Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MARINUS PHARMACEUTICALS INC | ||
Entity Central Index Key | 1,267,813 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 81,356,124 | ||
Entity Common Stock, Shares Outstanding | 19,509,220 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 51,722 | $ 49,720 |
Short-term Investments | 4,474 | |
Prepaid expenses and other current assets | 1,571 | 428 |
Total current assets | 57,767 | 50,148 |
Property and equipment, net | 31 | 44 |
Investments | 1,488 | |
Other assets | 376 | 21 |
Total assets | 59,662 | 50,213 |
Current liabilities: | ||
Current portion of notes payable | 2,128 | |
Accounts payable | 3,146 | 536 |
Accrued expenses | 2,161 | 1,503 |
Total current liabilities | 7,435 | 2,039 |
Notes payable | 5,250 | 7,000 |
Other long-term liabilities | 56 | 20 |
Total liabilities | $ 12,741 | $ 9,059 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value; 25,000,000 shares authorized, 0 shares issued and outstanding | ||
Common stock, $0.001 par value; 100,000,000 shares authorized, 19,420,086 issued and 19,390,855 outstanding at December 31, 2015 and 14,036,985 issued and 14,007,754 outstanding at December 31, 2014 | $ 19 | $ 14 |
Additional paid-in capital | $ 144,088 | $ 113,476 |
Treasury stock at cost, 29,231 shares at December 31, 2015 and 2014 | ||
Accumulated deficit | $ (97,186) | $ (72,336) |
Total stockholders’ equity | 46,921 | 41,154 |
Total liabilities and stockholders’ equity | $ 59,662 | $ 50,213 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,420,086 | 14,036,985 |
Common stock, shares outstanding | 19,390,855 | 14,007,754 |
Treasury stock, shares | 29,231 | 29,231 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Expenses: | ||
Research and development | $ 18,916 | $ 8,690 |
General and administrative | 5,516 | 3,230 |
Loss from operations | (24,432) | (11,920) |
Change in fair value of warrant liability | 1,192 | |
Interest income | 64 | 12 |
Interest expense | (475) | (117) |
Other expense | (7) | |
Net loss | (24,850) | (10,833) |
Cumulative preferred stock dividends | (2,545) | |
Net loss applicable to common stockholders | $ (24,850) | $ (13,378) |
Per share information: | ||
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (1.67) | $ (2.17) |
Basic and diluted weighted average shares outstanding (in shares) | 14,919,783 | 6,152,669 |
STATEMENTS OF CONVERTIBLE PREFE
STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | $ 1 | $ 1,121 | $ (61,503) | $ (60,381) | ||||
Balance (in shares) at Dec. 31, 2013 | 494,260 | 29,231 | ||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||||
Stock-based compensation expense | 698 | 698 | ||||||
Exercise of stock options | 128 | 128 | ||||||
Exercise of stock options (in shares) | 122,634 | |||||||
Conversion of convertible preferred stock to common stock | $ (30,596) | $ (17,929) | $ (21,814) | $ 7 | 70,333 | 70,340 | ||
Conversion of convertible preferred stock to common stock (in shares) | (18,777,860) | (12,220,661) | (18,803,582) | 7,661,871 | ||||
Exercise and conversion of convertible preferred stock warrants into common stock (in shares) | 220 | |||||||
Issuance of common stock in connection with initial public offering ($8.00 per share and $6 per share for the year ended 2014 and 2015), net of expenses of $4,862 and $2,200 for the year ended 2014 and 2015 | $ 6 | 41,196 | 41,202 | |||||
Common stock issued (in shares) | 5,758,000 | |||||||
Net loss | (10,833) | (10,833) | ||||||
Balance at Dec. 31, 2014 | $ 14 | 113,476 | (72,336) | 41,154 | ||||
Balance (in shares) at Dec. 31, 2014 | 14,036,985 | 29,231 | ||||||
Balance at Dec. 31, 2013 | $ 30,596 | $ 17,929 | $ 21,314 | |||||
Balance (in shares) at Dec. 31, 2013 | 18,777,860 | 12,220,661 | 18,381,463 | |||||
Increase (Decrease) in Temporary Equity | ||||||||
Issuance of Series C preferred stock | $ 500 | |||||||
Issuance of Series C preferred stock (in shares) | 422,119 | |||||||
Stock-based compensation expense | 2,108 | 2,108 | ||||||
Exercise of stock options | 373 | 373 | ||||||
Exercise of stock options (in shares) | 327,098 | |||||||
Issuance of common stock in connection with initial public offering ($8.00 per share and $6 per share for the year ended 2014 and 2015), net of expenses of $4,862 and $2,200 for the year ended 2014 and 2015 | $ 5 | 28,131 | 28,136 | |||||
Common stock issued (in shares) | 5,056,003 | |||||||
Net loss | (24,850) | (24,850) | ||||||
Balance at Dec. 31, 2015 | $ 19 | $ 144,088 | $ (97,186) | $ 46,921 | ||||
Balance (in shares) at Dec. 31, 2015 | 19,420,086 | 29,231 |
STATEMENTS OF CONVERTIBLE PREF6
STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
Share Price (in dollars per share) | $ 6 | $ 8 |
Stock issuance costs | $ 2,200 | $ 4,862 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (24,850) | $ (10,833) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 11 | 5 |
Stock-based compensation expense | 2,108 | 698 |
Change in fair value of warrant liability | (1,192) | |
Amortization of debt issuance costs | 7 | 4 |
Loss on disposal of fixed assets | 2 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (947) | 1,344 |
Accounts payable and accrued expenses | 3,540 | 1,385 |
Net cash used in operating activities | (20,129) | (8,589) |
Cash flows from investing activities | ||
Purchases of investments | (7,705) | (33) |
Maturities of short-term investments | 1,743 | |
Deposit on equipment | (352) | |
Net cash used in investing activities | (6,314) | (33) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 373 | 128 |
Repayment of notes payable | (206) | |
Proceeds from initial public offering, net of offering costs | 28,278 | 41,202 |
Proceeds from notes payable, net of issuance costs | 6,975 | |
Net cash provided by financing activities | 28,445 | 48,305 |
Net increase in cash and cash equivalents | 2,002 | 39,683 |
Cash and cash equivalents-beginning of period | 49,720 | 10,037 |
Cash and cash equivalents-end of period | 51,722 | 49,720 |
Supplemental disclosure of cash flow information | ||
Conversion of preferred stock to common stock | 70,340 | |
Cash paid for interest | 468 | 89 |
Financing arrangement with third-party vendor | 584 | |
Issuance of Series C Preferred Stock | $ 500 | |
Accrued public offering costs | $ 142 |
Organization and Description of
Organization and Description of the Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Description of the Business | |
Organization and Description of the Business | 1. Organization and Description of the Business We are a clinical stage biopharmaceutical company focused on developing and commercializing innovative therapeutics to treat epilepsy and neuropsychiatric disorders. Our clinical stage product candidate, ganaxolone, is a CNS ‑selective GABA A modulator being developed in three different dose forms (IV, oral capsule and oral liquid) intended to provide more treatment options to adult and pediatric patient populations in both acute and chronic care settings. Ganaxolone acts on the GABA A receptor, a well ‑characterized target in the brain known for both anti ‑seizure and anti ‑anxiety effects through positive allosteric modulation. Our primary focus to date has been directed towards developing business strategies, raising capital, conducting research and development activities, and conducting preclinical testing and human clinical trials of our product candidates . Liquidity We have not generated any product revenues and have incurred operating losses since inception. There is no assurance that profitable operations will ever be achieved, and if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing, and commercialization of our product candidates will require significant additional financing. Our accumulated deficit as of December 31, 2015 was $97. 2 million and we expect to incur substantial losses in future periods. We plan to finance our future operations with a combination of proceeds from the issuance of equity securities, the issuance of additional debt, potential collaborations and revenues from potential future product sales, if any. We have not generated positive cash flows from operations, and there are no assurances that we will be successful in obtaining an adequate level of financing for the development and commercialization of our planned product candidates. In connection with the closing of a secondary public offering during the fourth quarter of 2015, we issued a total of 5,056,003 shares of common stock resulting in aggregate net proceeds, after underwriting discounts and commissions and other estimated offering expenses, of approximately $28. 1 million. We believe that our cash, cash equivalents and investment balance as of December 31, 2015 is adequate to fund our operations into the second half of 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Fair Value of Financial Instruments and Credit Risk At December 31, 2015 and 2014, our financial instruments included cash equivalents, certificates of deposit, accounts payable, accrued expenses, and notes payable. The carrying amount of cash equivalents, certificates of deposit, accounts payable and accrued expenses approximated fair value, given their short-term nature. The carrying amount of our notes payable approximate fair value because the interest rates on these instruments are reflective of rates that we could obtain on debt with similar terms and conditions. Cash equivalents and certificates of deposit subject us to concentrations of credit risk. However, we invest our cash in accordance with a policy objective that seeks to ensure both liquidity and safety of principal. The policy limits investments to instruments issued by the U.S. government, certain SEC-registered money market funds that invest only in U.S. government obligations and various other low-risk liquid investment options, and places restrictions on portfolio maturity terms. Cash and Cash Equivalents We consider all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. As of December 31, 2015 and 2014, we invested a portion of our cash balances in money market investments, which we have included as cash equivalents on our balance sheets. Investments Investments purchased with a maturity of more than three months and less than twelve months are classified as short-term investments. Investments purchased with a remaining maturity greater than twelve months are classified as long-term investments. We plan to hold these investments to maturity and have classified these investments as such as defined by GAAP. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets generally represent payments made for goods or services to be received within one year, and are expensed as the related benefit is received. As of December 31, 2015, this balance included a deposit of $1.0 million for clinical manufacturing supplies to be used in connection with our clinical trials. Property and Equipment Property and equipment consist of laboratory and office equipment and are recorded at cost. Property and equipment are depreciated on a straight ‑line basis over their estimated useful lives. We estimate a life of three years for computer equipment, including software, and five years for laboratory equipment, office equipment, and furniture. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operating expenses. Impairment of Long ‑Lived Assets We review long ‑lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount an impairment loss would be recognized if the carrying value of the asset exceeded its fair value. Fair value is generally determined using discounted cash flows. Through December 31, 2015, no impairment has occurred. Research and Development Research and development costs are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. At December 31, 2015 and 2014, we have concluded that a full valuation allowance is necessary for our net deferred tax assets. We had no material amounts recorded for uncertain tax positions, interest or penalties in the accompanying financial statements. Loss Per Share of Common Stock Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, warrants, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation. These potentially dilutive securities are more fully described in Note 7. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2015 and 2014 (in thousands, except share and per share amounts): Year Ended December 31, 2015 2014 Basic and diluted net loss per share of common stock: Net loss $ $ Dividends on Series B and C Preferred Stock — Net loss applicable to common stockholders $ $ Weighted average shares of common stock outstanding Net loss per share of common stock—basic and diluted $ $ Our outstanding stock options, which were 1,799,226 and 1,670,574 as of December 31, 2015 and 2014, respectively, have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive. As of December 31, 2015 and 2014, we had no other potentially dilutive securities. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non ‑owner sources. Comprehensive loss was equal to net loss for all periods presented. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision ‑making group, in deciding how to allocate resources and in assessing performance. We view our operations and manage our business in one segment, which is the identification and development of neuropsychiatric therapeutics. Stock ‑Based Compensation We account for stock ‑based compensation in accordance with the provisions of Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation, or ASC 718, which requires the recognition of expense related to the fair value of stock ‑based awards in the statements of operations. For stock options issued to employees and members of our board of directors for their services on our board of directors, we estimate the grant ‑date fair value of options using the Black ‑Scholes option pricing model. The use of the Black ‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk ‑free interest rates, and , for grants prior to our initial public offering, the value of the common stock. For awards subject to time ‑based vesting, we recognize stock ‑based compensation expense, net of estimated forfeitures, on a straight ‑line basis over the requisite service period, which is generally the vesting term of the award. For awards subject to performance ‑based vesting conditions, we recognize stock ‑based compensation expense when it is probable that the performance condition will be achieved. Stock ‑based awards issued to non ‑employees are recorded at their fair values, and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and ASC Topic 505, Equity. Clinical Trial Expense Accruals As part of the process of preparing our financial statements, we are required to estimate our expenses resulting from our obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. Our objective is to reflect the appropriate trial expenses in our financial statements by matching those expenses with the period in which services are performed and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates based on estimates of services received and efforts expended that take into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from its estimates. We make estimates of our accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. Our clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third ‑party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. For the years ended December 31, 2015 and 2014, there were no material adjustments to our prior period estimates of accrued expenses for clinical trials. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board ( FASB) issued Accounting Standards Update ( ASU) No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern , which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not expect the adoption of this ASU to have a material effect on our interim or annual financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , which changes the presentation of debt issuance costs in financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The guidance in the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is allowed for all entities for financial statements that have not been previously issued. Entities would apply the new guidance retrospectively to all prior periods (i.e., the balance sheet for each period is adjusted). We do not expect the adoption of this ASU to have a material effect on our interim or annual financial statements . In February 2016, the FASB issued ASU 2016-02, Leases , which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We have not evaluated the impact of the updated guidance on our financial statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements F ASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: · Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. · Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands): Level 1 Level 2 Level 3 Total December 31, 2015 Assets Money market funds (cash equivalents) $ $ — $ — $ Certificates of deposit — — December 31, 2014 Assets Money market funds (cash equivalents) $ $ — $ — $ |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Property and equipment consisted of the following (in thousands) : December 31, 2015 2014 Laboratory equipment $ $ Office equipment Less: accumulated depreciation $ $ Depreciation expense was $11 thousand and $5 thousand for the years ended December 31, 2015 and 2014, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses At December 31, 2015 and 2014 , accrued expenses consisted of the following (in thousands) : December 31, 2015 2014 Payroll and related costs Clinical trials and drug development Professional fees Other Total accrued expenses $ $ |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable | |
Notes Payable | 6. Notes Payable In April 2014, we borrowed $2.0 million pursuant to a Loan and Security Agreement (LSA) we entered into with a financial institution. Pursuant to the terms of the LSA, we made monthly interest-only payments for outstanding borrowings at an interest rate equal to the greater of (a) prime plus 2.25% or (b) 5.5% until the LSA was amended in December 2014. In December 2014, we entered into a First Amendment to Loan and Security Agreement, and in February 2015 and October 2015 we entered into a Second and Third Amendment to Loan and Security Agreement (collectively, “the Amended LSA”) with the same financial institution. The Amended LSA increased the total term loan availability from $2.0 million to $12.0 million, available in four tranches (in thousands ): Term Loan Term Loan Tranche Available Borrowed Borrowed Date A $ $ April 2014 B December 2014 C — * D — * $ $ *As of December 31, 2015, we have the ability to borrow under Tranche D. Our ability to borrow under Tranche C is conditioned upon meeting certain clinical trial milestones, which must be met by March 31, 2016. The availability end date for Tranches C and D is March 31, 2016 . In connection with the Amended LSA, we borrowed $5.0 million available to us under Tranche B in December 2014. As of December 31, 2015, and pursuant to the terms of the Amended LSA, we were required to make monthly interest-only payments for all outstanding borrowings at an interest rate equal to the greater of (a) prime rate plus 3.25% or (b) 6.5% until March 2016. Commencing in April 2016 and continuing through March 2018, we are required to make monthly payments of 1/24th of our principal borrowings plus interest. In January 2016, we achieved certain clinical trial milestones, that resulted in the extension of both the interest-only period and principal maturity dates by three months. As of December 31, 2015, of our outstanding term loan balance of $7.0 mill ion, $1.8 milli on will be due within the next twelve months, and is classified as the current portion of notes payable on our balance sheet. Interest expense related to the term loans was $461 thousand and $117 thousand for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, we had accrued interest of $39 thousand. There are no financial covenants associated with these term loans. As of December 31, 2015, we were in compliance with all non-financial covenants . Vendor Debt In August 2015, the Company entered into a short-term loan agreement with a third-party vendor to finance insurance premiums. The aggregate amount financed under this agreement was $584 thousand. As of December 31, 2015, there was a balance of $378 thousand, which will be repaid in monthly installments through September 2016. Maturities of our debt obligations over the next five years are as follows (in thousands): Debt Maturities 2016 $ 2017 2018 Total maturities $ |
Stock Option and Incentive Plan
Stock Option and Incentive Plans | 12 Months Ended |
Dec. 31, 2015 | |
Stock Option and Incentive Plans | |
Stock Option and Incentive Plans | 7. Stock Option and Incentive Plans In 2005, we adopted the 2005 Stock Option and Incentive Plan (2005 Plan) that authorizes us to grant options, restricted stock and other equity-based awards. As of December 31, 2015, 549,287 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2005 Plan. No additional shares are available for issuance under the 2005 Plan. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors. Effective August 2014, we adopted our 2014 Equity Incentive Plan (2014 Plan) that authorizes us to grant options, restricted stock, and other equity-based awards, subject to adjustment in accordance with the 2014 Plan. As of December 31, 2015, 1,249,939 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2014 Plan , and 4,371 shares of common stock were available for future issuance. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors . In accordance with the 2014 Plan, on January 1, 2016, 775,634 shares of common stock became available for future grant under the plan. There were 1,799,226 stock options outstanding as of December 31, 2015 at a weighted average exercise price of $ 7.74 per share. Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands): Year Ended December 31, 2015 2014 Research and development $ $ General and administrative Total stock-based compensation expense $ $ Stock Options Options issued under both the 2005 Plan and 2014 Plan may have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than four years . A summary of activity for the years ended December 31, 2015 and 2014 is presented below (in thousands, except share and per share amounts): Weighted‑ Average Aggregate Exercise Price Intrinsic Shares Per Share Value Outstanding—December 31, 2013 $ Granted Exercised Outstanding—December 31, 2014 Granted Exercised Forfeited Expired Outstanding—December 31, 2015 $ $ Exercisable—December 31, 2015 $ $ Exercisable and expected to vest—December 31, 2015 $ $ The weighted average remaining contractual term of options outstanding and exercisable as of December 31, 2015 is 8.5 and 7.7 years, respectively. The aggregate intrinsic values in the preceding table represent the total intrinsic value that would have been received had all option holders exercised their options on December 31, 2015. Intrinsic value is determined by calculating the difference between the fair value of our common stock on the last day of the year and the exercise price, multiplied by the number of options. The weighted ‑average grant date fair value of options granted was $8.15 and $6.09 per share in 2015 and 2014, respectively, and was estimated at the date of grant using the Black ‑Scholes option ‑pricing model with the following weighted ‑average assumptions: 2015 2014 Expected stock price volatility - % - % Expected term of options - years - years Risk‑free interest rate - % - % Expected annual dividend yield % % The weighted ‑average valuation assumptions were determined as follows: · Expected stock price volatility: The expected volatility is based on historical volatilities of similar entities within our industry which were commensurate with our expected term assumption as described in the SEC’s Staff Accounting Bulletin, or SAB, No. 107. · Expected term of options: We estimated the expected term of our stock options with service ‑based vesting using the “simplified” method, as prescribed in SAB No. 107, whereby the expected life equals the average of the vesting tranches and the original contractual term of the option due to our lack of sufficient historical data. · Risk ‑free interest rate: We base the risk ‑free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. · Expected annual dividend yield: The estimated annual dividend yield is 0% because we have not historically paid, and do not expect for the foreseeable future to pay, a dividend on our common stock. As of December 31, 2015, there was $6.6 million of total unrecognized compensation expense related to unvested stock options granted under the 2005 Plan and 2014 Plan. That expense is expected to be recognized in the years ended as follows, in thousands: 2016 $ 2017 2018 2019 $ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 8 . Commitments and Contingencies Leases In October 2014, we entered into a five -year operating lease agreement for office space in Radnor, Pennsylvania. Rent payments under this lease commence May 1, 2015, with payment amounts escalating each May 1 thereafter through the end of the lease term. In December 2015, we entered into a First Amendment to this lease agreement (Amended Lease) to lease approximately 8,500 rentable square feet of office space in Radnor, Pennsylvania. This Lease amends our existing lease agreement to replace our existing premises of approximately 4,000 rentable square feet of office space, and we are expected to commence leasing the larger office space in April 2016. Rent payments under the Amended Lease are expected to commence June 1, 201 6 , with payment amounts escalating each June 1 thereafter through the end of the 62 -month lease term . In November 201 5 , we entered into a one - year operating lease agreement f o r office space in Madison , Connecticut , with two annual renewal options of one year each. Rent payments under this lease commenced on November 1, 2015, and increase with each renewal period . Prior to that and through October 2015 , we leased a facility in New Haven , Connecticut. Rent expense under these operati ng leases, in thousands, was $143 an d $50 for the years ended 2015 and 2014, respectively . All leases are non-cancelable. Our annual future minimum lease payments under these leases are as follows (in thousands): Operating Lease Payments 2016 $ 2017 2018 2019 2020 Thereafter Total minimum lease payments $ Contractual Obligations In June 2015, we entered into a contract with a third party for up to $3.8 million in clinical manufacturing supplies to support our ongoing clinical trials for ganaxolone. Delivery is expected to begin in the first quarter of 2016 and complete by the end of the year. In July 2015, we paid $1.0 million of this commitment, which is recorded in prepaid expenses and other current assets as of December 31, 2015. The balance of $2.8 million is due in 2016. Employee Benefit Plan We maintain a Section 401(k) retirement plan for all employees. Employees can contribute up to 50% of their eligible pay, subject to maximum amounts allowed under law. We may make discretionary profit sharing contributions, which vest over a period of four years from each employee ’ s commencement of employment with us. We have not made any discretionary contributions. License Agreement We are obligated to pay royalties pursuant to a license agreement with Purdue as a percentage of net product sales for direct licensed products, such as ganaxolone. The obligation to pay royalties expires, on a country ‑by ‑country basis, 10 years from the first commercial sale of a licensed product in each country. The agreement also requires that we pay Purdue a percentage of the non ‑royalty consideration that we receive from a sublicensee and a percentage of milestone payments for indications other than seizure disorders and vascular migraine headaches not associated with mood disorders. Under the license agreement, we are committed to use commercially reasonable efforts to develop and commercialize at least one licensed product. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 9. Income Taxes As of December 31, 201 5 and 201 4 , we had approximately $93.2 million and $68.0 million, respectively, of net operating loss ( NOL ) , carry forwards available to offset future federal and state taxable income that will expire beginning in 202 3 . We also have federal research and development credit carryovers of approximately $3.7 million and state credit carryovers of approximately $0.4 million which expire beginning in 2019. The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL, and tax credit carry forwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three ‑ year period in excess of 50% , as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, as well as similar state tax provisions. This could limit the amount of NOLs that we can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of our company immediately prior to an ownership change. Subsequent ownership changes may further affect the limitation in future years. Additionally, U.S. tax laws limit the time during which these carry forwards may be applied against future taxes, therefore, we may not be able to take full advantage of these carry forwards for federal income tax purposes. We are currently evaluating the ownership history of our company to determine if there were any ownership changes as defined under Section 382(g) of the Code and the effects any ownership change may have had. The components of the net deferred tax asset are as follows (in thousands): December 31, 2015 2014 Gross deferred tax assets: Net operating loss carryforwards $ $ Accrued expenses — Contributions Deferred expenses — Stock‑based compensation Research and development and other credits Total gross deferred tax assets Gross deferred tax liabilities: Depreciation Total gross deferred tax liabilities Net deferred tax assets Less: valuation allowance Net deferred tax assets after valuation allowance $ — $ — In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of December 31, 2015 . The valuation allowance increased by $12. 3 million and $3.9 million during the years ended December 31, 201 5 and 201 4 , respectively, due primarily to the generation of NOLs during those periods. We did not have unrecognized tax benefits as of December 31, 201 5 and 201 4 , and do not expect this to change significantly over the next twelve months. We recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. Accrued interest and penalties, where appropriate, are recorded in income tax expense. We did not have uncertain tax positions as of December 31, 2015 and 2014 . As of December 31, 201 5 and 201 4 , we have not accrued interest or penalties related to any uncertain tax positions. Our tax returns filed since inception are still subject to examination by major tax jurisdictions. A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: Year Ended December 31, 2015 2014 Federal income tax expense at statutory rate % % Permanent items State income tax, net of federal benefit R&D tax credits Other — Change in valuation allowance Effective income tax rate % % For all years through December 31, 201 5 , we generated research credits but have not conducted a study to document the qualified activities. This study may result in an adjustment to our research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position for these years. A full valuation allowance has been provided against our research and development credits and, if an adjustment is required, this adjustment to the deferred tax asset established for the research and development credit carryforwards would be offset by an adjustment to the valuation allowance. We file income tax returns in the United States, the State of Connecticut, and the Commonwealth of Pennsylvania. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 201 2 through December 31, 201 4 . To the extent we have tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. |
Quarterly Financial Information
Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information (unaudited) | |
Quarterly Financial Information (unaudited) | 10. Quarterly Financial Information (unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year 2015 Research and development expenses $ $ $ $ $ General and administrative expenses $ $ $ $ $ Net loss and net loss applicable to common stockholders $ $ $ $ $ Net loss per share, basic and diluted $ $ $ $ $ 2014 Research and development expenses $ $ $ $ $ General and administrative expenses $ $ $ $ $ Net loss $ $ $ $ $ Cumulative preferred stock dividends $ $ $ $ - $ Net loss applicable to common stockholders $ $ $ $ $ Net loss per share, basic and diluted $ $ $ $ $ |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. |
Fair Value of Financial Instruments and Credit Risk | Fair Value of Financial Instruments and Credit Risk At December 31, 2015 and 2014, our financial instruments included cash equivalents, certificates of deposit, accounts payable, accrued expenses, and notes payable. The carrying amount of cash equivalents, certificates of deposit, accounts payable and accrued expenses approximated fair value, given their short-term nature. The carrying amount of our notes payable approximate fair value because the interest rates on these instruments are reflective of rates that we could obtain on debt with similar terms and conditions. Cash equivalents and certificates of deposit subject us to concentrations of credit risk. However, we invest our cash in accordance with a policy objective that seeks to ensure both liquidity and safety of principal. The policy limits investments to instruments issued by the U.S. government, certain SEC-registered money market funds that invest only in U.S. government obligations and various other low-risk liquid investment options, and places restrictions on portfolio maturity terms. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. As of December 31, 2015 and 2014, we invested a portion of our cash balances in money market investments, which we have included as cash equivalents on our balance sheets. |
Investments | Investments Investments purchased with a maturity of more than three months and less than twelve months are classified as short-term investments. Investments purchased with a remaining maturity greater than twelve months are classified as long-term investments. We plan to hold these investments to maturity and have classified these investments as such as defined by GAAP. |
Prepaid expenses and other current assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets generally represent payments made for goods or services to be received within one year, and are expensed as the related benefit is received. As of December 31, 2015, this balance included a deposit of $1.0 million for clinical manufacturing supplies to be used in connection with our clinical trials. |
Property and Equipment | Property and Equipment Property and equipment consist of laboratory and office equipment and are recorded at cost. Property and equipment are depreciated on a straight ‑line basis over their estimated useful lives. We estimate a life of three years for computer equipment, including software, and five years for laboratory equipment, office equipment, and furniture. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operating expenses. |
Impairment of Long-Lived Assets | Impairment of Long ‑Lived Assets We review long ‑lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount an impairment loss would be recognized if the carrying value of the asset exceeded its fair value. Fair value is generally determined using discounted cash flows. Through December 31, 2015, no impairment has occurred. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. |
Income Taxes | Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. At December 31, 2015 and 2014, we have concluded that a full valuation allowance is necessary for our net deferred tax assets. We had no material amounts recorded for uncertain tax positions, interest or penalties in the accompanying financial statements. |
Loss Per Share of Common Stock | Loss Per Share of Common Stock Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, warrants, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation. These potentially dilutive securities are more fully described in Note 7. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2015 and 2014 (in thousands, except share and per share amounts): Year Ended December 31, 2015 2014 Basic and diluted net loss per share of common stock: Net loss $ $ Dividends on Series B and C Preferred Stock — Net loss applicable to common stockholders $ $ Weighted average shares of common stock outstanding Net loss per share of common stock—basic and diluted $ $ Our outstanding stock options, which were 1,799,226 and 1,670,574 as of December 31, 2015 and 2014, respectively, have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive. As of December 31, 2015 and 2014, we had no other potentially dilutive securities. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non ‑owner sources. Comprehensive loss was equal to net loss for all periods presented. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision ‑making group, in deciding how to allocate resources and in assessing performance. We view our operations and manage our business in one segment, which is the identification and development of neuropsychiatric therapeutics. |
Stock-Based Compensation | Stock ‑Based Compensation We account for stock ‑based compensation in accordance with the provisions of Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation, or ASC 718, which requires the recognition of expense related to the fair value of stock ‑based awards in the statements of operations. For stock options issued to employees and members of our board of directors for their services on our board of directors, we estimate the grant ‑date fair value of options using the Black ‑Scholes option pricing model. The use of the Black ‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk ‑free interest rates, and , for grants prior to our initial public offering, the value of the common stock. For awards subject to time ‑based vesting, we recognize stock ‑based compensation expense, net of estimated forfeitures, on a straight ‑line basis over the requisite service period, which is generally the vesting term of the award. For awards subject to performance ‑based vesting conditions, we recognize stock ‑based compensation expense when it is probable that the performance condition will be achieved. Stock ‑based awards issued to non ‑employees are recorded at their fair values, and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and ASC Topic 505, Equity. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals As part of the process of preparing our financial statements, we are required to estimate our expenses resulting from our obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. Our objective is to reflect the appropriate trial expenses in our financial statements by matching those expenses with the period in which services are performed and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates based on estimates of services received and efforts expended that take into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from its estimates. We make estimates of our accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. Our clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third ‑party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. For the years ended December 31, 2015 and 2014, there were no material adjustments to our prior period estimates of accrued expenses for clinical trials. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board ( FASB) issued Accounting Standards Update ( ASU) No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern , which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not expect the adoption of this ASU to have a material effect on our interim or annual financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , which changes the presentation of debt issuance costs in financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The guidance in the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is allowed for all entities for financial statements that have not been previously issued. Entities would apply the new guidance retrospectively to all prior periods (i.e., the balance sheet for each period is adjusted). We do not expect the adoption of this ASU to have a material effect on our interim or annual financial statements . In February 2016, the FASB issued ASU 2016-02, Leases , which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We have not evaluated the impact of the updated guidance on our financial statements. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2015 and 2014 (in thousands, except share and per share amounts): Year Ended December 31, 2015 2014 Basic and diluted net loss per share of common stock: Net loss $ $ Dividends on Series B and C Preferred Stock — Net loss applicable to common stockholders $ $ Weighted average shares of common stock outstanding Net loss per share of common stock—basic and diluted $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Summary of major category of financial assets and financial liabilities measured at fair value on a recurring basis | The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands): Level 1 Level 2 Level 3 Total December 31, 2015 Assets Money market funds (cash equivalents) $ $ — $ — $ Certificates of deposit — — December 31, 2014 Assets Money market funds (cash equivalents) $ $ — $ — $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands) : December 31, 2015 2014 Laboratory equipment $ $ Office equipment Less: accumulated depreciation $ $ |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | |
Schedule of accrued expenses | At December 31, 2015 and 2014 , accrued expenses consisted of the following (in thousands) : December 31, 2015 2014 Payroll and related costs Clinical trials and drug development Professional fees Other Total accrued expenses $ $ |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable | |
Schedule of Loan and Security Agreement | The Amended LSA increased the total term loan availability from $2.0 million to $12.0 million, available in four tranches (in thousands ): Term Loan Term Loan Tranche Available Borrowed Borrowed Date A $ $ April 2014 B December 2014 C — * D — * $ $ *As of December 31, 2015, we have the ability to borrow under Tranche D. Our ability to borrow under Tranche C is conditioned upon meeting certain clinical trial milestones, which must be met by March 31, 2016. The availability end date for Tranches C and D is March 31, 2016 . |
Schedule of maturities of debt obligations over the next five years | Maturities of our debt obligations over the next five years are as follows (in thousands): Debt Maturities 2016 $ 2017 2018 Total maturities $ |
Stock Option and Incentive Pl24
Stock Option and Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock Option and Incentive Plans | |
Schedule of total compensation cost recognized for all stock option awards in the statements of operations | Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands): Year Ended December 31, 2015 2014 Research and development $ $ General and administrative Total stock-based compensation expense $ $ |
Summary of activity for all option | A summary of activity for the years ended December 31, 2015 and 2014 is presented below (in thousands, except share and per share amounts): Weighted‑ Average Aggregate Exercise Price Intrinsic Shares Per Share Value Outstanding—December 31, 2013 $ Granted Exercised Outstanding—December 31, 2014 Granted Exercised Forfeited Expired Outstanding—December 31, 2015 $ $ Exercisable—December 31, 2015 $ $ Exercisable and expected to vest—December 31, 2015 $ $ |
Schedule of weighted-average assumptions estimated at the date of grant using the Black-Scholes option pricing model for weighted-average grant date fair value of the options granted to employees | 2015 2014 Expected stock price volatility - % - % Expected term of options - years - years Risk‑free interest rate - % - % Expected annual dividend yield % % |
Schedule of unrecognized compensation expense expected to be recognized in future years | That expense is expected to be recognized in the years ended as follows, in thousands: 2016 $ 2017 2018 2019 $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies. | |
Schedule of future minimum operating lease payments | Our annual future minimum lease payments under these leases are as follows (in thousands): Operating Lease Payments 2016 $ 2017 2018 2019 2020 Thereafter Total minimum lease payments $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of components of the net deferred tax asset | The components of the net deferred tax asset are as follows (in thousands): December 31, 2015 2014 Gross deferred tax assets: Net operating loss carryforwards $ $ Accrued expenses — Contributions Deferred expenses — Stock‑based compensation Research and development and other credits Total gross deferred tax assets Gross deferred tax liabilities: Depreciation Total gross deferred tax liabilities Net deferred tax assets Less: valuation allowance Net deferred tax assets after valuation allowance $ — $ — |
Schedule of reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes | Year Ended December 31, 2015 2014 Federal income tax expense at statutory rate % % Permanent items State income tax, net of federal benefit R&D tax credits Other — Change in valuation allowance Effective income tax rate % % |
Quarterly Financial Informati27
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information (unaudited) | |
Schedule of Quarterly financial information | First Quarter Second Quarter Third Quarter Fourth Quarter Total Year 2015 Research and development expenses $ $ $ $ $ General and administrative expenses $ $ $ $ $ Net loss and net loss applicable to common stockholders $ $ $ $ $ Net loss per share, basic and diluted $ $ $ $ $ 2014 Research and development expenses $ $ $ $ $ General and administrative expenses $ $ $ $ $ Net loss $ $ $ $ $ Cumulative preferred stock dividends $ $ $ $ - $ Net loss applicable to common stockholders $ $ $ $ $ Net loss per share, basic and diluted $ $ $ $ $ |
Organization and Description 28
Organization and Description of the Business (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)itemshares | Dec. 31, 2014USD ($)shares | |
Liquidity | ||
Revenues | $ 0 | |
Number of dose forms for modulator | item | 3 | |
Accumulated deficit | $ (97,186,000) | $ (72,336,000) |
Aggregate net proceeds from initial public offering | $ 28,278,000 | $ 41,202,000 |
Common Stock | ||
Liquidity | ||
Stock Issued During Period, Shares, New Issues | shares | 5,056,003 | 5,758,000 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Estimates and Recapitalization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Impairment of Long-Lived Assets | ||
Impairment loss | $ 0 | |
Income Taxes | ||
Liability for uncertain tax positions | $ 0 | $ 0 |
Computers and software | ||
Property and Equipment | ||
Useful life | 3 years | |
Laboratory equipment office equipment and furniture | ||
Property and Equipment | ||
Useful life | 5 years | |
Prepaid Expenses and Other Current Assets | ||
Prepaid expenses and other current assets | ||
Balance of deposit for supplies | $ 1,000 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic and diluted net loss per share of common stock: | ||||||||||
Net loss | $ (3,607) | $ (1,668) | $ (3,323) | $ (2,235) | $ (24,850) | $ (10,833) | ||||
Dividends on Series B and C Preferred Stock | (372) | (1,102) | (1,071) | (2,545) | ||||||
Net loss applicable to common stockholders | $ (7,607) | $ (4,963) | $ (5,273) | $ (7,007) | $ (3,607) | $ (2,040) | $ (4,425) | $ (3,306) | $ (24,850) | $ (13,378) |
Weighted average shares of common stock outstanding (in shares) | 14,919,783 | 6,152,669 | ||||||||
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (0.45) | $ (0.35) | $ (0.37) | $ (0.50) | $ (0.26) | $ (0.22) | $ (7.98) | $ (7.09) | $ (1.67) | $ (2.17) |
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 0 | 0 | ||||||||
Stock options | ||||||||||
Basic and diluted net loss per share of common stock: | ||||||||||
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 1,799,226 | 1,670,574 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2015item | |
Segment Information | |
Number of operating segment | 1 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Money market funds | ||
Assets | ||
Cash and cash equivalents, fair value | $ 50,682 | $ 48,960 |
Certificates of deposit | ||
Assets | ||
Cash and cash equivalents, fair value | 5,962 | |
Level 1 | Money market funds | ||
Assets | ||
Cash and cash equivalents, fair value | 50,682 | $ 48,960 |
Level 1 | Certificates of deposit | ||
Assets | ||
Cash and cash equivalents, fair value | $ 5,962 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment | ||
Property and equipment, gross | $ 380 | $ 400 |
Less: accumulated depreciation | (349) | (356) |
Property and equipment | 31 | 44 |
Depreciation expense | 11 | 5 |
Laboratory equipment | ||
Property and equipment | ||
Property and equipment, gross | 311 | 326 |
Office equipment | ||
Property and equipment | ||
Property and equipment, gross | $ 69 | $ 74 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Expenses | ||
Payroll and related costs | $ 631 | $ 419 |
Clinical trials and drug development | 1,188 | 777 |
Professional fees | 190 | 186 |
Other | 152 | 121 |
Total accrued expenses | $ 2,161 | $ 1,503 |
Notes Payable (Details)
Notes Payable (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2014USD ($) | Apr. 30, 2014USD ($) | Dec. 31, 2015USD ($)tranche | Dec. 31, 2014USD ($) | Aug. 31, 2015USD ($) | |
Notes Payable | |||||
Proceeds from the issuance of debt | $ 6,975 | ||||
Current portion of notes payable | $ 2,128 | ||||
Interest Expense | 475 | 117 | |||
2,016 | 2,128 | ||||
2,017 | 3,500 | ||||
2,018 | 1,750 | ||||
Total maturities | $ 7,378 | ||||
Credit facility | |||||
Notes Payable | |||||
Proceeds from the issuance of debt | $ 2,000 | ||||
Accrued interest rate (as a percent) | 5.50% | ||||
Number of tranches | tranche | 4 | ||||
Available | $ 12,000 | ||||
Borrowed | $ 7,000 | ||||
Extension period | 3 months | ||||
Current portion of notes payable | $ 1,800 | ||||
Interest Expense | 461 | $ 117 | |||
Accrued interest | $ 39 | ||||
Credit facility | Prime rate | |||||
Notes Payable | |||||
Variable interest rate | prime | ||||
Variable rate basis (as a percent) | 2.25% | ||||
Term Loan Tranche A | |||||
Notes Payable | |||||
Available | $ 2,000 | ||||
Borrowed | $ 2,000 | ||||
Term Loan Tranche B | |||||
Notes Payable | |||||
Accrued interest rate (as a percent) | 6.50% | ||||
Available | $ 5,000 | ||||
Borrowed | $ 5,000 | ||||
Proceeds from line of credit | $ 5,000 | ||||
Monthly payments (as a percent) | 4.166% | ||||
Term Loan Tranche B | Prime rate | |||||
Notes Payable | |||||
Variable interest rate | prime | ||||
Variable rate basis (as a percent) | 3.25% | ||||
Term Loan Tranche C | |||||
Notes Payable | |||||
Available | $ 2,500 | ||||
Term Loan Tranche D | |||||
Notes Payable | |||||
Available | 2,500 | ||||
Vendor Debt | |||||
Notes Payable | |||||
Balance of outstanding loan | $ 378 | $ 584 |
Stock Option and Incentive Pl36
Stock Option and Incentive Plans - Incentive Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2016 | Dec. 31, 2013 | |
Stock option | ||||
Stock option and incentive plans | ||||
Stock options outstanding | 1,799,226 | 1,670,574 | 1,093,208 | |
Total stock-based compensation expense | $ 2,108 | $ 698 | ||
Stock option | Research and development | ||||
Stock option and incentive plans | ||||
Total stock-based compensation expense | 685 | 137 | ||
Stock option | General and administrative | ||||
Stock option and incentive plans | ||||
Total stock-based compensation expense | $ 1,423 | $ 561 | ||
2005 Plan | ||||
Stock option and incentive plans | ||||
Common stock reserved for issuance (in shares) | 0 | |||
Stock options outstanding | 549,287 | |||
2014 Plan | ||||
Stock option and incentive plans | ||||
Common stock reserved for issuance (in shares) | 4,371 | 775,634 | ||
Stock options outstanding | 1,249,939 |
Stock Option and Incentive Pl37
Stock Option and Incentive Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock option | ||
Stock option and incentive plans | ||
Contractual life | 7 years 8 months 12 days | |
Shares | ||
Outstanding at the beginning of the period (in shares) | 1,670,574 | 1,093,208 |
Granted (in shares) | 585,800 | 700,000 |
Exercised (in shares) | (327,098) | (122,634) |
Forfeited (in shares) | (44,950) | |
Expired (in shares) | (85,100) | |
Outstanding at the end of the period (in shares) | 1,799,226 | 1,670,574 |
Exercisable at the end of the period (in shares) | 785,174 | |
Exercisable and expected to vest at the end of the year (in shares) | 1,799,226 | |
Weighted-Average Exercise Price Per Share | ||
Outstanding at the beginning of the period (in dollars per share) | $ 4.37 | $ 1.04 |
Granted (in dollars per share) | 12.56 | 8.99 |
Exercised (in dollars per share) | 1.14 | 1.04 |
Forfeited (in dollars per share) | 6.13 | |
Expired (in dollars per share) | 1.04 | |
Outstanding at the end of the period (in dollars per share) | 7.74 | 4.37 |
Exercisable at the end of the period (in dollars per share) | 5.05 | |
Exercisable and expected to vest at the end of the year (in dollars per share) | $ 7.74 | |
Aggregate Intrinsic Value | ||
Outstanding at the end of the period | $ 3,786 | |
Exercisable at the end of the period | 2,834 | |
Exercisable and expected to vest at the end of the year | $ 3,786 | |
Additional Disclosures | ||
Weighted average remaining contractual term | 8 years 6 months | |
Weighted average remaining contractual term exercisable | 7 years 8 months 12 days | |
Weighted average grant date fair value (in dollars per share) | $ 8.15 | $ 6.09 |
Weighted-average assumptions | ||
Expected annual dividend yield (as a percent) | 0.00% | 0.00% |
Unrecognized compensation expense | ||
Unrecognized compensation expense | $ 6,558 | |
Stock option | Recognition Period One | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | 2,863 | |
Stock option | Recognition Period Two | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | 2,256 | |
Stock option | Recognition Period Three | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | 1,293 | |
Stock option | Recognition Period Four | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | $ 146 | |
Stock option | Minimum | ||
Weighted-average assumptions | ||
Expected stock price volatility (as a percent) | 73.64% | 77.66% |
Expected term of options | 5 years 2 months 12 days | 5 years 6 months |
Risk-free interest rate (as a percent) | 1.44% | 1.75% |
Stock option | Maximum | ||
Weighted-average assumptions | ||
Expected stock price volatility (as a percent) | 81.21% | 86.08% |
Expected term of options | 6 years 1 month 6 days | 6 years 22 days |
Risk-free interest rate (as a percent) | 1.92% | 1.98% |
2005 Plan | ||
Shares | ||
Outstanding at the end of the period (in shares) | 549,287 | |
2005 Plan | Stock option | Maximum | ||
Stock option and incentive plans | ||
Contractual life | 10 years | |
Vesting period | 4 years | |
Additional Disclosures | ||
Weighted average remaining contractual term exercisable | 10 years | |
2014 Plan | ||
Shares | ||
Outstanding at the end of the period (in shares) | 1,249,939 | |
2014 Plan | Stock option | Maximum | ||
Stock option and incentive plans | ||
Contractual life | 10 years | |
Vesting period | 4 years | |
Additional Disclosures | ||
Weighted average remaining contractual term exercisable | 10 years |
Commitments and Contingencies38
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2015item | Oct. 31, 2014 | Dec. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) | Jun. 30, 2015USD ($) | |
Leases | |||||
Operating lease agreement term | 1 year | 5 years | |||
Rental square feet office space | ft² | 4,000 | ||||
Number of operating lease annual renewal options | item | 2 | ||||
Rent expense under operating lease | $ 143 | $ 50 | |||
Annual future minimum lease payments | |||||
2,016 | 232 | ||||
2,017 | 311 | ||||
2,018 | 318 | ||||
2,019 | 324 | ||||
2,020 | 330 | ||||
Thereafter | 139 | ||||
Operating Leases, Future Minimum Payments Due, Total | 1,654 | ||||
Contractual Obligations | |||||
Remaining balance of purchase commitment | $ 2,800 | $ 3,800 | |||
Employee Benefit Plan | |||||
Maximum employees contribution (as a percent) | 50.00% | ||||
Vesting period | 4 years | ||||
Amended Lease | |||||
Leases | |||||
Operating lease agreement term | 62 months | ||||
Rental square feet office space | ft² | 8,500 | ||||
License Agreement | Purdue Neuroscience Company | |||||
License Agreement [Abstract] | |||||
Expiration period of obligation to pay royalties | 10 years | ||||
Prepaid Expenses and Other Current Assets | |||||
Contractual Obligations | |||||
Balance of deposit for supplies | $ 1,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income taxes | ||
Net operating loss, or NOL, carry forwards available to offset future federal and state taxable income that will expire beginning in 2023 | $ 93,200,000 | $ 68,000,000 |
Gross deferred tax assets: | ||
Net operating loss carryforwards | 37,051,000 | 26,505,000 |
Accrued expenses | 29,000 | |
Contributions | 6,000 | 5,000 |
Deferred expenses | 23,000 | |
Stock-based compensation | 826,000 | 211,000 |
Research and development and other credits | 4,123,000 | 3,075,000 |
Total gross deferred tax assets | 42,058,000 | 29,796,000 |
Gross deferred tax liabilities: | ||
Depreciation | (2,000) | (1,000) |
Total gross deferred tax liabilities | (2,000) | (1,000) |
Net deferred tax assets | 42,056,000 | 29,795,000 |
Less: valuation allowance | (42,056,000) | (29,795,000) |
Increase in valuation allowance | 12,300,000 | 3,900,000 |
Unrecognized tax benefit | 0 | 0 |
Liability for uncertain tax positions | 0 | 0 |
Interest and penalties accrued related to unrecognized tax benefits | $ 0 | $ 0 |
Reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes | ||
Federal income tax expense at statutory rate (as a percent) | 34.00% | 34.00% |
Permanent items (as a percent) | (1.00%) | (5.40%) |
State income tax, net of federal benefit (as a percent) | 7.10% | 3.80% |
R&D tax credits (as a percent) | 4.20% | 4.20% |
Other (as a percent) | 5.00% | |
Change in valuation allowance (as a percent) | (49.30%) | (36.60%) |
Effective income tax rate (as a percent) | 0.00% | 0.00% |
Research tax credit carryforward | Federal | ||
Income taxes | ||
Tax credit carryovers | $ 3,700,000 | |
Research tax credit carryforward | State | ||
Income taxes | ||
Tax credit carryovers | $ 400,000 |
Quarterly Financial Informati40
Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information (unaudited) | ||||||||||
Research and development expenses | $ 6,061 | $ 3,472 | $ 3,915 | $ 5,468 | $ 2,167 | $ 1,569 | $ 2,805 | $ 2,149 | $ 18,916 | $ 8,690 |
General and administrative expenses | 1,436 | 1,378 | 1,255 | 1,447 | 1,387 | 868 | 458 | 517 | 5,516 | 3,230 |
Net loss | (3,607) | (1,668) | (3,323) | (2,235) | (24,850) | (10,833) | ||||
Cumulative preferred stock dividends | (372) | (1,102) | (1,071) | (2,545) | ||||||
Net loss applicable to common stockholders | $ (7,607) | $ (4,963) | $ (5,273) | $ (7,007) | $ (3,607) | $ (2,040) | $ (4,425) | $ (3,306) | $ (24,850) | $ (13,378) |
Net loss per share, basic and diluted | $ (0.45) | $ (0.35) | $ (0.37) | $ (0.50) | $ (0.26) | $ (0.22) | $ (7.98) | $ (7.09) | $ (1.67) | $ (2.17) |