Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2019 | Aug. 26, 2019 | Dec. 31, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Entity Interactive Data Current | Yes | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MEIP | ||
Entity Registrant Name | MEI Pharma, Inc. | ||
Entity Central Index Key | 0001262104 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Title of 12(b) Security | Common Stock | ||
Entity Common Stock, Shares Outstanding | 73,634,927 | ||
Security Exchange Name | NASDAQ | ||
Entity Address, State or Province | CA | ||
Entity Public Float | $ 186.6 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 9,590 | $ 13,309 |
Short-term investments | 64,899 | 89,434 |
Total cash, cash equivalents and short-term investments | 74,489 | 102,743 |
Common stock proceeds receivable (Note 7) | 5,274 | |
Prepaid expenses and other current assets | 2,435 | 1,586 |
Total current assets | 82,198 | 104,329 |
Intangible assets, net | 261 | 296 |
Property and equipment, net | 204 | 32 |
Total assets | 82,663 | 104,657 |
Current liabilities: | ||
Accounts payable | 4,787 | 3,643 |
Accrued liabilities | 4,559 | 3,454 |
Deferred revenue | 4,955 | 788 |
Total current liabilities | 14,301 | 7,885 |
Deferred revenue, long-term | 2,819 | |
Warrant liability | 17,613 | 46,313 |
Total liabilities | 34,733 | 54,198 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 100 shares authorized; none outstanding | ||
Common stock, $0.00000002 par value; 226,000 shares authorized; 73,545 and 70,406 shares issued and outstanding at June 30, 2019 and 2018, respectively | ||
Additional paid-in-capital | 279,148 | 264,858 |
Accumulated deficit | (231,218) | (214,399) |
Total stockholders' equity | 47,930 | 50,459 |
Total liabilities and stockholders' equity | $ 82,663 | $ 104,657 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00 | $ 0.00 |
Common stock, shares authorized | 226,000,000 | 226,000,000 |
Common stock, shares issued | 73,545,000 | 70,406,000 |
Common stock, shares outstanding | 73,545,000 | 70,406,000 |
Statements of Operations
Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |||
Revenue | $ 4,915 | $ 1,622 | $ 23,249 | ||
Operating expenses: | |||||
Cost of revenue | 4,263 | 3,383 | 5,000 | ||
Research and development | 32,300 | 17,038 | 7,237 | ||
General and administrative | 14,597 | 9,787 | 8,628 | ||
Total operating expenses | 51,160 | 30,208 | 20,865 | ||
(Loss) income from operations | (46,245) | (28,586) | 2,384 | ||
Other income (expense): | |||||
Change in fair value of warrant liability | 27,632 | (9,705) | |||
Financing costs associated with warrants | (2,367) | ||||
Interest and dividend income | 1,795 | 591 | 287 | ||
Income tax expense | (1) | (1) | (1) | ||
Net (loss) income | (16,819) | [1] | (40,068) | [1] | 2,670 |
Net (loss) income: | |||||
Basic | (16,819) | (40,068) | 2,670 | ||
Diluted | $ (54,613) | $ (40,068) | $ 2,670 | ||
Net (loss) income per share: | |||||
Basic | $ (0.24) | $ (0.97) | $ 0.07 | ||
Diluted | $ (0.75) | $ (0.97) | $ 0.07 | ||
Shares used in computing net (loss) income per share: | |||||
Basic | 71,139 | 41,431 | 36,813 | ||
Diluted | 72,385 | 41,431 | 36,938 | ||
[1] | We have experienced large changes in our net income (loss) which relates to the change in fair value of the warrant liability for the years ended June 30, 2019 and 2018. Refer to Note 1 for further discussion. |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Shares | Additional paid in capital | Accumulated Deficit | |
Beginning Balance at Jun. 30, 2016 | $ 41,652 | $ 34,156 | $ 218,653 | $ (177,001) | |
Net (loss) income | 2,670 | 2,670 | |||
Issuance of common stock | 4,212 | 2,616 | 4,212 | ||
Share-based compensation expense | 2,304 | 2,304 | |||
Ending Balance at Jun. 30, 2017 | 50,838 | 36,772 | 225,169 | (174,331) | |
Net (loss) income | (40,068) | [1] | (40,068) | ||
Issuance of common stock in private placement | 35,910 | 33,003 | 35,910 | ||
Issuance of common stock for milestone payment | 500 | 167 | 500 | ||
Issuance of common stock for vested restricted stock units | (267) | 271 | (267) | ||
Exercise of stock options | 329 | 193 | 329 | ||
Share-based compensation expense | 3,217 | 3,217 | |||
Ending Balance at Jun. 30, 2018 | 50,459 | 70,406 | 264,858 | (214,399) | |
Net (loss) income | (16,819) | [1] | (16,819) | ||
Issuance of common stock | 5,444 | 2,215 | 5,444 | ||
Issuance of common stock for vested restricted stock units | (324) | 246 | (324) | ||
Exercise of warrants | 2,186 | 440 | 2,186 | ||
Exercise of stock options | 422 | 238 | 422 | ||
Share-based compensation expense | 6,562 | 6,562 | |||
Ending Balance at Jun. 30, 2019 | $ 47,930 | $ 73,545 | $ 279,148 | $ (231,218) | |
[1] | We have experienced large changes in our net income (loss) which relates to the change in fair value of the warrant liability for the years ended June 30, 2019 and 2018. Refer to Note 1 for further discussion. |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (16,819) | $ (40,068) | $ 2,670 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Change in fair value of warrant liability | (27,632) | 9,705 | |
Financing costs associated with warrants | 2,367 | ||
Share-based compensation | 6,562 | 3,217 | 2,304 |
Depreciation and amortization | 80 | 53 | 85 |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other current assets | (849) | 172 | (927) |
Accounts payable | 1,144 | 3,058 | (494) |
Accrued liabilities | 1,105 | 669 | (1,148) |
Deferred revenue | 6,986 | (208) | 996 |
Net cash (used in) provided by operating activities | (29,423) | (21,035) | 3,486 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (217) | (51) | |
Purchases of short-term investments | (64,655) | (114,233) | (60,123) |
Proceeds from maturity of short-term investments | 89,190 | 69,906 | 50,097 |
Net cash provided by (used in) investing activities | 24,318 | (44,327) | (10,077) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 372 | 329 | |
Proceeds from exercise of warrants | 1,118 | ||
Payment of RSU tax withholdings in exchange for common shares surrendered by RSU holders | (324) | (267) | |
Issuance of common stock | 220 | 70,151 | 4,212 |
Net cash provided by financing activities | 1,386 | 70,213 | 4,212 |
Net (decrease) increase in cash and cash equivalents | (3,719) | 4,851 | (2,379) |
Cash and cash equivalents at beginning of the period | 13,309 | 8,458 | 10,837 |
Cash and cash equivalents at end of the period | 9,590 | 13,309 | 8,458 |
Supplemental cash flow information: | |||
Income taxes paid | (1) | $ (1) | $ (1) |
Non-cash financing activities: | |||
Proceeds receivable- sale of common stock | 5,224 | ||
Proceeds receivable- stock option exercises | 50 | ||
Change in fair value of warrants exercised | $ 1,068 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
The Company and Summary of Significant Accounting Policies | Note 1. The Company and Summary of Significant Accounting Policies The Company We are a late-stage pharmaceutical company focused on leveraging our extensive development and oncology expertise to identify and advance new therapies intended to meaningfully improve the treatment of cancer. Our portfolio of drug candidates contains four clinical-stage candidates, including one candidate in an ongoing Phase 3 global registration trial and another candidate in an ongoing Phase 2 clinical trial that we intend to submit to the U.S. Food and Drug Administration (“FDA”) to support accelerated approval of a marketing application. Our common stock is listed on the NASDAQ Capital Market under the symbol “MEIP”. Clinical Development Programs Our approach to building our pipeline is to license promising cancer agents and build value in programs partnerships, as appropriate. Our drug candidate pipeline includes: • ME-401, an oral phosphatidylinositol 3-kinase (“PI3K”) delta inhibitor; • Voruciclib, an oral cyclin-dependent kinase (“CDK”) inhibitor; • ME-344, a mitochondrial inhibitor targeting the oxidative phosphorylation (“OXPHOS”) complex; and • Pracinostat, an oral histone deacetylase (“HDAC”) inhibitor. The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. The commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates. We will need substantial additional funds to progress the clinical trial programs for the drug candidates ME-401, voruciclib, ME-344 and pracinostat, and to develop new compounds. The actual amount of funds that will be needed are determined by a number of factors, some of which are beyond our control. Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators. Use of Estimates The preparation of financial statements in conformity with equires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. We use estimates that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. Actual results could materially differ from those estimates. Liquidity We have accumulated losses of $231.2 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of June 30, 2019, we had $79.8 million in cash and cash equivalents, short-term investments, and common stock proceeds receivable, which we believe will be sufficient to meet obligations and fund our liquidity and capital expenditure requirements for at least the next 12 months from the issuance of these financial statements. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operating expenses may affect actual future use of existing cash resources. Our research and development expenses are expected to increase in the foreseeable future. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials. To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less when purchased. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Short-Term Investments Investments that have maturities of greater than three months but less than one year are classified as short-term investments. As of June 30, 2019 and 2018, our short-term investments consisted of $64.9 million and $89.4 million, respectively, in U.S. government securities. The short-term investments held as of June 30, 2019 and 2018 had maturity dates of less than one year, are considered to be “held to maturity” and are carried at amortized cost. As of June 30, 2019 and 2018, the gross holding gains and losses were immaterial. Fair Value Measurements 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 on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. 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 is as follows: • Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We measure the following financial instruments at fair value on a recurring basis. The fair values of these financial instruments were as follows (in thousands): June 30, 2019 June 30, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Warrant liability $ — $ — $ (17,613 ) $ — $ — $ (46,313 ) Total $ — $ — $ (17,613 ) $ — $ — $ (46,313 ) The carrying amounts of financial instruments such as cash equivalents, short-term investments and accounts payable approximate the related fair values due to the short-term maturities of these instruments. We invest our excess cash in financial instruments which are readily convertible into cash, such as money market funds and U.S. government securities. Cash equivalents, where applicable, and short-term investments are classified as Level 1 as defined by the fair value hierarchy. In May 2018, we issued warrants in connection with our private placement of shares of common stock. Pursuant to the terms of the warrants, we could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as a liability in the Balance Sheet. We recorded the fair value of the warrants upon issuance using the Black-Scholes valuation model and are required to revalue the warrants at each reporting date with any changes in fair value recorded on our Statement of Operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The change in the fair value of the Level 3 warrant liability is reflected in the Statement of Operations for . To calculate the fair value of the warrant liability, the following assumptions were used: June 30, 2019 June 30, 2018 Risk-free interest rate 1.7 % 2.7 % Expected life (years) 3.8 4.8 Expected volatility 56.8 % 77.3 % Dividend yield 0.0 % 0.0 % Black-Scholes Fair Value $ 1.10 $ 2.81 The following table sets forth a summary of changes in the estimated fair value of our Level 3 warrant liability for the year ended June 30, 2019 and 2018 (in thousands): Fair Value of Warrants Using Significant 2019 2018 Balance at July 1, $ 46,313 $ — Issuance of liability classified warrants — 36,608 Reclassification of derivative liability to equity upon exercise of warrants (1,068 ) — Change in estimated fair value of liability classified warrants (27,632 ) 9,705 Balance at June 30, $ 17,613 $ 46,313 Intangible Assets Intangible assets consist of patents acquired from S*Bio in August 2012, relating to a family of heterocyclic compounds that inhibit HDACs. Capitalized amounts are amortized on a straight-line basis over the expected life of the intellectual property of 14 years from the date of acquisition. The carrying values of intangible assets are periodically reviewed to determine if the facts and circumstances suggest that a potential impairment may have occurred. Results of operations for the years ended June 30, 2019, 2018 and 2017 do not reflect any write-downs associated with the potential impairment of intangible assets. Property and Equipment Property and equipment are stated at cost and depreciated over the estimated useful lives of the assets (generally three to seven years) using the straight-line method. Leasehold improvements are stated at cost and are amortized over the shorter of the estimated useful lives of the assets or the lease term. Revenue Recognition ASC Topic 606, Revenue from Contracts with Customers (“Topic 606” or the “new revenue standard”) Beginning July 1, 2018, we recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For enforceable contracts with our customers, we first identify the distinct performance obligations – or accounting units – within the contract. Performance obligations are commitments in a contract to transfer a distinct good or service to the customer. Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and we estimate the amount to include in the transaction price using the most likely method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not included in the transaction price until those approvals are received. At the end of each reporting period, we re-evaluate the probability of achievement of development milestones and any related constraint and, as necessary, we adjust our estimate of the overall transaction price. Any adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. To date, we have not recognized any material cumulative catch-up adjustments from changes in our estimate of the transaction price. We develop estimates of the stand-alone selling price for each distinct performance obligation and allocate the overall transaction price to each accounting unit based on a relative stand-alone selling price approach. We develop assumptions that require judgment to determine the stand-alone selling price for license-related performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical, regulatory and commercial success. We estimate stand-alone selling price for research and development performance obligations by forecasting the expected costs of satisfying a performance obligation plus an appropriate margin. In the case of a license that is a distinct performance obligation, we recognize revenue from non-refundable, up-front fees at the point in time when the license is transferred to the licensee and the licensee can use and benefit from the license. For licenses that are bundled with other obligations, we use judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. If the performance obligation is satisfied over time, we evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. Revenue is recorded proportionally as costs are incurred. We generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation (an “input method” under Topic 606). We use judgment to estimate the total cost expected to complete the research and development performance obligations, which include subcontractors’ costs, labor, materials, other direct costs and an allocation of indirect costs. We evaluate these cost estimates and the progress each reporting period and, as necessary, we adjust the measure of progress and related revenue recognition. To date, we have not recognized any material cumulative catch-up adjustments from changes in our estimate of the measure of progress. For arrangements that include sales-based or usage-based royalties, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, we have not recognized any sales-based royalty revenue from license agreements. We recognized revenue associated with the following license agreements (in thousands): Years Ended June 30, 2019 2018 2017 KKC License Agreement $ 2,557 $ — $ — Helsinn License Agreement 2,358 1,622 23,249 $ 4,915 $ 1,622 $ 23,249 Timing of Revenue Recognition: License transferred at a point in time $ 879 $ — $ 20,880 Services performed over time 4,036 1,622 2,369 $ 4,915 $ 1,622 $ 23,249 Revenue for the year ended June 30, 2019 included revenue related to the KKC License Agreement (Note 2). Based on the characteristics of the KKC License Agreement, delivery of the license is a distinct performance obligation, and we recognized related revenue of $0.9 million during the year ended June 30, 2019 when the license was transferred to the licensee and the licensee could use and benefit from the license. The license agreement included other distinct performance obligations that will be satisfied over time, and accordingly we recognized $1.7 million related to our progress toward satisfying those obligations during the year ended June 30, 2019. Revenue for the years ended June 30, 2019, 2018 and 2017 included revenue related to the Helsinn License Agreement (Note 2). Based on the characteristics of the Helsinn License Agreement, control of the remaining deliverables occurs over time and therefore we recognize revenue based on the extent of progress towards completion of the performance obligations. As of June 30, 2019, we had $7.8 million of deferred revenue associated with our remaining performance obligations under the KKC and Helsinn license agreements. We expect to recognize approximately $5.0 million of deferred revenue in the next 12 months, and an additional $2.8 million thereafter. Contract Balances The following table presents changes in contract assets and contract liabilities during the year ended June 30, 2019 (in thousands): As of July 1, Net As of June 30, Receivables $ 82 $ (82 ) $ — Contract Assets $ 312 $ 374 $ 686 Contract Liabilities $ 788 $ 6,986 $ 7,774 The timing of revenue recognition, invoicing and cash collections results in billed accounts receivable and unbilled receivables (contract assets), which are classified as “prepaid expenses and other current assets” on our Balance Sheet, and deferred revenue (contract liabilities). We invoice our customers in accordance with agreed-upon contractual terms, typically at periodic intervals or upon achievement of contractual milestones. Invoicing may occur subsequent to revenue recognition, resulting in contract assets. We may receive advance payments from our customers before revenue is recognized, resulting in contract liabilities. The contract assets and liabilities reported on the Balance Sheet relate to the KKC License Agreement and Helsinn License Agreement. Accounting Standard Codification (“ASC”) Topic 605, Revenue Recognition (“Topic 605”) Revenue Recognition Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. We consider a variety of factors in determining the appropriate method of accounting under our license agreements, including whether the various elements can be separated and accounted for individually as separate units of accounting. Multiple Element Arrangements Deliverables under an arrangement will be separate units of accounting, provided (i) a delivered item has value to the customer on a standalone basis; and (ii) the arrangement includes a general right of return relative to the delivered item, and delivery or performance of the undelivered item is considered probable and substantially in our control. We account for revenue arrangements with multiple elements by separating and allocating consideration according to the relative selling price of each deliverable. If an element can be separated, an amount is allocated based upon the relative selling price of each element. We determine the relative selling price of a separate deliverable using the price we charge other customers when we sell that element separately. If the element is not sold separately and third party pricing evidence is not available, we will use our best estimate of selling price. License Fee Revenue Non-refundable, up-front fees that are not contingent on any future performance by us and require no consequential continuing involvement on our part are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. We defer recognition of non-refundable upfront license fees if we have continuing performance obligations, without which the licensed data, technology, or product has no utility to the licensee separate and independent of our performance under the other elements of the applicable arrangement. The specific methodology for the recognition of the revenue is determined on a case-by-case basis according to the facts and circumstances of the applicable agreement. Research and Development Revenue Research and development revenue represents ratable recognition of fees allocated to research and development activities. We defer recognition of research and development revenue until the performance of the related research and development activities has occurred. Research and development revenue for the year ended June 30, 2018 and 2017 related to services provided by third-party vendors related to research and development activities performed under the Helsinn License Agreement (Note 2). Cost of Revenue Cost of revenue primarily includes external costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials, and internal compensation and related personnel expenses to support our research and development performance obligations associated with the Helsinn License Agreement. Research and Development Costs Research and development costs are expensed as incurred and include costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses. We expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials, and other events. Costs incurred related to the purchase or licensing of in-process Share-based Compensation Share-based compensation expense for employees and directors is recognized in the Statement of Operations based on estimated amounts, including the grant date fair value and the expected service period. For stock options, we estimate the grant date fair value using a Black-Scholes valuation model, which requires the use of multiple subjective inputs including estimated future volatility, expected forfeitures and the expected term of the awards. We estimate the expected future volatility based on the stock’s historical price volatility. The stock’s future volatility may differ from the estimated volatility at the grant date. For restricted stock unit (“RSU”) equity awards, we estimate the grant date fair value using our closing stock price on the date of grant. We recognize the effect of forfeitures in compensation expense when the forfeitures occur. The estimated forfeiture rates may differ from actual forfeiture rates which would affect the amount of expense recognized during the period. We recognize the value of the awards over the awards’ requisite service or performance periods. The requisite service period is generally the time over which our share-based awards vest. Interest and Dividend Income Interest on cash balances is recognized when earned. Dividend income is recognized when the right to receive the payment is established. Income Taxes Our income tax expense consists of current and deferred income tax expense or benefit. Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for the future tax consequences attributable to tax credits and loss carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of June 30, 2019 and 2018, we have established a valuation allowance to fully reserve our net deferred tax assets. Tax rate changes are reflected in income during the period such changes are enacted. Changes in our ownership may limit the amount of net operating loss carryforwards that can be utilized in the future to offset taxable income. In December 2017, the U.S government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act reduced the corporate tax rate from 34% to 21%, effective for tax years beginning January 1, 2018. We are subject to the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 740-10, Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), given the amount and complexity of the changes in tax law resulting from the Tax Act, the Company had not finalized the accounting for the income tax effects of the Tax Act as of June 30, 2018. In connection with our initial analysis of the impact of the Tax Act, the Company recorded a non-cash tax expense of $15.9 million during the year ended June 30, 2018, due to the re-measurement of our deferred tax assets and liabilities at the new U.S. federal tax rate, offset by a corresponding change to the Company’s valuation allowance. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, the Company completed our analysis based on legislative updates relating to the Tax Act currently available, and no material adjustments have been recorded as of June 30, 2019. The FASB Topic on Income Taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Net (Loss) Income Per Share Basic and diluted net (loss) income per share are computed using the weighted-average number of shares of common stock outstanding during the period, less any shares subject to repurchase or forfeiture. There were no shares of common stock subject to repurchase or forfeiture for the years ended June 30, 2019, 2018 and 2017. Our potentially dilutive shares, which include outstanding stock options, restricted stock units, and warrants, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The assessment of dilution is made on a quarterly basis and therefore the annual determination of diluted net loss per share only includes those quarters in which the potential common stock equivalents were determined to be dilutive. For the years ended June 30, 2019, 2018 and 2017, we did not have any items that would be classified as other comprehensive income or losses. The following table presents the calculation of net loss (income) used to calculate basic and diluted loss (income) per share (in thousands): Years Ended June 30, 2019 2018 2017 Net (loss) income—basic $ (16,819 ) $ (40,068 ) $ 2,670 Change in fair value of warrant liability (37,794 ) — — Net (loss) income—diluted $ (54,613 ) $ (40,068 ) $ 2,670 Shares used in calculating net (loss) income per share was determined as follows (in thousands): Years Ended June 30, 2019 2018 2017 Weighted average shares outstanding 71,139 41,064 36,435 Effect of vested restricted stock units — 367 378 Weighted average shares used in calculating basic (loss) income per share 71,139 41,431 36,813 Effect of potentially dilutive common shares from equity awards and liability-classified warrants 1,246 — 125 Weighted average shares used in calculating diluted (loss) income per share 72,385 41,431 36,938 The following potentially dilutive shares (in thousands) that have been excluded from the calculation of net (loss) income per share because of their anti-dilutive effect: Years Ended June 30, 2019 2018 2017 Stock options 8,057 5,606 3,749 Restricted stock units 32 336 — Warrants 8,062 3,532 3,582 Total anti-dilutive shares 16,151 9,474 7,331 Recent Accounting Pronouncements Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update No. 2014-09 Revenue Recognition Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02 right-of-use A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We will adopt the new lease standard effective July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before July 1, 2019. The new standard provides a number of optional practical expedients in transition. We plan to elect the package of practical expedients, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We expect that this standard will not have a material effect on our financial statements. The most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real property operating lease; and (2) providing new disclosures about our leasing activities. On adoption, we currently expect to recognize an additional operating lease liability with a corresponding ROU asset of approximately $ 0.7 |
License Agreements
License Agreements | 12 Months Ended |
Jun. 30, 2019 | |
License Agreements | Note 2. License Agreements KKC License Agreement In October 2018, we, as licensor, entered into a license agreement with Kyowa Kirin Co., Ltd., a Japanese life sciences company (“KKC”) for ME-401 ME-401 ME-401 pre-negotiated ME-401 mid-teens. ME-401 ME-401 We assessed the KKC License Agreement in accordance with ASC 606 and determined that our performance obligations comprise the license, research and development obligations, and our obligation to provide clinical trial materials to KKC. We determined that the transaction price amounts to the upfront payment of $ 10.0 re-evaluate We determined that control of the license was transferred to KKC during the year ended June 30, 2019. Revenue allocated to the research and development obligations is recognized based on the proportional performance of these research and development activities, which we expect to recognize through fiscal year 2022. Revenue allocated to providing clinical trial materials is recognized upon delivery. Helsinn License Agreement In August 2016, we, as licensor, entered into an exclusive worldwide license, development, manufacturing and commercialization agreement with Helsinn Healthcare SA, a Swiss pharmaceutical corporation (“Helsinn”) for pracinostat in acute myeloid leukemia (“AML”), myelosdisplastic syndrome (“MDS”) and other potential indications (the “Helsinn License Agreement”). Under the terms of the agreement, Helsinn was granted a worldwide exclusive license to develop, manufacture and commercialize pracinostat, and is primarily responsible for funding its global development and commercialization. As compensation for such grant of rights, we received payments of $20.0 million. In addition, we are eligible to receive up to $444 million in potential regulatory and sales-based milestones, along with royalty payments on the net sales of pracinostat, which, in the U.S., are tiered and begin in the mid-teens. We determined that the agreement contains multiple performance obligations for purposes of revenue recognition. Revenue related to the research and development elements of the arrangement is recognized based on the extent of progress toward completion of each performance obligation. Revenue is recognized on a gross basis as we are the primary obligor and have discretion in supplier selection. During the year ended June 30, 2019, our only remaining performance obligation under the agreement is the conduct of a Phase 2 dose-optimization study of pracinostat in combination with azacitidine in patients with high and very high risk MDS who are previously untreated with hypomethylating agents (the “POC study”), for which Helsinn has agreed to share third-party expenses. Presage License Agreement In September 2017, we, as licensee, entered into a license agreement with Presage Biosciences, Inc. (“Presage”). Under the terms of the license agreement, Presage granted to us exclusive worldwide rights to develop, manufacture and commercialize voruciclib, a clinical-stage, oral and selective CDK inhibitor, and related compounds. In exchange, we paid $2.9 million. With respect to the first indication, an incremental $2.0 million payment, due upon dosing of the first subject in the first registration trial will be owed to Presage, for total payments of $4.9 million prior to receipt of marketing approval of the first indication in the U.S., E.U. or Japan. Additional potential payments of up to $179 million will be due upon the achievement of certain development, regulatory and commercial milestones. We will also pay mid-single-digit CyDex License Agreement We, as licensee, are party to a license agreement with CyDex Pharmaceuticals, Inc. (“CyDex”). Under the terms of the license agreement, CyDex granted to us an exclusive, nontransferable license to intellectual property rights relating to Captisol ® ME-344). non-refundable |
BeiGene Collaboration
BeiGene Collaboration | 12 Months Ended |
Jun. 30, 2019 | |
BeiGene Collaboration | Note 3. BeiGene Collaboration In October 2018, we entered into a clinical collaboration with BeiGene, Ltd. (“BeiGene”) to evaluate the safety and efficacy of ME-401 B-cell ME-401 B-cell ME-401 ME-401 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | Note 4. Intangible Assets Intangible assets consisted of the following, in thousands: June 30, 2019 2018 S*Bio Patents—Gross $ 500 $ 500 Less: accumulated amortization (239 ) (204 ) Intangible assets, net $ 261 $ 296 Amortization expense of intangible assets for the years ended June 30, 2019, 2018 and 2017 was $ 35,000 35,000 2026 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jun. 30, 2019 | |
Property and Equipment | Note 5. Property and Equipment Property and equipment consisted of the following, in thousands: June 30, 2019 2018 Furniture and equipment $ 250 $ 81 Leasehold improvements 48 — 298 81 Less: accumulated depreciation (94 ) (49 ) Property and equipment, net $ 204 $ 32 Depreciation expense of property and equipment for the years ended June 30, 2019, 2018 and 2017 was $ 45,000 18,000 50,000 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Note 6. Accrued Liabilities Accrued liabilities consisted of the following, in thousands: June 30, 2019 2018 Accrued pre-clinical and clinical trial expenses $ 2,014 $ 1,234 Accrued compensation and benefits 1,973 1,766 Accrued legal and professional services expenses 316 251 Other 256 203 Total accrued liabilities $ 4,559 $ 3,454 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity | Note 7. Stockholders’ Equity Equity Transactions Shelf Registration Statement We have a shelf registration statement that permits us to sell, from time to time, up to $150.0 million of common stock, preferred stock and warrants. In November 2017, we entered into an At-The-Market 2,214,658 5.4 5.2 May 2018 Private Placement In May 2018, we raised $70.2 million, net of transaction costs, in a private placement of common shares and warrants. We issued and sold 33,003,296 shares of common stock, as well as warrants to purchase 16,501,645 shares. The price was approximately $2.27 to purchase one share with an accompanying warrant; each warrant is for the purchase of one-half Helsinn Equity Investment On August 5, 2016, we entered into the Helsinn Equity Agreement. Pursuant to the terms of the Helsinn Equity Agreement, we issued 2,616,431 shares of common stock on August 16, 2016 in exchange for a $5.0 million investment. The transaction was exempt from registration pursuant to Section 4(a)(2) of the Securities Act. Description of Capital Stock Our total authorized share capital is 226,100,000 shares consisting of 226,000,000 shares of common stock, $0.00000002 par value per share, and 100,000 shares of preferred stock, $0.01 par value per share. Common Stock The holders of common stock are entitled to one vote per share non-assessable. pre-emptive Preferred Stock Our Board of Directors has the authority to issue up to 100,000 shares of preferred stock with par value of $.01 per share in one or more series and to fix the rights, preferences, privileges and restrictions in respect of that preferred stock, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption (including sinking fund provisions), redemption prices and liquidation preferences, and the number of shares constituting such series and the designation of any such series, without future vote or action by the stockholders. Therefore, the board without the approval of the stockholders could authorize the issue of preferred stock with voting, conversion and other rights that could affect the voting power, dividend and other rights of the holders of shares or that could have the effect of delaying, deferring or preventing a change of control. There were no |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation | Note 8. Share-based Compensation We use equity-based compensation programs to provide long-term performance incentives for our employees. These incentives consist primarily of stock options and RSUs. In December 2008, we adopted the MEI Pharma, Inc. 2008 Stock Omnibus Equity Compensation Plan (“2008 Plan”), as amended and restated in 2011, 2013, 2014, 2015, 2016 and 2018, under which 19,089,794 shares of common stock are authorized for issuance. The 2008 Plan provides for the grant of options and/or other stock-based or stock-denominated awards to our non-employee Total share-based compensation expense for all stock awards consists of the following, in thousands: Years Ended June 30, 2019 2018 2017 Research and development $ 2,239 $ 1,176 $ 839 General and administrative 4,323 2,041 1,465 Total share-based compensation $ 6,562 $ 3,217 $ 2,304 Stock Options Stock options granted to employees vest ratably each month for a period of 36 months, or vest 25% one year from the date of grant and ratably each month thereafter for a period of 36 months, and expire either five ten 12 months from the date of grant, and expire either five years or ten years from the date of grant. As of June 30, 2019, there were a total of 8,356,961 options outstanding. A summary of our stock option activity and related data follows: Number of Weighted-Average Weighted-Average Aggregate Outstanding at June 30, 2018 6,281,615 $ 3.08 Granted 3,119,250 $ 3.90 Exercised (237,810 ) $ 1.78 Forfeited / Cancelled (452,240 ) $ 3.10 Expired (353,854 ) $ 8.30 Outstanding at June 30, 2019 8,356,961 $ 3.20 7.6 $ 2,571,190 Vested and exercisable at June 30, 2019 3,980,033 $ 2.86 6.3 $ 2,127,106 As of June 30, 2019, the aggregate intrinsic value of outstanding options is calculated as the difference between the exercise price of the underlying options and the closing price of our common stock of $2.50 on that date. The total fair value of options that vested during the years ended June 30, 2019, 2018 and 2017 was $3.4 million, $2.4 million and $2.4 million, respectively. A summary of our nonvested stock option activity: Number of Weighted-Average Fair Value Nonvested at June 30, 2018 3,232,930 $ 2.15 Granted 3,119,250 $ 2.78 Forfeited (411,210 ) $ 2.28 Vested (1,564,042 ) $ 2.17 Nonvested at June 30, 2019 4,376,928 $ 2.58 Unrecognized compensation expense related to non-vested We use a Black-Scholes valuation model to estimate the grant date fair value of stock options. To calculate these fair values, the following weighted-average assumptions were used: Years Ended June 30, 2019 2018 2017 Risk-free interest rate 2.7 % 2.3 % 1.3 % Expected life (years) 6.0 6.0 5.9 Expected volatility 82.5 % 93.7 % 107.4 % Dividend yield 0.0 % 0.0 % 0.0 % Weighted-average grant date fair value $ 2.78 $ 2.40 $ 1.15 Restricted Stock Units In March 2013, the Compensation Committee of the Board of Directors granted 400,000 RSUs to our Chief Executive Officer. Each RSU represented the contingent right to receive one In June 2016, we granted 364,726 RSUs to employees. Each RSU represented the contingent right to receive one |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies | Note 9. Commitments and Contingencies We have contracted with various consultants and third parties to assist us in pre-clinical We have leased approximately 20,800 square feet of office space, located at 3611 Valley Centre Drive, San Diego, California. The location houses our executive and administrative offices. The lease commenced in July 2017 and expires in May 2020. The monthly rental rate is approximately $67,000 per month over the remaining term of the lease, plus a pro rata share of certain building expenses. The remaining contractual obligations are approximately $0.7 million. Presage License Agreement As discussed in Note 2, we are party to a license agreement with Presage under which we may be required to make future payments upon the achievement of certain development, regulatory and commercial milestones, as well as potential future royalties based upon net sales. As of June 30, 2019, we have not S*Bio Purchase Agreement We are party to a definitive asset purchase agreement with S*Bio, pursuant to which we acquired certain assets comprised of intellectual property and technology including rights to pracinostat. We agreed to make certain milestone payments to S*Bio based on the achievement of certain clinical, regulatory and net sales-based milestones, as well as to make certain contingent earnout payments to S*Bio. Milestone payments will be made to S*Bio up to an aggregate amount of $75.2 million if certain U.S., E.U. and Japanese regulatory approvals are obtained and if certain net sales thresholds are met in North America, the E.U. and Japan. The first milestone payment of $200,000 plus 166,527 shares of our common stock having a value of $500,000 was paid in August 2017 upon the first dosing of a patient in a Phase 3 clinical trial. Subsequent milestone payments will be due upon certain regulatory approvals and sales-based events. As of June 30, 2019, we have not CyDex License Agreement As discussed in Note 2, we are party to a license agreement with CyDex under which we may be required to make future payments upon the achievement of certain milestones, as well as potential future royalties based upon net sales. Contemporaneously with the license agreement, CyDex entered into a commercial supply agreement with us, pursuant to which we agreed to purchase 100% of our requirements for Captisol from CyDex. As of June 30, 2019, we have not |
Segment Information
Segment Information | 12 Months Ended |
Jun. 30, 2019 | |
Segment Information | Note 10. Segment Information We have one |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Taxes | Note 11. Income Taxes P Years Ended June 30, 2019 2018 2017 Domestic $ (16,819 ) $ (40,068 ) $ 2,670 Foreign — — — P $ (16,819 ) $ (40,068 ) $ 2,670 The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense is as follows (in thousands): Years Ended June 30, 2019 2018 2017 $ % $ % $ % Tax benefit (expense) at U.S. statutory rates $ 3,532 21 % $ 11,019 28 % $ (908 ) 34 % State tax 86 1 % (5,370 ) -13 % (158 ) 6 % Other (478 ) -3 % (537 ) -1 % (208 ) 8 % Capital loss carryover expiration — 0 % — 0 % (26,382 ) 988 % (Increase) decrease in valuation allowance (9,082 ) -54 % 14,914 37 % 27,655 -1036 % Revaluation of deferred taxes — 0 % (15,870 ) -40 % — 0 % Equity compensation 138 1 % (837 ) -2 % — 0 % Warrant liability costs 5,803 35 % (3,320 ) -8 % — 0 % $ (1 ) 0 % $ (1 ) 0 % $ (1 ) 0 % Deferred tax liabilities and assets are comprised of the following (in thousands): June 30, 2019 2018 Deferred tax assets: Tax carried forward losses $ 18,510 $ 8,893 Fixed and intangible assets 15,328 17,790 Share-based payments 3,081 2,354 Capital lease obligation 1,635 171 Compensation accruals 85 367 Consultant and other accruals 41 35 Charitable contributions 22 11 Total deferred tax assets 38,702 29,621 Valuation allowance for deferred tax assets (38,702 ) (29,621 ) Net deferred tax assets and liabilities $ — $ — We evaluate the recoverability of the deferred tax assets and the amount of the required valuation allowance. Due to the uncertainty surrounding the realization of the tax deductions in future tax returns, we have recorded a valuation allowance against our net deferred tax assets as of June 30, 2019 and 2018. At such time as it is determined that it is more likely than not that the deferred tax assets will be realized, the valuation allowance would be reduced. We had federal and state net operating loss carryforwards of approximately $ 81.8 19.0 Pre-tax 20.1 2022 61.7 2030 Our ability to utilize our net operating loss carryforwards may be substantially limited due to ownership changes that have occurred or that could occur in the future under Section 382 of the Internal Revenue Code and similar state laws. During 2017, we completed a study to analyze whether one or more ownership changes had occurred through August 31, 2016, and determined that two such ownership changes did occur. A follow-up study was completed during the year ended June 30, 2019 to identify whether any additional ownership changes had occurred as a result of the May 2018 stock issuance. The analysis concluded no additional ownership changes had taken place as of June 30, 2018. While the ownership changes do limit the amount of net operating loss we are able to use each year, all of our net operating losses were expected to be available for utilization prior to expiring. None of our prior income tax returns have been selected for examination by a major taxing jurisdiction; however, the statutes of limitations for various filings remain open. The oldest filings subject to potential examination for federal and state purposes are 2016 and 2015, respectively. If we utilize a net operating loss related to a closed year, the amount of the net operating loss may still be adjusted by the taxing authority. We have not reduced any tax benefit on our financial statements due to uncertain tax positions as of June 30, 2018 and we are not aware of any circumstance that would significantly change this result through the end of fiscal year 2020. To the extent we incur income-tax |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2019 | |
Selected Quarterly Financial Information (Unaudited) | Note 12. Selected Quarterly Financial Information (Unaudited) The following table presents our unaudited quarterly results of operations for the years ended June 30, 2019 and 2018 (in thousands, except per share amounts). Quarters Ended Year Ended June 30, March 31, December September June 30, Total revenues $ 1,129 $ 1,249 $ 2,049 $ 488 $ 4,915 Net income (loss) (1) $ 3,052 $ (17,354 ) $ 12,025 $ (14,542 ) $ (16,819 ) Basic income (loss) per share $ 0.04 $ (0.24 ) $ 0.17 $ (0.21 ) $ (0.24 ) Diluted loss per share $ (0.15 ) $ (0.24 ) $ (0.15 ) $ (0.21 ) $ (0.75 ) Quarters Ended Year Ended June 30, March 31, December September June 30, Total revenues $ 548 $ 433 $ 358 $ 283 $ 1,622 Net income (loss) (1) $ (19,253 ) $ (5,948 ) $ (6,079 ) $ (8,788 ) $ (40,068 ) Basic income (loss) per share $ (0.36 ) $ (0.16 ) $ (0.16 ) $ (0.24 ) $ (0.97 ) Diluted income (loss) per share $ (0.36 ) $ (0.16 ) $ (0.16 ) $ (0.24 ) $ (0.97 ) (1) We have experienced large changes in our net income (loss) which relates to the change in fair value of the warrant liability for the years ended June 30, 2019 and 2018. Refer to Note 1 for further discussion. |
The Company and Summary of Si_2
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Clinical Development Programs | Clinical Development Programs Our approach to building our pipeline is to license promising cancer agents and build value in programs partnerships, as appropriate. Our drug candidate pipeline includes: • ME-401, an oral phosphatidylinositol 3-kinase (“PI3K”) delta inhibitor; • Voruciclib, an oral cyclin-dependent kinase (“CDK”) inhibitor; • ME-344, a mitochondrial inhibitor targeting the oxidative phosphorylation (“OXPHOS”) complex; and • Pracinostat, an oral histone deacetylase (“HDAC”) inhibitor. The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. The commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates. We will need substantial additional funds to progress the clinical trial programs for the drug candidates ME-401, voruciclib, ME-344 and pracinostat, and to develop new compounds. The actual amount of funds that will be needed are determined by a number of factors, some of which are beyond our control. Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with equires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. We use estimates that affect the reported amounts (including assets, liabilities, revenues and expenses) and related disclosures. Actual results could materially differ from those estimates. |
Liquidity | Liquidity We have accumulated losses of $231.2 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of June 30, 2019, we had $79.8 million in cash and cash equivalents, short-term investments, and common stock proceeds receivable, which we believe will be sufficient to meet obligations and fund our liquidity and capital expenditure requirements for at least the next 12 months from the issuance of these financial statements. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operating expenses may affect actual future use of existing cash resources. Our research and development expenses are expected to increase in the foreseeable future. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials. To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, license agreements or entry into strategic partnerships. There can be no assurance that we will be able to continue to raise additional capital in the future. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less when purchased. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. |
Short-Term Investments | Short-Term Investments Investments that have maturities of greater than three months but less than one year are classified as short-term investments. As of June 30, 2019 and 2018, our short-term investments consisted of $64.9 million and $89.4 million, respectively, in U.S. government securities. The short-term investments held as of June 30, 2019 and 2018 had maturity dates of less than one year, are considered to be “held to maturity” and are carried at amortized cost. As of June 30, 2019 and 2018, the gross holding gains and losses were immaterial. |
Fair Value Measurements | Fair Value Measurements 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 on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. 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 is as follows: • Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We measure the following financial instruments at fair value on a recurring basis. The fair values of these financial instruments were as follows (in thousands): June 30, 2019 June 30, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Warrant liability $ — $ — $ (17,613 ) $ — $ — $ (46,313 ) Total $ — $ — $ (17,613 ) $ — $ — $ (46,313 ) The carrying amounts of financial instruments such as cash equivalents, short-term investments and accounts payable approximate the related fair values due to the short-term maturities of these instruments. We invest our excess cash in financial instruments which are readily convertible into cash, such as money market funds and U.S. government securities. Cash equivalents, where applicable, and short-term investments are classified as Level 1 as defined by the fair value hierarchy. In May 2018, we issued warrants in connection with our private placement of shares of common stock. Pursuant to the terms of the warrants, we could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as a liability in the Balance Sheet. We recorded the fair value of the warrants upon issuance using the Black-Scholes valuation model and are required to revalue the warrants at each reporting date with any changes in fair value recorded on our Statement of Operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The change in the fair value of the Level 3 warrant liability is reflected in the Statement of Operations for . To calculate the fair value of the warrant liability, the following assumptions were used: June 30, 2019 June 30, 2018 Risk-free interest rate 1.7 % 2.7 % Expected life (years) 3.8 4.8 Expected volatility 56.8 % 77.3 % Dividend yield 0.0 % 0.0 % Black-Scholes Fair Value $ 1.10 $ 2.81 The following table sets forth a summary of changes in the estimated fair value of our Level 3 warrant liability for the year ended June 30, 2019 and 2018 (in thousands): Fair Value of Warrants Using Significant 2019 2018 Balance at July 1, $ 46,313 $ — Issuance of liability classified warrants — 36,608 Reclassification of derivative liability to equity upon exercise of warrants (1,068 ) — Change in estimated fair value of liability classified warrants (27,632 ) 9,705 Balance at June 30, $ 17,613 $ 46,313 |
Intangible Assets | Intangible Assets Intangible assets consist of patents acquired from S*Bio in August 2012, relating to a family of heterocyclic compounds that inhibit HDACs. Capitalized amounts are amortized on a straight-line basis over the expected life of the intellectual property of 14 years from the date of acquisition. The carrying values of intangible assets are periodically reviewed to determine if the facts and circumstances suggest that a potential impairment may have occurred. Results of operations for the years ended June 30, 2019, 2018 and 2017 do not reflect any write-downs associated with the potential impairment of intangible assets. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated over the estimated useful lives of the assets (generally three to seven years) using the straight-line method. Leasehold improvements are stated at cost and are amortized over the shorter of the estimated useful lives of the assets or the lease term. |
Revenue Recognition | Revenue Recognition ASC Topic 606, Revenue from Contracts with Customers (“Topic 606” or the “new revenue standard”) Beginning July 1, 2018, we recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For enforceable contracts with our customers, we first identify the distinct performance obligations – or accounting units – within the contract. Performance obligations are commitments in a contract to transfer a distinct good or service to the customer. Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and we estimate the amount to include in the transaction price using the most likely method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not included in the transaction price until those approvals are received. At the end of each reporting period, we re-evaluate the probability of achievement of development milestones and any related constraint and, as necessary, we adjust our estimate of the overall transaction price. Any adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. To date, we have not recognized any material cumulative catch-up adjustments from changes in our estimate of the transaction price. We develop estimates of the stand-alone selling price for each distinct performance obligation and allocate the overall transaction price to each accounting unit based on a relative stand-alone selling price approach. We develop assumptions that require judgment to determine the stand-alone selling price for license-related performance obligations, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical, regulatory and commercial success. We estimate stand-alone selling price for research and development performance obligations by forecasting the expected costs of satisfying a performance obligation plus an appropriate margin. In the case of a license that is a distinct performance obligation, we recognize revenue from non-refundable, up-front fees at the point in time when the license is transferred to the licensee and the licensee can use and benefit from the license. For licenses that are bundled with other obligations, we use judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. If the performance obligation is satisfied over time, we evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. Revenue is recorded proportionally as costs are incurred. We generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation (an “input method” under Topic 606). We use judgment to estimate the total cost expected to complete the research and development performance obligations, which include subcontractors’ costs, labor, materials, other direct costs and an allocation of indirect costs. We evaluate these cost estimates and the progress each reporting period and, as necessary, we adjust the measure of progress and related revenue recognition. To date, we have not recognized any material cumulative catch-up adjustments from changes in our estimate of the measure of progress. For arrangements that include sales-based or usage-based royalties, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, we have not recognized any sales-based royalty revenue from license agreements. We recognized revenue associated with the following license agreements (in thousands): Years Ended June 30, 2019 2018 2017 KKC License Agreement $ 2,557 $ — $ — Helsinn License Agreement 2,358 1,622 23,249 $ 4,915 $ 1,622 $ 23,249 Timing of Revenue Recognition: License transferred at a point in time $ 879 $ — $ 20,880 Services performed over time 4,036 1,622 2,369 $ 4,915 $ 1,622 $ 23,249 Revenue for the year ended June 30, 2019 included revenue related to the KKC License Agreement (Note 2). Based on the characteristics of the KKC License Agreement, delivery of the license is a distinct performance obligation, and we recognized related revenue of $0.9 million during the year ended June 30, 2019 when the license was transferred to the licensee and the licensee could use and benefit from the license. The license agreement included other distinct performance obligations that will be satisfied over time, and accordingly we recognized $1.7 million related to our progress toward satisfying those obligations during the year ended June 30, 2019. Revenue for the years ended June 30, 2019, 2018 and 2017 included revenue related to the Helsinn License Agreement (Note 2). Based on the characteristics of the Helsinn License Agreement, control of the remaining deliverables occurs over time and therefore we recognize revenue based on the extent of progress towards completion of the performance obligations. As of June 30, 2019, we had $7.8 million of deferred revenue associated with our remaining performance obligations under the KKC and Helsinn license agreements. We expect to recognize approximately $5.0 million of deferred revenue in the next 12 months, and an additional $2.8 million thereafter. Contract Balances The following table presents changes in contract assets and contract liabilities during the year ended June 30, 2019 (in thousands): As of July 1, Net As of June 30, Receivables $ 82 $ (82 ) $ — Contract Assets $ 312 $ 374 $ 686 Contract Liabilities $ 788 $ 6,986 $ 7,774 The timing of revenue recognition, invoicing and cash collections results in billed accounts receivable and unbilled receivables (contract assets), which are classified as “prepaid expenses and other current assets” on our Balance Sheet, and deferred revenue (contract liabilities). We invoice our customers in accordance with agreed-upon contractual terms, typically at periodic intervals or upon achievement of contractual milestones. Invoicing may occur subsequent to revenue recognition, resulting in contract assets. We may receive advance payments from our customers before revenue is recognized, resulting in contract liabilities. The contract assets and liabilities reported on the Balance Sheet relate to the KKC License Agreement and Helsinn License Agreement. Accounting Standard Codification (“ASC”) Topic 605, Revenue Recognition (“Topic 605”) Revenue Recognition Payments received under commercial arrangements, such as licensing technology rights, may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements designated in the agreements, and royalties on the sale of products. We consider a variety of factors in determining the appropriate method of accounting under our license agreements, including whether the various elements can be separated and accounted for individually as separate units of accounting. Multiple Element Arrangements Deliverables under an arrangement will be separate units of accounting, provided (i) a delivered item has value to the customer on a standalone basis; and (ii) the arrangement includes a general right of return relative to the delivered item, and delivery or performance of the undelivered item is considered probable and substantially in our control. We account for revenue arrangements with multiple elements by separating and allocating consideration according to the relative selling price of each deliverable. If an element can be separated, an amount is allocated based upon the relative selling price of each element. We determine the relative selling price of a separate deliverable using the price we charge other customers when we sell that element separately. If the element is not sold separately and third party pricing evidence is not available, we will use our best estimate of selling price. License Fee Revenue Non-refundable, up-front fees that are not contingent on any future performance by us and require no consequential continuing involvement on our part are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. We defer recognition of non-refundable upfront license fees if we have continuing performance obligations, without which the licensed data, technology, or product has no utility to the licensee separate and independent of our performance under the other elements of the applicable arrangement. The specific methodology for the recognition of the revenue is determined on a case-by-case basis according to the facts and circumstances of the applicable agreement. Research and Development Revenue Research and development revenue represents ratable recognition of fees allocated to research and development activities. We defer recognition of research and development revenue until the performance of the related research and development activities has occurred. Research and development revenue for the year ended June 30, 2018 and 2017 related to services provided by third-party vendors related to research and development activities performed under the Helsinn License Agreement (Note 2). Cost of Revenue Cost of revenue primarily includes external costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials, and internal compensation and related personnel expenses to support our research and development performance obligations associated with the Helsinn License Agreement. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and include costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials. Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses. We expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials, and other events. Costs incurred related to the purchase or licensing of in-process |
Share-based Compensation | Share-based Compensation Share-based compensation expense for employees and directors is recognized in the Statement of Operations based on estimated amounts, including the grant date fair value and the expected service period. For stock options, we estimate the grant date fair value using a Black-Scholes valuation model, which requires the use of multiple subjective inputs including estimated future volatility, expected forfeitures and the expected term of the awards. We estimate the expected future volatility based on the stock’s historical price volatility. The stock’s future volatility may differ from the estimated volatility at the grant date. For restricted stock unit (“RSU”) equity awards, we estimate the grant date fair value using our closing stock price on the date of grant. We recognize the effect of forfeitures in compensation expense when the forfeitures occur. The estimated forfeiture rates may differ from actual forfeiture rates which would affect the amount of expense recognized during the period. We recognize the value of the awards over the awards’ requisite service or performance periods. The requisite service period is generally the time over which our share-based awards vest. |
Interest and Dividend Income | Interest and Dividend Income Interest on cash balances is recognized when earned. Dividend income is recognized when the right to receive the payment is established. |
Income Taxes | Income Taxes Our income tax expense consists of current and deferred income tax expense or benefit. Current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for the future tax consequences attributable to tax credits and loss carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of June 30, 2019 and 2018, we have established a valuation allowance to fully reserve our net deferred tax assets. Tax rate changes are reflected in income during the period such changes are enacted. Changes in our ownership may limit the amount of net operating loss carryforwards that can be utilized in the future to offset taxable income. In December 2017, the U.S government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act reduced the corporate tax rate from 34% to 21%, effective for tax years beginning January 1, 2018. We are subject to the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 740-10, Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), given the amount and complexity of the changes in tax law resulting from the Tax Act, the Company had not finalized the accounting for the income tax effects of the Tax Act as of June 30, 2018. In connection with our initial analysis of the impact of the Tax Act, the Company recorded a non-cash tax expense of $15.9 million during the year ended June 30, 2018, due to the re-measurement of our deferred tax assets and liabilities at the new U.S. federal tax rate, offset by a corresponding change to the Company’s valuation allowance. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, the Company completed our analysis based on legislative updates relating to the Tax Act currently available, and no material adjustments have been recorded as of June 30, 2019. The FASB Topic on Income Taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. |
Net (Loss) Income Per Share | Net (Loss) Income Per Share Basic and diluted net (loss) income per share are computed using the weighted-average number of shares of common stock outstanding during the period, less any shares subject to repurchase or forfeiture. There were no shares of common stock subject to repurchase or forfeiture for the years ended June 30, 2019, 2018 and 2017. Our potentially dilutive shares, which include outstanding stock options, restricted stock units, and warrants, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The assessment of dilution is made on a quarterly basis and therefore the annual determination of diluted net loss per share only includes those quarters in which the potential common stock equivalents were determined to be dilutive. For the years ended June 30, 2019, 2018 and 2017, we did not have any items that would be classified as other comprehensive income or losses. The following table presents the calculation of net loss (income) used to calculate basic and diluted loss (income) per share (in thousands): Years Ended June 30, 2019 2018 2017 Net (loss) income—basic $ (16,819 ) $ (40,068 ) $ 2,670 Change in fair value of warrant liability (37,794 ) — — Net (loss) income—diluted $ (54,613 ) $ (40,068 ) $ 2,670 Shares used in calculating net (loss) income per share was determined as follows (in thousands): Years Ended June 30, 2019 2018 2017 Weighted average shares outstanding 71,139 41,064 36,435 Effect of vested restricted stock units — 367 378 Weighted average shares used in calculating basic (loss) income per share 71,139 41,431 36,813 Effect of potentially dilutive common shares from equity awards and liability-classified warrants 1,246 — 125 Weighted average shares used in calculating diluted (loss) income per share 72,385 41,431 36,938 The following potentially dilutive shares (in thousands) that have been excluded from the calculation of net (loss) income per share because of their anti-dilutive effect: Years Ended June 30, 2019 2018 2017 Stock options 8,057 5,606 3,749 Restricted stock units 32 336 — Warrants 8,062 3,532 3,582 Total anti-dilutive shares 16,151 9,474 7,331 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update No. 2014-09 Revenue Recognition Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02 right-of-use A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We will adopt the new lease standard effective July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before July 1, 2019. The new standard provides a number of optional practical expedients in transition. We plan to elect the package of practical expedients, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We expect that this standard will not have a material effect on our financial statements. The most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real property operating lease; and (2) providing new disclosures about our leasing activities. On adoption, we currently expect to recognize an additional operating lease liability with a corresponding ROU asset of approximately $ 0.7 |
The Company and Summary of Si_3
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Schedule of Financial Instruments Measured at Fair Value on Recurring Basis | We measure the following financial instruments at fair value on a recurring basis. The fair values of these financial instruments were as follows (in thousands): June 30, 2019 June 30, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Warrant liability $ — $ — $ (17,613 ) $ — $ — $ (46,313 ) Total $ — $ — $ (17,613 ) $ — $ — $ (46,313 ) |
Schedule of Assumptions Used to Calculate Fair Value of Warrant Liability | To calculate the fair value of the warrant liability, the following assumptions were used: June 30, 2019 June 30, 2018 Risk-free interest rate 1.7 % 2.7 % Expected life (years) 3.8 4.8 Expected volatility 56.8 % 77.3 % Dividend yield 0.0 % 0.0 % Black-Scholes Fair Value $ 1.10 $ 2.81 |
Schedule of Changes in Estimated Fair Value of Warrant Liability | The following table sets forth a summary of changes in the estimated fair value of our Level 3 warrant liability for the year ended June 30, 2019 and 2018 (in thousands): Fair Value of Warrants Using Significant 2019 2018 Balance at July 1, $ 46,313 $ — Issuance of liability classified warrants — 36,608 Reclassification of derivative liability to equity upon exercise of warrants (1,068 ) — Change in estimated fair value of liability classified warrants (27,632 ) 9,705 Balance at June 30, $ 17,613 $ 46,313 |
Schedule Of Revenue Associated With License Agreement | We recognized revenue associated with the following license agreements (in thousands): Years Ended June 30, 2019 2018 2017 KKC License Agreement $ 2,557 $ — $ — Helsinn License Agreement 2,358 1,622 23,249 $ 4,915 $ 1,622 $ 23,249 Timing of Revenue Recognition: License transferred at a point in time $ 879 $ — $ 20,880 Services performed over time 4,036 1,622 2,369 $ 4,915 $ 1,622 $ 23,249 |
Schedule of Changes in Contract Assets and Contract Liabilities | The following table presents changes in contract assets and contract liabilities during the year ended June 30, 2019 (in thousands): As of July 1, Net As of June 30, Receivables $ 82 $ (82 ) $ — Contract Assets $ 312 $ 374 $ 686 Contract Liabilities $ 788 $ 6,986 $ 7,774 |
Schedule of Income (Loss) Per Share, Basic and Diluted | The following table presents the calculation of net loss (income) used to calculate basic and diluted loss (income) per share (in thousands): Years Ended June 30, 2019 2018 2017 Net (loss) income—basic $ (16,819 ) $ (40,068 ) $ 2,670 Change in fair value of warrant liability (37,794 ) — — Net (loss) income—diluted $ (54,613 ) $ (40,068 ) $ 2,670 |
Calculation of Weighted Average Shares Used to Calculate Basic and Diluted (Loss) Earnings Per Share | Shares used in calculating net (loss) income per share was determined as follows (in thousands): Years Ended June 30, 2019 2018 2017 Weighted average shares outstanding 71,139 41,064 36,435 Effect of vested restricted stock units — 367 378 Weighted average shares used in calculating basic (loss) income per share 71,139 41,431 36,813 Effect of potentially dilutive common shares from equity awards and liability-classified warrants 1,246 — 125 Weighted average shares used in calculating diluted (loss) income per share 72,385 41,431 36,938 |
Antidilutive Securities | The following potentially dilutive shares (in thousands) that have been excluded from the calculation of net (loss) income per share because of their anti-dilutive effect: Years Ended June 30, 2019 2018 2017 Stock options 8,057 5,606 3,749 Restricted stock units 32 336 — Warrants 8,062 3,532 3,582 Total anti-dilutive shares 16,151 9,474 7,331 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Schedule of Intangible Assets | Intangible assets consisted of the following, in thousands: June 30, 2019 2018 S*Bio Patents—Gross $ 500 $ 500 Less: accumulated amortization (239 ) (204 ) Intangible assets, net $ 261 $ 296 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Schedule of Property and Equipment | Property and equipment consisted of the following, in thousands: June 30, 2019 2018 Furniture and equipment $ 250 $ 81 Leasehold improvements 48 — 298 81 Less: accumulated depreciation (94 ) (49 ) Property and equipment, net $ 204 $ 32 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Accrued liabilities consisted of the following, in thousands: June 30, 2019 2018 Accrued pre-clinical and clinical trial expenses $ 2,014 $ 1,234 Accrued compensation and benefits 1,973 1,766 Accrued legal and professional services expenses 316 251 Other 256 203 Total accrued liabilities $ 4,559 $ 3,454 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Share-Based Compensation Expense for Stock Awards | Total share-based compensation expense for all stock awards consists of the following, in thousands: Years Ended June 30, 2019 2018 2017 Research and development $ 2,239 $ 1,176 $ 839 General and administrative 4,323 2,041 1,465 Total share-based compensation $ 6,562 $ 3,217 $ 2,304 |
Summary of Stock Option Activity and Related Data | A summary of our stock option activity and related data follows: Number of Weighted-Average Weighted-Average Aggregate Outstanding at June 30, 2018 6,281,615 $ 3.08 Granted 3,119,250 $ 3.90 Exercised (237,810 ) $ 1.78 Forfeited / Cancelled (452,240 ) $ 3.10 Expired (353,854 ) $ 8.30 Outstanding at June 30, 2019 8,356,961 $ 3.20 7.6 $ 2,571,190 Vested and exercisable at June 30, 2019 3,980,033 $ 2.86 6.3 $ 2,127,106 |
Nonvested Stock Option Activity | A summary of our nonvested stock option activity: Number of Weighted-Average Fair Value Nonvested at June 30, 2018 3,232,930 $ 2.15 Granted 3,119,250 $ 2.78 Forfeited (411,210 ) $ 2.28 Vested (1,564,042 ) $ 2.17 Nonvested at June 30, 2019 4,376,928 $ 2.58 |
Fair Value of Stock Options Weighted-Average Assumptions Used | We use a Black-Scholes valuation model to estimate the grant date fair value of stock options. To calculate these fair values, the following weighted-average assumptions were used: Years Ended June 30, 2019 2018 2017 Risk-free interest rate 2.7 % 2.3 % 1.3 % Expected life (years) 6.0 6.0 5.9 Expected volatility 82.5 % 93.7 % 107.4 % Dividend yield 0.0 % 0.0 % 0.0 % Weighted-average grant date fair value $ 2.78 $ 2.40 $ 1.15 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Pre-Tax Income (Loss) Information | P Years Ended June 30, 2019 2018 2017 Domestic $ (16,819 ) $ (40,068 ) $ 2,670 Foreign — — — P $ (16,819 ) $ (40,068 ) $ 2,670 |
Reconciliation of Income Taxes Computed at U.S Federal Statutory Tax Rates to Income Tax Expense | The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense is as follows (in thousands): Years Ended June 30, 2019 2018 2017 $ % $ % $ % Tax benefit (expense) at U.S. statutory rates $ 3,532 21 % $ 11,019 28 % $ (908 ) 34 % State tax 86 1 % (5,370 ) -13 % (158 ) 6 % Other (478 ) -3 % (537 ) -1 % (208 ) 8 % Capital loss carryover expiration — 0 % — 0 % (26,382 ) 988 % (Increase) decrease in valuation allowance (9,082 ) -54 % 14,914 37 % 27,655 -1036 % Revaluation of deferred taxes — 0 % (15,870 ) -40 % — 0 % Equity compensation 138 1 % (837 ) -2 % — 0 % Warrant liability costs 5,803 35 % (3,320 ) -8 % — 0 % $ (1 ) 0 % $ (1 ) 0 % $ (1 ) 0 % |
Deferred Tax Liabilities and Assets | Deferred tax liabilities and assets are comprised of the following (in thousands): June 30, 2019 2018 Deferred tax assets: Tax carried forward losses $ 18,510 $ 8,893 Fixed and intangible assets 15,328 17,790 Share-based payments 3,081 2,354 Capital lease obligation 1,635 171 Compensation accruals 85 367 Consultant and other accruals 41 35 Charitable contributions 22 11 Total deferred tax assets 38,702 29,621 Valuation allowance for deferred tax assets (38,702 ) (29,621 ) Net deferred tax assets and liabilities $ — $ — |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Unaudited Quarterly Results of Operations | The following table presents our unaudited quarterly results of operations for the years ended June 30, 2019 and 2018 (in thousands, except per share amounts). Quarters Ended Year Ended June 30, March 31, December September June 30, Total revenues $ 1,129 $ 1,249 $ 2,049 $ 488 $ 4,915 Net income (loss) (1) $ 3,052 $ (17,354 ) $ 12,025 $ (14,542 ) $ (16,819 ) Basic income (loss) per share $ 0.04 $ (0.24 ) $ 0.17 $ (0.21 ) $ (0.24 ) Diluted loss per share $ (0.15 ) $ (0.24 ) $ (0.15 ) $ (0.21 ) $ (0.75 ) Quarters Ended Year Ended June 30, March 31, December September June 30, Total revenues $ 548 $ 433 $ 358 $ 283 $ 1,622 Net income (loss) (1) $ (19,253 ) $ (5,948 ) $ (6,079 ) $ (8,788 ) $ (40,068 ) Basic income (loss) per share $ (0.36 ) $ (0.16 ) $ (0.16 ) $ (0.24 ) $ (0.97 ) Diluted income (loss) per share $ (0.36 ) $ (0.16 ) $ (0.16 ) $ (0.24 ) $ (0.97 ) (1) We have experienced large changes in our net income (loss) which relates to the change in fair value of the warrant liability for the years ended June 30, 2019 and 2018. Refer to Note 1 for further discussion. |
Company and Summary of Signific
Company and Summary of Significant Accounting Policies - Additional Information (Detail) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
May 31, 2014 | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($)ClinicalTrialsshares | Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($)shares | |
Targeted or Tracking Stock, Stock [Line Items] | |||||
Number of clinical stage candidates | ClinicalTrials | 4 | ||||
Number of candidate in an ongoing global registration trial | ClinicalTrials | 1 | ||||
Short-term investments | $ 64,899,000 | $ 64,899,000 | $ 89,434,000 | ||
Estimated life of the intellectual property | 14 years | ||||
Impairment of intangible assets | $ 0 | $ 0 | $ 0 | ||
Corporate tax rate | 21.00% | 21.00% | 28.00% | 34.00% | |
Non-Cash Tax Expense | $ 15,870,000 | ||||
Deferred Revenue Associated With Remaining Performance Obligation | $ 7,800,000 | $ 7,800,000 | |||
Unrecognized tax benefits | 0 | 0 | $ 0 | ||
Recognition Of Deferred Revenue | 5,000,000 | ||||
Additional Recognition Of Deferred Revenue | 2,800,000 | ||||
Revenue Recognised With Performance Obligation | $ 1,700,000 | ||||
Common stock subject to repurchase or forfeiture | shares | 0 | 0 | 0 | ||
Accumulated Losses Since Inception | (231,218,000) | $ (231,218,000) | $ (214,399,000) | ||
Cash And Cash Equivalents,Short Term Investments And Common Stock Proceeds Receivable | 79,800,000 | $ 79,800,000 | |||
Changes in unrecognized tax position | An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. | ||||
Accounting Standards Update 2014-09 [Member] | |||||
Targeted or Tracking Stock, Stock [Line Items] | |||||
Impact of adopted accounting standard | Did not have an impact on our financial statements. | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Targeted or Tracking Stock, Stock [Line Items] | |||||
Operating Lease, Liability | 700,000 | $ 700,000 | |||
Operating Lease, Right-of-Use Asset | $ 700,000 | $ 700,000 | |||
Minimum | |||||
Targeted or Tracking Stock, Stock [Line Items] | |||||
Property and equipment, estimated useful life | 3 years | ||||
Maximum | |||||
Targeted or Tracking Stock, Stock [Line Items] | |||||
Property and equipment, estimated useful life | 7 years | ||||
KHK License Agreement [Member] | |||||
Targeted or Tracking Stock, Stock [Line Items] | |||||
Revenue Recognised With Performance Obligation | $ 900,000 |
Schedule of Financial Instrumen
Schedule of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 | May 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Warrant liability | $ (17,613) | $ (46,313) | $ (36,600) |
Level 3 | Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Warrant liability | (17,613) | (46,313) | |
Total liability | $ (17,613) | $ (46,313) |
Schedule of Assumptions Used to
Schedule of Assumptions Used to Calculate Fair Value of Warrant Liability (Detail) - ClinicalTrials | Jun. 30, 2019 | Jun. 30, 2018 |
Risk Free Interest Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.7 | 2.7 |
Expected life years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 3.8 | 4.8 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 56.8 | 77.3 |
Dividend Yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 0 | 0 |
Black-Scholes Fair Value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and Rights Outstanding, Measurement Input | 1.10 | 2.81 |
Schedule of Changes in Estimate
Schedule of Changes in Estimated Fair Value of Warrant Liability (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Fair value measurements Significant unobservable inputs [Line Items] | ||
Beginning balance | $ 46,313 | |
Change in estimated fair value of liability classified warrants | 27,632 | $ (9,705) |
Ending balance | 17,613 | 46,313 |
Fair Value, Measurements, Recurring [Member] | Level 3 | ||
Fair value measurements Significant unobservable inputs [Line Items] | ||
Beginning balance | 46,313 | |
Issuance of liability classified warrants | 36,608 | |
Reclassification of derivative liability to equity upon exercise of warrants | (1,068) | |
Change in estimated fair value of liability classified warrants | (27,632) | 9,705 |
Ending balance | $ 17,613 | $ 46,313 |
The Company - Revenue Associate
The Company - Revenue Associated With The Following license agreements (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Recognized Revenue Associated with The Following License Agreements [Line Items] | |||||||||||
Revenues | $ 1,129 | $ 1,249 | $ 2,049 | $ 488 | $ 548 | $ 433 | $ 358 | $ 283 | $ 4,915 | $ 1,622 | $ 23,249 |
KKC License Agreement [Member] | |||||||||||
Recognized Revenue Associated with The Following License Agreements [Line Items] | |||||||||||
Revenues | 2,557 | ||||||||||
Helsinn License Agreement [Member] | |||||||||||
Recognized Revenue Associated with The Following License Agreements [Line Items] | |||||||||||
Revenues | 2,358 | 1,622 | 23,249 | ||||||||
License transferred at a point in time [Member] | |||||||||||
Recognized Revenue Associated with The Following License Agreements [Line Items] | |||||||||||
Revenues | 879 | 20,880 | |||||||||
Services performed over time [Member] | |||||||||||
Recognized Revenue Associated with The Following License Agreements [Line Items] | |||||||||||
Revenues | $ 4,036 | $ 1,622 | $ 2,369 |
The Company - Schedule of Chang
The Company - Schedule of Changes in Contract Assets and Contract Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Contract with Customer Asset and Liability [Line Items] | |||
Receivables Beginning Balance | $ 82 | ||
Net Change | (82) | ||
Receivables Ending Balance | 0 | ||
Contract Assets Beginning Balance | 312 | ||
Net Change | 374 | ||
Contract Assets Ending Balance | 686 | $ 312 | |
Contract Liabilities Beginning Balance | 788 | ||
Net Change | 6,986 | (208) | $ 996 |
Contract Liabilities Ending Balance | $ 7,774 | $ 788 |
Calculation of Net (Loss) Incom
Calculation of Net (Loss) Income Used to Calculate Basic and Diluted (Loss) Per Share (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Potentially Dilutive Securities Outstanding [Line Items] | |||
Net (loss) income—basic | $ (16,819) | $ (40,068) | $ 2,670 |
Change in fair value of warrant liability | (37,794) | ||
Net (loss) income—diluted | $ (54,613) | $ (40,068) | $ 2,670 |
Calculation of Weighted Average
Calculation of Weighted Average Shares Used to Calculate Basic and Diluted (Loss) Earnings Per Share (Detail) - shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average shares outstanding | 71,139 | 41,064 | 36,435 |
Effect of vested restricted stock units | 367 | 378 | |
Weighted average shares used in calculating basic (loss) income per share | 71,139 | 41,431 | 36,813 |
Effect of potentially dilutive common shares from equity awards and liability-classified warrants | 1,246 | 125 | |
Weighted average shares used in calculating diluted (loss) income per share | 72,385 | 41,431 | 36,938 |
Antidilutive Securities (Detail
Antidilutive Securities (Detail) - shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Potentially Dilutive Securities Outstanding [Line Items] | |||
Total anti-dilutive shares | 16,151 | 9,474 | 7,331 |
Employee Stock Option | |||
Potentially Dilutive Securities Outstanding [Line Items] | |||
Total anti-dilutive shares | 8,057 | 5,606 | 3,749 |
Restricted Stock Units (RSUs) | |||
Potentially Dilutive Securities Outstanding [Line Items] | |||
Total anti-dilutive shares | 32 | 336 | |
Warrants | |||
Potentially Dilutive Securities Outstanding [Line Items] | |||
Total anti-dilutive shares | 8,062 | 3,532 | 3,582 |
License Agreements - Additional
License Agreements - Additional Information (Detail) - USD ($) | Aug. 31, 2016 | Oct. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | |||||
Manufacturing rights commencing period | 3 years | ||||
Percentage of Purchase Requirement | 100.00% | 100.00% | |||
License and supply agreement notice period | 90 days | ||||
Potential Regulatory and Sales-Based Milestone Payment | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Milestone payment receivable amount | $ 444,000,000 | ||||
Kyowa Kirin Co | |||||
Related Party Transaction [Line Items] | |||||
Upfront payment | $ 10,000,000 | ||||
License agreement expiry period | 10 years | ||||
Kyowa Kirin Co | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Development and commercialization milestones payment | $ 87,500,000 | ||||
Helsinn License Agreement | |||||
Related Party Transaction [Line Items] | |||||
Compensation Receivable For Grant Of Rights | $ 20,000,000 | ||||
Presage License Agreement | Presage Biosciences, Inc. | |||||
Related Party Transaction [Line Items] | |||||
Compensation payable for grant of rights | $ 4,900,000 | ||||
Payment for license | 2,900,000 | ||||
Presage License Agreement | Presage Biosciences, Inc. | Incremental Payment | |||||
Related Party Transaction [Line Items] | |||||
Compensation payable for grant of rights | 2,000,000 | ||||
Presage License Agreement | Presage Biosciences, Inc. | Potential Payments on Achievement of Development Regulatory and Commercial Milestones | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Milestone payments payable amount | $ 179,000,000 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 261 | $ 296 |
S*Bio Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets - Gross | 500 | 500 |
Less: accumulated amortization | (239) | (204) |
Intangible assets, net | $ 261 | $ 296 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 35,000 | $ 35,000 | $ 35,000 |
S*Bio Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Expected amortization expense per year | $ 35,000 | ||
Amortization period | 2026 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 298 | $ 81 |
Less: accumulated depreciation | (94) | (49) |
Property and equipment, net | 204 | 32 |
Furniture And Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 250 | 81 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 48 | $ 0 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 45,000 | $ 18,000 | $ 50,000 |
Accrued Liabilities (Detail)
Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Accrued Liabilities [Line Items] | ||
Accrued pre-clinical and clinical trial expenses | $ 2,014 | $ 1,234 |
Accrued compensation and benefits | 1,973 | 1,766 |
Accrued legal and professional services expenses | 316 | 251 |
Other | 256 | 203 |
Total accrued liabilities | $ 4,559 | $ 3,454 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Aug. 16, 2016 | May 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Nov. 30, 2017 |
Class of Stock [Line Items] | ||||||
Issuance of common stock and warrants | $ 220,000 | $ 70,151,000 | $ 4,212,000 | |||
Fair value of warrants | $ 36,600,000 | 17,613,000 | $ 46,313,000 | |||
Aggregate value of securities available under shelf registration statement | $ 144,400,000 | |||||
Total authorized share capital | 226,100,000 | |||||
Common stock, shares authorized | 226,000,000 | 226,000,000 | ||||
Common stock, par value | $ 0.00 | $ 0.00 | ||||
Preferred stock, shares authorized | 100,000 | 100,000 | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Common stock voting rights | one vote per share | |||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Warrants exercised for common stock | $ 440,043 | |||||
Proceeds from warrant exercised | 1,118,000 | |||||
Common stock Value Issued | 5,444,000 | $ 4,212,000 | ||||
Common Stock, Share Subscribed but Unissued, Subscriptions Receivable | $ 5,274,000 | |||||
Helsinn Investment Fund SA | Helsinn Equity Agreement | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of common stock issued | 2,616,431 | |||||
Proceeds from sale of equity method investment | $ 5,000,000 | |||||
ATM Sales Agreement | ||||||
Class of Stock [Line Items] | ||||||
Common stock share issued | 2,214,658 | |||||
Common stock Value Issued | $ 5,400,000 | |||||
Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock and warrants | $ 70,200,000 | |||||
Common stock share issued | 33,003,296 | |||||
Common stock share issued, per share | $ 2.27 | |||||
Number of warrants to purchase | 16,501,645 | |||||
Exercise price | $ 2.54 | |||||
Warrants expiration date | 2023-05 | |||||
Warrants outstanding | 16,061,602 | |||||
Maximum | ||||||
Class of Stock [Line Items] | ||||||
Sale of shares and warrants under agreement | $ 150,000,000 | |||||
Maximum | ATM Sales Agreement | ||||||
Class of Stock [Line Items] | ||||||
Sale of shares under agreement | $ 30,000,000 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Aug. 31, 2018 | Jun. 30, 2016 | Mar. 31, 2013 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation expense related to unvested stock options | $ 5.6 | $ 5.6 | |||||
Expected weighted average period for recognition of compensation expense | 1 year 9 months 18 days | ||||||
Total fair value of options vested | $ 3.4 | $ 2.4 | $ 2.4 | ||||
Options outstanding | 8,356,961 | 8,356,961 | 6,281,615 | ||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock option vested percentage | 25.00% | ||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 36 months | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issuance of shares | 271,080 | ||||||
Fair value of RSUs on the date of grant | $ 3.5 | ||||||
Restricted Stock Units (RSUs) | Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
RSUs granted | 332,193 | 364,726 | |||||
Number of common stock to be received for each RSUs | 1 | 1 | |||||
RSUs grant date fair value per unit | $ 245,782 | $ 1.61 | |||||
Shares withheld to satisfy tax withholding obligations | 86,411 | ||||||
Restricted Stock Units (RSUs) | Chief Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
RSUs granted | 400,000 | ||||||
Number of common stock to be received for each RSUs | 1 | ||||||
Stock Compensation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Closing price of common stock | $ 2.50 | $ 2.50 | |||||
2008 Omnibus Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock authorized | 19,089,794 | 19,089,794 | |||||
Shares available for future grant | 9,486,844 | 9,486,844 | |||||
Maximum [Member] | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, expiration period | 10 years | ||||||
Minimum [Member] | Directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 12 months | ||||||
Minimum [Member] | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, expiration period | 5 years |
Share-Based Compensation Expens
Share-Based Compensation Expense for Stock Awards (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 6,562 | $ 3,217 | $ 2,304 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 2,239 | 1,176 | 839 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 4,323 | $ 2,041 | $ 1,465 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Detail) | 12 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Number of Options | |
Beginning Balance | shares | 6,281,615 |
Granted | shares | 3,119,250 |
Exercised | shares | (237,810) |
Forfeited / Cancelled | shares | (452,240) |
Expired | shares | (353,854) |
Ending balance | shares | 8,356,961 |
Vested and exercisable at end of period | shares | 3,980,033 |
Weighted- Average Exercise Price | |
Beginning Balance | $ / shares | $ 3.08 |
Granted | $ / shares | 3.90 |
Exercised | $ / shares | 1.78 |
Forfeited / Cancelled | $ / shares | 3.10 |
Expired | $ / shares | 8.30 |
Ending balance | $ / shares | 3.20 |
Vested and exercisable at end of period | $ / shares | $ 2.86 |
Weighted Average Remaining Contractual Term (in years) | |
Outstanding at end of period | 7 years 7 months 6 days |
Vested and exercisable at end of period | 6 years 3 months 18 days |
Aggregate Intrinsic Value | |
Outstanding at end of period | $ | $ 2,571,190 |
Vested and exercisable at end of period | $ | $ 2,127,106 |
Nonvested Stock Option Activity
Nonvested Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Number of options | |||
Beginning balance | 3,232,930 | ||
Granted | 3,119,250 | ||
Forfeited | (411,210) | ||
Vested | (1,564,042) | ||
Ending balance | 4,376,928 | 3,232,930 | |
Weighted average grant date fair value | |||
Beginning balance | $ 2.15 | ||
Granted | 2.78 | $ 2.40 | $ 1.15 |
Forfeited | 2.28 | ||
Vested | 2.17 | ||
Ending balance | $ 2.58 | $ 2.15 |
Fair Value of Stock Options Wei
Fair Value of Stock Options Weighted-Average Assumptions Used (Detail) - $ / shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.70% | 2.30% | 1.30% |
Expected life (years) | 6 years | 6 years | 5 years 10 months 24 days |
Expected volatility | 82.50% | 93.70% | 107.40% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average grant date fair value | $ 2.78 | $ 2.40 | $ 1.15 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Aug. 31, 2017USD ($)shares | Dec. 31, 2018 | Jun. 30, 2019USD ($)ft² | Jun. 30, 2018USD ($) | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Lease arrangement rent area, square feet | ft² | 20,800 | |||
Lease rental rate | $ 67,000 | |||
Lease Commencement Month And Year | 2017-07 | |||
Lease expiration month and year | 2020-05 | |||
Remaining contractual obligation | $ 700,000 | |||
Future aggregate milestone payments | $ 75,200,000 | |||
Percentage of Purchase Requirement | 100.00% | 100.00% | ||
Common stock value | ||||
Phase Three Clinical Trial | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
First milestone payment | $ 200,000 | |||
Common stock value | $ 166,527 | |||
Issuance of common stock to purchase asset, shares | shares | shares | 500,000 | |||
S*Bio Purchase Agreement | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Accrued payment for potential future payments | 0 | |||
CyDex License Agreement | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Accrued payment for potential future payments | 0 | |||
Presage License Agreement | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Accrued payment for potential future payments | $ 0 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
Jun. 30, 2019Segment | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | 1 |
Pre- Tax Income (Loss) Jurisdic
Pre- Tax Income (Loss) Jurisdictions (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pre tax Income Loss [Line Items] | |||
Domestic | $ (16,819) | $ (40,068) | $ 2,670 |
Foreign | 0 | 0 | 0 |
Pre-tax income (loss) | $ (16,819) | $ (40,068) | $ 2,670 |
Reconciliation of Income Taxes
Reconciliation of Income Taxes Computed at U.S Federal Statutory Tax rates to Income Tax Expense (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation Of Statutory Federal Tax Rate [Line Items] | ||||
Tax benefit (expense) at U.S. statutory rates | $ 3,532 | $ 11,019 | $ (908) | |
State tax | 86 | (5,370) | (158) | |
Other | (478) | (537) | (208) | |
Capital loss carryover expiration | (26,382) | |||
(Increase) decrease in valuation allowance | (9,082) | 14,914 | 27,655 | |
Revaluation of deferred taxes | (15,870) | |||
Equity compensation | 138 | (837) | ||
Warrant liability costs | 5,803 | (3,320) | ||
Income tax expense | $ (1) | $ (1) | $ (1) | |
Tax benefit (expense) at U.S. statutory rates | 21.00% | 21.00% | 28.00% | 34.00% |
State tax | 1.00% | (13.00%) | 6.00% | |
Other | (3.00%) | (1.00%) | 8.00% | |
Capital loss carryover expiration | 0.00% | 0.00% | 988.00% | |
(Increase) decrease in valuation allowance | (54.00%) | 37.00% | (1036.00%) | |
Revaluation of deferred taxes | 0.00% | (40.00%) | 0.00% | |
Equity compensation | 1.00% | (2.00%) | 0.00% | |
Warrant liability costs | 35.00% | (8.00%) | 0.00% | |
Effective Income Tax Rate, Continuing Operations, Total | 0.00% | 0.00% | 0.00% |
Deferred Tax Liabilities and As
Deferred Tax Liabilities and Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred tax assets: | ||
Tax carried forward losses | $ 18,510 | $ 8,893 |
Fixed and intangible assets | 15,328 | 17,790 |
Share-based payments | 3,081 | 2,354 |
Capital lease obligation | 1,635 | 171 |
Compensation accruals | 85 | 367 |
Consultant and other accruals | 41 | 35 |
Charitable contributions | 22 | 11 |
Total deferred tax assets | 38,702 | 29,621 |
Valuation allowance for deferred tax assets | (38,702) | (29,621) |
Net deferred tax assets and liabilities | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Income Taxes Line Items [Line Items] | |
Federal net operating loss carry forwards | $ 81.8 |
State net operating loss carry forwards | 19 |
After Tax Reform [Member] | |
Income Taxes Line Items [Line Items] | |
Federal net operating loss carry forwards | 61.7 |
Before Tax Reform [Member] | |
Income Taxes Line Items [Line Items] | |
Federal net operating loss carry forwards | $ 20.1 |
Federal [Member] | |
Income Taxes Line Items [Line Items] | |
Expiration year of operating loss carry forwards | 2022 |
State | |
Income Taxes Line Items [Line Items] | |
Expiration year of operating loss carry forwards | 2030 |
Quarterly Financial Information
Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||||||||||||
Total revenues | $ 1,129 | $ 1,249 | $ 2,049 | $ 488 | $ 548 | $ 433 | $ 358 | $ 283 | $ 4,915 | $ 1,622 | $ 23,249 | ||||||||||
Net income (loss) | $ 3,052 | [1] | $ (17,354) | [1] | $ 12,025 | [1] | $ (14,542) | [1] | $ (19,253) | [1] | $ (5,948) | [1] | $ (6,079) | [1] | $ (8,788) | [1] | $ (16,819) | [1] | $ (40,068) | [1] | $ 2,670 |
Basic income (loss) per share | $ 0.04 | $ (0.24) | $ 0.17 | $ (0.21) | $ (0.36) | $ (0.16) | $ (0.16) | $ (0.24) | $ (0.24) | $ (0.97) | $ 0.07 | ||||||||||
Earnings Per Share, Diluted | $ (0.15) | $ (0.24) | $ (0.15) | $ (0.21) | $ (0.36) | $ (0.16) | $ (0.16) | $ (0.24) | $ (0.75) | $ (0.97) | $ 0.07 | ||||||||||
[1] | We have experienced large changes in our net income (loss) which relates to the change in fair value of the warrant liability for the years ended June 30, 2019 and 2018. Refer to Note 1 for further discussion. |