but not limited to, dependence on key individuals, the difficulties and uncertainties inherent in the development of commercially usable products, market acceptance of products, protection of proprietary technology, the potential need to obtain additional capital necessary to fund the development of its products, competition from larger companies and compliance with the FDA and other government regulations. If the Company does not successfully commercialize any product candidates, it will be unable to generate recurring product revenue or achieve profitability. The Company has incurred operating losses and negative cash flows from operating activities each year since inception. As of June 30, 2020, the Company had an accumulated deficit of approximately $279 million. The Company expects to continue to incur significant expenses and increased operating losses for the foreseeable future and that its operating expenses will increase substantially in connection with its ongoing activities, as the Company: • • • • • 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 9), private placements of its convertible preferred stock, venture loans, and non-dilutive grant funding. Basis of Presentation The accompanying unaudited interim financial statements have been prepared by the Company 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 has 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, 2019 as filed with the SEC on February 20, 2020. In the opinion of management, the unaudited interim financial statements reflect all adjustments, which are normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results for the full fiscal year or any future period. The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses and negative cash flows from operations. Based on the Company’s current business plan and ability to launch Twirla, . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 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. Risks and Uncertainties While Twirla has been approved by the FDA, other potential product candidates developed by the Company will require approval from the FDA prior to commercial sales. There can be no assurance that the Company’s other product candidates will receive the required approval. If the Company is denied approval or such approval is delayed, or is unable to obtain the necessary financing to complete development and approval, there could be a material adverse impact on the Company’s financial condition and results of operations. It should be noted that current public health threats could adversely affect the Company’s ongoing or planned business operations. In particular, the World Health Organization has declared the outbreak of a novel strain of coronavirus, now referred to as COVID-19, a pandemic resulting in federal, state and local governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings, and stay at home orders. The effect of these orders, government imposed quarantines and measures the Company has taken, such as implementing work-at-home policies, may negatively impact productivity, disrupt the Company’s business and could delay the Company’s commercialization timeline. The Company cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if the Company or any of the third parties with whom it engages, including personnel at third-party manufacturing facilities and other third parties with whom the Company conducts business, were to experience shutdowns or other business disruptions, the Company’s ability to conduct its business in the manner and on the timeline presently planned could be materially and adversely impacted. While it is unknown how long these conditions will last and what the complete effect will be on the Company, to date, the Company has been able to continue to execute on its plans according to the related timelines. The Company will continue to closely monitor events as they develop and evaluate alternative, mitigating measures it can implement if needed. Cash and Cash Equivalents The Company considers all highly‑liquid investments with an original maturity of three months or less when purchased to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. Cash and cash equivalents include money market funds that invest primarily in commercial paper and U.S. government and U.S. government agency obligations. The Company maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation limit. Marketable Securities The Company invests a portion of its excess cash balances in marketable securities, including U.S. government agency securities, and highly rated corporate bonds. The Company classifies all of its marketable securities as current assets on the balance sheet because they are available-for-sale and available to fund current operations. Marketable securities are stated at fair value with unrealized gains and losses included as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders' equity, until such gains and losses are realized. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is reclassified from accumulated other comprehensive income (loss) to the statements of operations. Realized gains and losses are determined on the specific identification method and are included in other income. 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, cash equivalents, and marketable securities 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. Pre-Launch Validation Product The Company’s third-party manufacturer, Corium, is currently manufacturing three validation batches of Twirla. The costs associated with validation are being expensed as research and development expenses during the period the costs are incurred. If validation is successful, the Company plans to utilize this validation product for commercial supplies and samples of Twirla. The Company does not plan to capitalize any validation product. After validation is complete, the Company will capitalize commercial supplies as inventory on subsequent production. Property and Equipment Property and equipment, consisting of manufacturing, office and computer equipment, is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance, are charged to earnings in the period in which costs are incurred. Improvements and additions are capitalized in accordance with Company policy. Long-Lived Assets In accordance with ASC 360, Property, Plant and Equipment , the Company’s policy is to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management does not believe that there has been any impairment of the carrying value of any long-lived assets as of June 30, 2020. Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs related to personnel, including salaries and other personnel‑related expenses, expenses related to manufacturing, clinical trial expenses, consulting fees and support services used in drug development. All research and development costs are charged to operations as incurred in accordance with ASC 730, Research and Development . In certain circumstances, the Company is required to make advance payments to vendors for goods or services that will be received in the future for use in research and development activities. In such circumstances, the advance payments are deferred and are expensed when the activity has been performed or when the goods have been received. Deferred Financing Costs Costs directly attributable to the Company’s senior secured term loan (see Note 8) are deferred and reported as a reduction of the related term loan. These costs represent a 1% facility fee paid directly to the lender, legal fees and other costs related to the term loan and are being amortized over the term of the loan. Amortization of deferred financing costs charged to interest expense was approximately $69 and $92 for the three and six months ended June 30, 2020. Concentrations of Credit Risk Financial instruments which potentially subject the Company to credit risk consist principally of cash, cash equivalents and marketable securities. The Company invests its cash, cash equivalents and marketable securities in debt instruments and interest-bearing accounts in United States financial institutions, the balances of which exceed federally insured limits. The Company has not recognized any losses from credit risks on such accounts. The Company mitigates credit risk by limiting the investment type and maturity to securities that preserve capital, maintain liquidity and have a high credit quality. The Company has no financial instruments with off balance sheet risk of accounting loss. Warrants The Company accounts for its warrants to purchase common stock in accordance with ASC 480, Distinguishing Liabilities from Equity . On January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) 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 Non-controlling Interests with a Scope Exception, which indicate that a down round feature no longer precludes equity classification when assessing whether an investment is indexed to an entity’s own stock. The Company used a modified retrospective approach to adoption, which does not restate its financial statements as of the prior year end (December 31, 2018). The cumulative effect of adoption of ASU 2017-11 resulted in an adjustment to accumulated deficit as of January 1, 2019 of $213 with a corresponding adjustment to additional paid-in capital. The warrants issued in connection with the Company’s debt financing completed in February 2015 are classified as a component of stockholders’ equity. The value of such warrants was determined using the Black-Scholes option-pricing model. These warrants expired without being exercised on February 24, 2020. In connection with entering into a senior secured term loan facility in February 2020, the Company issued warrants to purchase 1,400,000 shares of its common stock. These warrant instruments qualify for equity classification and have been allocated based upon the relative fair value of the base instrument and the warrant. See Note 8 for additional information. Income Taxes The Company accounts for deferred taxes using the asset and liability method as specified by ASC 740, Income Taxes . Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and the tax basis of assets and liabilities, operating losses and tax credit carryforwards. Deferred income taxes are measured using the enacted tax rates and laws that are anticipated to be in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits which are not expected to be realized. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The Company has adopted the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company has no uncertain tax positions as of June 30, 2020 that qualify for either recognition or disclosure in the financial statements under this guidance. 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 no less than 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. 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 the 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 and six months ended June 30, 2020 and 2019, respectively, because to do so would be anti-dilutive (in common equivalent shares): June 30, 2020 2019 Common stock warrants 1,400,000 242,779 Unvested restricted stock units 159,795 — Common stock options 8,503,254 7,526,820 Total 10,063,049 7,769,599 Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”), which amends the impairment model by requiring entities to use a forward‑looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016‑13 was adopted by the Company on January 1, 2020 and has no current impact on the Company as we do not have any financial instruments covered by the topic. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
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 — Quoted prices in active markets for identical assets or 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. Level 2 assets consist of marketable securities. The Company has no Level 2 liabilities. · Level 3 — Unobservable inputs that are supported by little or no market data and which require internal development of assumptions about how market participants price the fair value of the assets or liabilities. The Company has no Level 3 assets or liabilities. The following table sets forth the Company’s financial instruments measured at fair value by level within the fair value hierarchy as of June 30, 2020 and December 31, 2019. Level 1 Level 2 Level 3 June 30, 2020 Assets: Cash and cash equivalents $ 39,446 $ — $ — Marketable securities — 47,789 — Total assets at fair value $ 39,446 $ 47,789 $ — Level 1 Level 2 Level 3 December 31, 2019 Assets: Cash and cash equivalents $ 34,479 $ — $ — Total assets at fair value $ 34,479 $ — $ — There were no transfers between Level 1, 2 or 3 during 2020 or 2019. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2020 | |
Marketable Securities | |
Marketable Securities | 4. Marketable Securities The following is a summary of marketable securities, classified as available-for-sale: Gross Unrealized Amortized Fair Cost Gains Losses Value June 30, 2020 U.S. government obligations (maturing in one year or less) $ 4,073 $ — $ — $ 4,073 Corporate debt securities (maturing in one year or less) 43,706 10 43,716 Total marketable securities $ 47,779 $ 10 $ — $ 47,789 The Company holds investment-grade marketable securities, and none were in a continuous unrealized loss position for more than twelve months as of June 30, 2020. Marketable securities include $0.2 million of accrued interest at June 30, 2020. |
Prepaid Expenses
Prepaid Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid Expenses | |
Prepaid Expenses | 5 . Prepaid Expenses Prepaid expenses consist of the following: June 30, December 31, 2020 2019 Prepaid insurance $ 1,289 $ 656 Other 238 184 Total prepaid expenses $ 1,527 $ 840 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities | |
Accrued Liabilities | 6 . Accrued Liabilities Accrued liabilities consist of the following: June 30, December 31, 2020 2019 Employee bonuses $ 674 $ 1,437 Accrued professional fees and other 616 367 Total accrued liabilities $ 1,290 $ 1,804 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Leases | 7 . Leases 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 are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The Company adopted ASU No. 2016-02 on January 1, 2019. The Company recorded a lease asset and lease liability of approximately $0.3 million on its balance sheet as of January 1, 2019, with no material impact on its statement of operations. The Company has no finance leases and one operating lease for office space in Princeton, NJ. Operating lease expense was $48 and $96 for the three and six months ended June 30, 2020. Operating cash flows used for operating leases during the three and six months ended June 30, 2020 were $46 and $90, respectively. As of June 30, 2020, the weighted-average remaining lease term was 0.42 years and the weighted average discount rate was 21.2%. Future minimum lease payments under non-cancellable leases as of June 30, 2020 were as follows: Remainder of 2020 $ 86 Total $ 86 Less: Interest (4) Present value of lease liability $ 82 |
Credit Agreement and Guaranty
Credit Agreement and Guaranty | 6 Months Ended |
Jun. 30, 2020 | |
Credit Agreement and Guaranty | |
Credit Agreement and Guaranty | 8 . Credit Agreement and Guaranty On February 10, 2020 (the “Closing Date”), the Company entered into a Credit Agreement and Guaranty with Perceptive Credit Holdings III, LP, a related party (“Perceptive”), for a senior secured term loan credit facility of up to $35.0 million, (the “Perceptive Credit Agreement”). A first tranche of $5.0 million was funded on execution of the Perceptive Credit Agreement. A second tranche of $15.0 million was funded as a result of the approval of Twirla by the FDA. Another $15.0 million tranche will be available to the Company based on the achievement of certain revenue milestones. The facility will mature on February 10, 2024 (“Maturity Date”). The Company is scheduled to make interest-only payments on the loans under the Perceptive Credit Agreement until February 10, 2023. Thereafter, the Company is required to make monthly principal payments in an amount equal to 1.50% of the principal amount of the outstanding loans until February 10, 2024. Borrowings under the Perceptive Credit Agreement will accrue interest at an annual rate equal to the London Interbank Offered Rate for one-month deposits (“LIBOR”) plus 10.25%, provided that LIBOR shall not be less than 1.5%. The rate of interest in effect as of the Closing Date and at June 30, 2020 was 11.75%. Upon the occurrence and during the continuance of any event of default under the Perceptive Credit Agreement, the interest rate automatically increases by 3.0% per annum. The Company may prepay any outstanding loans in whole or in part. Any such prepayment of the loans is subject to a prepayment fee of 10.0% if such prepayment occurs on or prior to February 10, 2021; 8.0% if such prepayment occurs after February 10, 2021 and on or prior to February 10, 2022; 4.0% if such prepayment occurs after February 10, 2022 and on or prior to February 10, 2023; and 2.0% if such prepayment occurs after February 10, 2023 and prior to February 10, 2024. All of the Company’s obligations under the Perceptive Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible and intangible assets, including intellectual property. The Perceptive Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customary for similar financings. The negative covenants restrict or limit the ability of the Company to, among other things and subject to certain exceptions contained in the Perceptive Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s business activities; make certain investments or restricted payments (each as defined in the Perceptive Credit Agreement); change its fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Perceptive Credit Agreement. In addition, the Company must (i) at all times prior to the Maturity Date maintain a minimum cash balance of $3.0 million; and (ii) as of the last day of each fiscal quarter commencing with the fiscal quarter ending March 31, 2021, report revenues for the trailing 12-month period that exceed the amounts set forth in the Perceptive Credit Agreement, which range from $3.8 million for the fiscal quarter ending March 31, 2021 to $93.5 million for the fiscal quarter ending December 31, 2023. At June 30, 2020, the Company was in compliance with all of the covenants contained in the Perceptive Credit Agreement. In connection with the Perceptive Credit Agreement, the Company issued to Perceptive two warrants to purchase an aggregate of 1,400,000 shares of the Company’s common stock (together, the “Perceptive Warrants”). The first warrant is exercisable for 700,000 shares of common stock at an exercise price of $3.74 per share. The second warrant is exercisable for 700,000 shares of common stock at an exercise price of $4.67 per share. The Perceptive Warrants contain anti-dilution provisions and other warrant holder protections. The Perceptive Warrants are not exercisable to the extent that Perceptive would beneficially own more than 19.99% of the Company’s common stock as a result of the exercise. The Perceptive Warrants expire on February 10, 2027. The Company allocated the proceeds of $20.0 million in accordance with ASC 470 based on the relative fair values of the debt and warrants. The relative fair value of the warrants of approximately $3.6 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 warrants issued to Perceptive include (i) volatility (70.0%), (ii) risk free interest rate of 1.47% (estimated using treasury bonds with a 3-year life), (iii) strike prices of $3.74 and $4.67 for the common stock warrants, (iv) fair value of common stock ($4.01) and (v) expected life (7 years). The fair value of the warrants as well as the debt issue costs incurred in connection with the entry into the Perceptive Credit Agreement, including a facility fee of 1% of the total amount of loans available under the facility, are presented as a direct deduction from the carrying amount of the term loan on the consolidated balance sheet as detailed below. June 30, 2020 Notes payable $ 20,000 Debt issuance costs (967) Warrant discount (3,258) Long-term debt $ 15,775 The fair value of the warrants and the debt issue costs are being amortized utilizing the effective interest method over the term of the loan. The Company recorded interest expense for the amortization of the fair value of the warrants and debt issue costs of $303 and $404 for the three and six months ended June 30, 2020. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 9 . Stockholders’ Equity Shelf Registration Statement On November 2, 2018, 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 $100.0 million (the “2018 Shelf Registration Statement”). On November 14, 2018, the 2018 Shelf Registration Statement was declared effective by the SEC. In the future, the Company may 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 2018 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. Public Offerings In February 2020, the Company completed a public offering of 17,250,000 shares of its common stock at a price of $3.00 per share. Proceeds from the public offering, net of underwriting discounts, commissions and offering expenses were approximately $48.4 million. In August 2019, the Company completed a public offering of 14,526,315 shares of its common stock at a price of $0.95 per share. Proceeds from the public offering, net of underwriting discounts, commissions and offering expenses were approximately $12.7 million. Private Placement In March 2019, the Company completed a private placement of 8,426,750 shares of common stock at $0.93 per share. Proceeds from the Company’s private placement, net of offering costs were approximately $7.8 million. ATM Sales Agreement In January 2019, the Company entered into a common stock sales agreement (the “Sales Agreement”) under which the Company may sell up to an aggregate of $10.0 million in gross proceeds through the sale of shares of common stock from time to time in “at-the-market” equity offerings (as defined in Rule 415 promulgated under the Securities Act of 1933, as amended). The Company agreed to pay a commission of 3% of the gross proceeds of any common stock sold under the Sales Agreement. During the three months ended June 30, 2019, the Company issued and sold 992,072 shares of common stock under the Sales Agreement resulting in net proceeds to the Company of approximately $1.4 million. During the six months ended June 30, 2019, the Company issued and sold 1,658,046 shares of common stock under the Sales Agreement resulting in net proceeds to the Company of approximately $2.2 million. The Company terminated the Sales Agreement on July 31, 2019. Stock-Based Compensation Expense Stock-based compensation expense was allocated as follows: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Research and development $ $ 159 $ 337 $ 310 General and administrative 320 1,123 659 Total $ $ $ 1,460 $ |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income | 10. Accumulated Other Comprehensive Income The change in accumulated other comprehensive income, which is reported as a component of stockholders’ equity, for the six months ended June 30, 2020 is summarized below: Unrealized Gain on Marketable Securities Balance at December 31, 2019 $ — Other comprehensive income 10 Balance at June 30, 2020 $ 10 No amounts were classified out of accumulated other comprehensive income during the six months ended June 30, 2020. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Income Taxes | 11. Income Taxes On March 27, 2020, the US government enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which includes numerous modifications to income tax provisions, including a limitation on business interest expense and net operating loss provisions and the acceleration of alternative minimum tax credits. Given the Company’s history of losses, the CARES Act is not expected to have a material impact on its income tax provision. |
2019 Retention Plan
2019 Retention Plan | 6 Months Ended |
Jun. 30, 2020 | |
2019 Retention Plan | |
2019 Retention Plan | 12. 2019 Retention Plan In July 2019, the Company adopted a retention plan (the “2019 Retention Plan”) for all employees (with the exception of the Chairman and Chief Executive Officer) in order to induce such employees to remain employed by the Company through at least the extended PDUFA goal date of February 14, 2020. Each employee who participated in the 2019 Retention Plan and remained continuously employed by the Company through the approval of Twirla was to be paid a lump-sum cash payment in an amount determined for each eligible employee by the Compensation Committee at the time of the adoption of the 2019 Retention Plan. If an eligible employee terminated employment prior to the approval for any reason, no such retention payment was payable to the eligible employee. With the approval of Twirla in February, the cash portion of the 2019 Retention Plan in the amount of approximately $0.3 million was expensed and paid to each eligible employee in February 2020. All employees (with the exception of the Chairman and Chief Executive Officer) who were employed by the Company as of July 3, 2019 were also granted a stock option to purchase the number of shares of common stock as approved by the Compensation Committee, with a per share exercise price of $1.48, representing the closing price of the Company’s common stock as reported by Nasdaq on the date of grant. For each option, 50% of the option vested on July 3, 2020 and the remaining 50% will vest on December 31, 2020. In addition, the vesting schedule for the stock options granted in January 2019 was amended for all employees (with the exception of the Chairman and Chief Executive Officer) holding such options who were employed on July 3, 2019 as follows: 50% of the option vested on January 29, 2020, 25% vested on June 30, 2020 and the remaining 25% will vest on December 31, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies The Company has several firm purchase commitments, primarily related to the manufacture and supply of Twirla and the supply of a field force of sales representatives to provide certain detailing services, sales operation services, compliance services, and training services. Future firm purchase commitments under these agreements, the last of which ends in 2030, total $16.1 million. This amount does not represent all of the Company’s anticipated purchases in the future, but instead represents only purchases that are the subject of contractually obligated minimum purchases. The minimum commitments disclosed are determined based on non-cancelable minimum spend into 2021or termination amounts. Additionally, the Company purchases products and services as needed with no firm commitment. 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 June 30, 2020, the Company has not recorded a provision for any contingent losses. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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. |
Risks and Uncertainties | Risks and Uncertainties While Twirla has been approved by the FDA, other potential product candidates developed by the Company will require approval from the FDA prior to commercial sales. There can be no assurance that the Company’s other product candidates will receive the required approval. If the Company is denied approval or such approval is delayed, or is unable to obtain the necessary financing to complete development and approval, there could be a material adverse impact on the Company’s financial condition and results of operations. It should be noted that current public health threats could adversely affect the Company’s ongoing or planned business operations. In particular, the World Health Organization has declared the outbreak of a novel strain of coronavirus, now referred to as COVID-19, a pandemic resulting in federal, state and local governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings, and stay at home orders. The effect of these orders, government imposed quarantines and measures the Company has taken, such as implementing work-at-home policies, may negatively impact productivity, disrupt the Company’s business and could delay the Company’s commercialization timeline. The Company cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if the Company or any of the third parties with whom it engages, including personnel at third-party manufacturing facilities and other third parties with whom the Company conducts business, were to experience shutdowns or other business disruptions, the Company’s ability to conduct its business in the manner and on the timeline presently planned could be materially and adversely impacted. While it is unknown how long these conditions will last and what the complete effect will be on the Company, to date, the Company has been able to continue to execute on its plans according to the related timelines. The Company will continue to closely monitor events as they develop and evaluate alternative, mitigating measures it can implement if needed. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly‑liquid investments with an original maturity of three months or less when purchased to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. Cash and cash equivalents include money market funds that invest primarily in commercial paper and U.S. government and U.S. government agency obligations. The Company maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation limit. |
Marketable Securities | Marketable Securities The Company invests a portion of its excess cash balances in marketable securities, including U.S. government agency securities, and highly rated corporate bonds. The Company classifies all of its marketable securities as current assets on the balance sheet because they are available-for-sale and available to fund current operations. Marketable securities are stated at fair value with unrealized gains and losses included as a component of accumulated other comprehensive income (loss), which is a separate component of stockholders' equity, until such gains and losses are realized. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is reclassified from accumulated other comprehensive income (loss) to the statements of operations. Realized gains and losses are determined on the specific identification method and are included in other income. |
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, cash equivalents, and marketable securities 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. |
Pre-Launch Inventory | Pre-Launch Validation Product The Company’s third-party manufacturer, Corium, is currently manufacturing three validation batches of Twirla. The costs associated with validation are being expensed as research and development expenses during the period the costs are incurred. If validation is successful, the Company plans to utilize this validation product for commercial supplies and samples of Twirla. The Company does not plan to capitalize any validation product. After validation is complete, the Company will capitalize commercial supplies as inventory on subsequent production. |
Property and Equipment | Property and Equipment Property and equipment, consisting of manufacturing, office and computer equipment, is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance, are charged to earnings in the period in which costs are incurred. Improvements and additions are capitalized in accordance with Company policy. |
Long-Lived Assets | Long-Lived Assets In accordance with ASC 360, Property, Plant and Equipment , the Company’s policy is to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management does not believe that there has been any impairment of the carrying value of any long-lived assets as of June 30, 2020. |
Research and Development Expense | Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs related to personnel, including salaries and other personnel‑related expenses, expenses related to manufacturing, clinical trial expenses, consulting fees and support services used in drug development. All research and development costs are charged to operations as incurred in accordance with ASC 730, Research and Development . In certain circumstances, the Company is required to make advance payments to vendors for goods or services that will be received in the future for use in research and development activities. In such circumstances, the advance payments are deferred and are expensed when the activity has been performed or when the goods have been received. |
Deferred Financing Costs | Deferred Financing Costs Costs directly attributable to the Company’s senior secured term loan (see Note 8) are deferred and reported as a reduction of the related term loan. These costs represent a 1% facility fee paid directly to the lender, legal fees and other costs related to the term loan and are being amortized over the term of the loan. Amortization of deferred financing costs charged to interest expense was approximately $69 and $92 for the three and six months ended June 30, 2020. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments which potentially subject the Company to credit risk consist principally of cash, cash equivalents and marketable securities. The Company invests its cash, cash equivalents and marketable securities in debt instruments and interest-bearing accounts in United States financial institutions, the balances of which exceed federally insured limits. The Company has not recognized any losses from credit risks on such accounts. The Company mitigates credit risk by limiting the investment type and maturity to securities that preserve capital, maintain liquidity and have a high credit quality. The Company has no financial instruments with off balance sheet risk of accounting loss. |
Warrants | Warrants The Company accounts for its warrants to purchase common stock in accordance with ASC 480, Distinguishing Liabilities from Equity . On January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) 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 Non-controlling Interests with a Scope Exception, which indicate that a down round feature no longer precludes equity classification when assessing whether an investment is indexed to an entity’s own stock. The Company used a modified retrospective approach to adoption, which does not restate its financial statements as of the prior year end (December 31, 2018). The cumulative effect of adoption of ASU 2017-11 resulted in an adjustment to accumulated deficit as of January 1, 2019 of $213 with a corresponding adjustment to additional paid-in capital. The warrants issued in connection with the Company’s debt financing completed in February 2015 are classified as a component of stockholders’ equity. The value of such warrants was determined using the Black-Scholes option-pricing model. These warrants expired without being exercised on February 24, 2020. In connection with entering into a senior secured term loan facility in February 2020, the Company issued warrants to purchase 1,400,000 shares of its common stock. These warrant instruments qualify for equity classification and have been allocated based upon the relative fair value of the base instrument and the warrant. See Note 8 for additional information. |
Income Taxes | Income Taxes The Company accounts for deferred taxes using the asset and liability method as specified by ASC 740, Income Taxes . Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and the tax basis of assets and liabilities, operating losses and tax credit carryforwards. Deferred income taxes are measured using the enacted tax rates and laws that are anticipated to be in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits which are not expected to be realized. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The Company has adopted the authoritative guidance on accounting for and disclosure of uncertainty in tax positions which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company has no uncertain tax positions as of June 30, 2020 that qualify for either recognition or disclosure in the financial statements under this guidance. |
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 no less than 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. |
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 the 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 and six months ended June 30, 2020 and 2019, respectively, because to do so would be anti-dilutive (in common equivalent shares): June 30, 2020 2019 Common stock warrants 1,400,000 242,779 Unvested restricted stock units 159,795 — Common stock options 8,503,254 7,526,820 Total 10,063,049 7,769,599 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”), which amends the impairment model by requiring entities to use a forward‑looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016‑13 was adopted by the Company on January 1, 2020 and has no current impact on the Company as we do not have any financial instruments covered by the topic. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 and six months ended June 30, 2020 and 2019, respectively, because to do so would be anti-dilutive (in common equivalent shares): June 30, 2020 2019 Common stock warrants 1,400,000 242,779 Unvested restricted stock units 159,795 — Common stock options 8,503,254 7,526,820 Total 10,063,049 7,769,599 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Schedule of financial instruments measured at fair value by level within the fair value hierarchy | Level 1 Level 2 Level 3 June 30, 2020 Assets: Cash and cash equivalents $ 39,446 $ — $ — Marketable securities — 47,789 — Total assets at fair value $ 39,446 $ 47,789 $ — Level 1 Level 2 Level 3 December 31, 2019 Assets: Cash and cash equivalents $ 34,479 $ — $ — Total assets at fair value $ 34,479 $ — $ — |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Marketable Securities | |
Summary of marketable securities, classified as available-for-sale | Gross Unrealized Amortized Fair Cost Gains Losses Value June 30, 2020 U.S. government obligations (maturing in one year or less) $ 4,073 $ — $ — $ 4,073 Corporate debt securities (maturing in one year or less) 43,706 10 43,716 Total marketable securities $ 47,779 $ 10 $ — $ 47,789 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid Expenses | |
Schedule of prepaid expenses | June 30, December 31, 2020 2019 Prepaid insurance $ 1,289 $ 656 Other 238 184 Total prepaid expenses $ 1,527 $ 840 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities | |
Schedule of accrued liabilities | June 30, December 31, 2020 2019 Employee bonuses $ 674 $ 1,437 Accrued professional fees and other 616 367 Total accrued liabilities $ 1,290 $ 1,804 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Maturity of lease liabilities | Future minimum lease payments under non-cancellable leases as of June 30, 2020 were as follows: Remainder of 2020 $ 86 Total $ 86 Less: Interest (4) Present value of lease liability $ 82 |
Credit Agreement and Guaranty (
Credit Agreement and Guaranty (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Credit Agreement and Guaranty | |
Schedule of carrying amount of term loan | June 30, 2020 Notes payable $ 20,000 Debt issuance costs (967) Warrant discount (3,258) Long-term debt $ 15,775 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity | |
Schedule of allocation of stock-based compensation expense | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Research and development $ $ 159 $ 337 $ 310 General and administrative 320 1,123 659 Total $ $ $ 1,460 $ |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income | |
Schedule of change in accumulated other comprehensive income, which is reported as a component of stockholders’ equity | Unrealized Gain on Marketable Securities Balance at December 31, 2019 $ — Other comprehensive income 10 Balance at June 30, 2020 $ 10 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Organization and Description of Business | ||
Accumulated deficit | $ (279,079) | $ (260,370) |
Cash and cash equivalents | $ 39,446 | $ 34,479 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Deferred Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Deferred Financing Costs | ||
Facility fee percentage | 1.00% | |
Interest expense [Member] | ||
Deferred Financing Costs | ||
Amortization of deferred financing costs | $ 69 | $ 92 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Warrants (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Mar. 31, 2019 | Feb. 29, 2020 |
Common stock warrants | |||
Warrants | |||
Common stock that can be purchased with warrants (in shares) | 1,400,000 | ||
Additional Paid-in Capital | |||
Warrants | |||
Cumulative effect adjustment | $ 213 | ||
ASU 2017-11 | Adjustment | Additional Paid-in Capital | |||
Warrants | |||
Cumulative effect adjustment | $ 213 | ||
ASU 2017-11 | Adjustment | Accumulated Deficit | |||
Warrants | |||
Cumulative effect adjustment | $ (213) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Income Taxes (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Uncertainty in tax positions | |
Uncertain tax positions | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Net Loss Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 10,063,049 | 7,769,599 |
Common stock warrants | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 1,400,000 | 242,779 |
Restricted Stock Units | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 159,795 | |
Common stock options | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 8,503,254 | 7,526,820 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Measured at Fair Value by Hierarchy Level (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | $ 39,446 | $ 34,479 |
Total assets at fair value | 39,446 | $ 34,479 |
Level 2 | ||
Assets: | ||
Marketable securities | 47,789 | |
Total assets at fair value | $ 47,789 |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers Between Levels (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
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 |
Marketable Securities (Details)
Marketable Securities (Details) $ in Thousands | Jun. 30, 2020USD ($)security |
Marketable Securities [Line Items] | |
Amortized Cost (maturing in one year or less) | $ 47,779 |
Gross Unrealized Gain (maturing in one year or less) | 10 |
Fair Value (maturing in one year or less) | $ 47,789 |
Investment-grade marketable securities in a continuous unrealized loss position for more than twelve months | security | 0 |
Accrued interest | $ 200 |
U.S. government obligations | |
Marketable Securities [Line Items] | |
Amortized Cost (maturing in one year or less) | 4,073 |
Fair Value (maturing in one year or less) | 4,073 |
Corporate debt securities | |
Marketable Securities [Line Items] | |
Amortized Cost (maturing in one year or less) | 43,706 |
Gross Unrealized Gain (maturing in one year or less) | 10 |
Fair Value (maturing in one year or less) | $ 43,716 |
Prepaid Expenses (Details)
Prepaid Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Prepaid Expenses | ||
Prepaid insurance | $ 1,289 | $ 656 |
Other | 238 | 184 |
Total prepaid expenses | $ 1,527 | $ 840 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities | ||
Employee bonuses | $ 674 | $ 1,437 |
Accrued professional fees and other | 616 | 367 |
Total accrued liabilities | $ 1,290 | $ 1,804 |
Leases - Summary (Details)
Leases - Summary (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)lease | Jun. 30, 2020USD ($)lease | Jun. 30, 2019USD ($) | Jan. 01, 2019USD ($) | |
Leases | ||||
Present value of lease liability | $ 82 | $ 82 | ||
Number of finance leases | lease | 0 | 0 | ||
Number of operating leases | lease | 1 | 1 | ||
Operating lease expense | $ 48 | $ 96 | ||
Operating lease expense information: | ||||
Cash paid for amounts included in measurement of lease liabilities | $ 46 | $ 90 | $ 75 | |
Weighted-average remaining lease term (years) | 5 months 1 day | 5 months 1 day | ||
Weighted-average discount rate | 21.20% | 21.20% | ||
ASU 2016-02 | Adjustment | ||||
Leases | ||||
Lease assets | $ 300 | |||
Present value of lease liability | $ 300 |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Operating Leases | |
Remainder of 2019 | $ 86 |
Total | 86 |
Less: Interest | (4) |
Present value of lease liability | $ 82 |
Credit Agreement and Guaranty_2
Credit Agreement and Guaranty (Details) $ / shares in Units, $ in Millions | Feb. 10, 2020USD ($)itemY$ / sharesshares | Dec. 31, 2023USD ($) | Mar. 31, 2021USD ($) | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||||
Interest rate (as a percent) | 11.75% | |||
Percentage of annual interest rate | 3.00% | |||
Proceeds from warrant exercises | $ 20 | |||
Fair value of warrants | $ 3.6 | |||
Warrants, Measurement Input | Y | 3 | |||
Facility fee percentage | 1.00% | |||
Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Percentage of outstanding debt | 1.50% | |||
Minimum cash covenants | $ 3 | |||
Revenue generated under debt | $ 93.5 | $ 3.8 | ||
Perceptive Credit Agreement | Perceptive Warrants | ||||
Debt Instrument [Line Items] | ||||
Common stock that can be purchased with warrants (in shares) | shares | 1,400,000 | |||
Beneficial ownership percentage | 19.99% | |||
Facility fee percentage | 1.00% | |||
Perceptive Credit Agreement | First Seven Lakhs Shares | ||||
Debt Instrument [Line Items] | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.74 | |||
Common stock that can be purchased with warrants (in shares) | shares | 700,000 | |||
Perceptive Credit Agreement | Remaining Seven Lakhs Shares | ||||
Debt Instrument [Line Items] | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4.67 | |||
Common stock that can be purchased with warrants (in shares) | shares | 700,000 | |||
Senior secured delayed draw term loan facility | Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 35 | |||
Senior secured delayed draw term loan facility | Perceptive Credit Agreement, Tranche One | ||||
Debt Instrument [Line Items] | ||||
Amount borrowed | 5 | |||
Senior secured delayed draw term loan facility | Perceptive Credit Agreement, Tranche Two | ||||
Debt Instrument [Line Items] | ||||
Amount borrowed | 15 | |||
Senior secured delayed draw term loan facility | Perceptive Credit Agreement, Tranche Three | ||||
Debt Instrument [Line Items] | ||||
Additional amount available | $ 15 | |||
LIBOR | Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate margin (as a percent) | 10.25% | |||
Interest rate for the base rate | 1.50% | |||
Prepayment Occur on or Before February, 10, 2021 | Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee percent | 10.00% | |||
Prepayment Occur on or Before February, 10, 2022 | Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee percent | 8.00% | |||
Prepayment Occur on or Before February, 10, 2023 | Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee percent | 4.00% | |||
Prepayment Occur on or Before February, 10, 2024 | Perceptive Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee percent | 2.00% | |||
Option pricing model | Common stock warrants | Perceptive Warrants | ||||
Debt Instrument [Line Items] | ||||
Warrants and rights outstanding, term | 7 years | |||
Option pricing model | Common stock warrants | Perceptive Warrants | Volatility | ||||
Debt Instrument [Line Items] | ||||
Warrants, Measurement Input | item | 0.700 | |||
Option pricing model | Common stock warrants | Perceptive Warrants | Risk free interest rate | ||||
Debt Instrument [Line Items] | ||||
Warrants, Measurement Input | item | 0.0147 | |||
Option pricing model | Common stock warrants | Perceptive Warrants | Expected life | ||||
Debt Instrument [Line Items] | ||||
Warrants, Measurement Input | Y | 3 | |||
Option pricing model | Common stock warrants | Perceptive Warrants | Share price | ||||
Debt Instrument [Line Items] | ||||
Warrants, Measurement Input | item | 4.01 | |||
Option pricing model | Common stock warrants | Maximum | Perceptive Warrants | Strike price | ||||
Debt Instrument [Line Items] | ||||
Warrants, Measurement Input | item | 4.67 | |||
Option pricing model | Common stock warrants | Minimum | Perceptive Warrants | Strike price | ||||
Debt Instrument [Line Items] | ||||
Warrants, Measurement Input | item | 3.74 |
Credit Agreement and Guaranty -
Credit Agreement and Guaranty - Carrying Amount Of term Loan (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Credit Agreement and Guaranty | ||
Notes payable | $ 20,000 | $ 20,000 |
Debt issuance costs | (967) | (967) |
Warrant discount | (3,258) | (3,258) |
Total | 15,775 | 15,775 |
Warrants and debt issue costs | $ 303 | $ 404 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Mar. 31, 2020 | Feb. 29, 2020 | Aug. 31, 2019 | Jan. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Nov. 02, 2018 | |
Sale of stock | ||||||||||
Proceeds from issuance of common stock in private placement, net of offering costs | $ 7,810 | |||||||||
Commission percentage | 3.00% | |||||||||
2018 Shelf Registration Statement | ||||||||||
Sale of stock | ||||||||||
Aggregate amount of securities issuable | $ 100,000 | |||||||||
Private Placement | Common Stock | ||||||||||
Sale of stock | ||||||||||
Issuance of common stock (in shares) | 8,426,750 | 17,250,000 | 8,426,750 | |||||||
Share price (in dollars per share) | $ 0.93 | $ 0.93 | ||||||||
Proceeds from issuance of common stock in private placement, net of offering costs | $ 7,800 | |||||||||
At-the-market sales | ||||||||||
Sale of stock | ||||||||||
Issuance of common stock (in shares) | 1,658,046 | |||||||||
Gross Proceeds | $ 2,200 | |||||||||
Proceeds from issuance of common stock in public offering, net of offering costs | (2,249) | |||||||||
At-the-market sales | Common Stock | ||||||||||
Sale of stock | ||||||||||
Issuance of common stock (in shares) | 992,072 | 665,974 | ||||||||
Public offering | ||||||||||
Sale of stock | ||||||||||
Proceeds from issuance of common stock in public offering, net of offering costs | $ 48,434 | |||||||||
Public offering | Common Stock | ||||||||||
Sale of stock | ||||||||||
Issuance of common stock (in shares) | 17,250,000 | 14,526,315 | ||||||||
Share price (in dollars per share) | $ 3 | $ 0.95 | ||||||||
Proceeds from issuance of common stock in public offering, net of offering costs | $ 48,400 | $ 12,700 | ||||||||
At The Market Offering | ||||||||||
Sale of stock | ||||||||||
Issuance of common stock (in shares) | 992,072 | |||||||||
Gross Proceeds | $ 10,000 | |||||||||
Proceeds from issuance of common stock in public offering, net of offering costs | $ 1,400 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation Expense | ||||
Total stock-based compensation expense | $ 839 | $ 479 | $ 1,460 | $ 969 |
Research and development | ||||
Stock-Based Compensation Expense | ||||
Total stock-based compensation expense | 139 | 159 | 337 | 310 |
General and administrative expenses | ||||
Stock-Based Compensation Expense | ||||
Total stock-based compensation expense | $ 700 | $ 320 | $ 1,123 | $ 659 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Accumulated Other Comprehensive Income | ||
Other comprehensive income of unrealized gain on marketable securities | $ 10 | $ 10 |
Balance at | $ 10 | 10 |
Amounts classified out of accumulated other comprehensive income | $ 0 |
2019 Retention Plan (Details)
2019 Retention Plan (Details) - 2019 Retention Plan - USD ($) $ / shares in Units, $ in Millions | Jul. 03, 2019 | Jun. 30, 2020 | Jul. 31, 2019 |
2019 Retention Plan | |||
Cash portion of the retention plan | $ 0.3 | ||
Options granted In January 2019 | Vesting on January 29, 2020 | |||
2019 Retention Plan | |||
Percentage of options to vest | 50.00% | ||
Options granted In January 2019 | Vesting on June 30, 2020 | |||
2019 Retention Plan | |||
Percentage of options to vest | 25.00% | ||
Options granted In January 2019 | Vesting on December 31, 2020 | |||
2019 Retention Plan | |||
Percentage of options to vest | 25.00% | ||
Options granted in July 2019 | |||
2019 Retention Plan | |||
Stock option exercise price (in dollars per share) | $ 1.48 | ||
Options granted in July 2019 | Vesting on July 3, 2020 | |||
2019 Retention Plan | |||
Percentage of options to vest | 50.00% | ||
Options granted in July 2019 | Vesting on December 31, 2020 | |||
2019 Retention Plan | |||
Percentage of options to vest | 50.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2020USD ($) |
Commitments and Contingencies | |
Future purchase commitments | $ 16.1 |