Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 11, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MARINUS PHARMACEUTICALS INC | ||
Entity Central Index Key | 0001267813 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
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 | Accelerated Filer | ||
Entity Public Float | $ 265,327,966 | ||
Entity Common Stock, Shares Outstanding | 52,519,013 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 67,727 | $ 33,531 |
Short-term investments | 4,998 | 19,861 |
Prepaid expenses and other current assets | 1,215 | 978 |
Total current assets | 73,940 | 54,370 |
Property and equipment, net | 1,294 | 1,338 |
Investments | 4,964 | |
Total assets | 75,234 | 60,672 |
Current liabilities: | ||
Accounts payable | 2,472 | 927 |
Accrued expenses | 4,437 | 1,617 |
Total current liabilities | 6,909 | 2,544 |
Other long-term liabilities | 120 | |
Total liabilities | 6,909 | 2,664 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 25,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.001 par value; 100,000,000 shares authorized, 52,548,244 issued and 52,519,013 outstanding at December 31, 2018 and 40,549,936 issued and 40,520,705 outstanding at December 31, 2017 | 53 | 41 |
Additional paid-in capital | 249,727 | 202,790 |
Treasury stock at cost, 29,231 shares at December 31, 2018 and December 31, 2017 | ||
Accumulated other comprehensive loss | (2) | (96) |
Accumulated deficit | (181,453) | (144,727) |
Total stockholders’ equity | 68,325 | 58,008 |
Total liabilities and stockholders’ equity | $ 75,234 | $ 60,672 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED 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 issued | 0 | 0 |
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 | 52,548,244 | 40,549,936 |
Common stock, shares outstanding | 52,519,013 | 40,520,705 |
Treasury stock, shares | 29,231 | 29,231 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Expenses: | |||
Research and development | $ 28,394 | $ 12,376 | $ 22,005 |
General and administrative | 8,785 | 6,667 | 6,237 |
Loss from operations | (37,179) | (19,043) | (28,242) |
Interest income | 454 | 324 | 128 |
Interest expense | (159) | (464) | |
Other expense | (1) | (20) | (65) |
Net loss | $ (36,726) | $ (18,898) | $ (28,643) |
Per share information: | |||
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (0.90) | $ (0.80) | $ (1.47) |
Basic and diluted weighted average shares outstanding (in shares) | 40,895,406 | 23,540,748 | 19,498,143 |
Net loss | $ (36,726) | $ (18,898) | $ (28,643) |
Other comprehensive loss: | |||
Unrealized gain (loss) on available-for-sale securities | 94 | (96) | |
Total comprehensive loss | $ (36,632) | $ (18,994) | $ (28,643) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2015 | $ 19 | $ 144,088 | $ (97,186) | $ 46,921 | ||
Balance (in shares) at Dec. 31, 2015 | 19,420,086 | 29,231 | ||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||
Stock-based compensation expense | 3,077 | 3,077 | ||||
Exercise of stock options | $ 1 | 123 | 124 | |||
Exercise of stock options (in shares) | 118,365 | |||||
Issuance (forfeiture) of restricted stock (in shares) | 195,900 | |||||
Net loss | (28,643) | (28,643) | ||||
Balance at Dec. 31, 2016 | $ 20 | 147,288 | (125,829) | 21,479 | ||
Balance (in shares) at Dec. 31, 2016 | 19,734,351 | 29,231 | ||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||
Stock-based compensation expense | 2,880 | 2,880 | ||||
Issuance of common stock under equity distribution agreement, net of expenses of $380 | $ 10 | 14,843 | 14,853 | |||
Issuance of common stock under equity distribution agreement (in shares) | 9,768,142 | |||||
Issuance of common stock in connection with secondary public offering ($3.75 per share for the years ended 2018 and 2017, respectively), net of expenses of $2,853 and $2,555 for the years ended 2018 and 2017, respectively | $ 10 | 37,684 | 37,694 | |||
Issuance of common stock in connection with secondary public offering (in shares) | 10,733,334 | |||||
Exercise of stock options | $ 1 | 95 | 96 | |||
Exercise of stock options (in shares) | 90,509 | |||||
Issuance (forfeiture) of restricted stock (in shares) | 223,600 | |||||
Net loss | (18,898) | (18,898) | ||||
Unrealized loss on investments | $ (96) | (96) | ||||
Balance at Dec. 31, 2017 | $ 41 | 202,790 | (96) | (144,727) | 58,008 | |
Balance (in shares) at Dec. 31, 2017 | 40,549,936 | 29,231 | ||||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||||
Stock-based compensation expense | 4,788 | 4,788 | ||||
Issuance of common stock in connection with secondary public offering ($3.75 per share for the years ended 2018 and 2017, respectively), net of expenses of $2,853 and $2,555 for the years ended 2018 and 2017, respectively | $ 12 | 42,135 | 42,147 | |||
Issuance of common stock in connection with secondary public offering (in shares) | 12,000,000 | |||||
Exercise of stock options | 14 | 14 | ||||
Exercise of stock options (in shares) | 12,308 | |||||
Issuance (forfeiture) of restricted stock (in shares) | (14,000) | |||||
Net loss | (36,726) | (36,726) | ||||
Unrealized loss on investments | 94 | 94 | ||||
Balance at Dec. 31, 2018 | $ 53 | $ 249,727 | $ (2) | $ (181,453) | $ 68,325 | |
Balance (in shares) at Dec. 31, 2018 | 52,548,244 | 29,231 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||
Share Price (in dollars per share) | $ 3.75 | $ 3.75 |
Stock issuance costs | $ 2,853 | $ 2,555 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net loss | $ (36,726) | $ (18,898) | $ (28,643) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 127 | 126 | 23 |
Stock-based compensation expense | 4,788 | 2,880 | 3,077 |
Amortization of debt issuance costs | 4 | 7 | |
Amortization of discount on investments | (79) | (28) | |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other current assets | (237) | (779) | 1,396 |
Accounts payable and accrued expenses | 4,285 | (2,121) | (629) |
Net cash used in operating activities | (27,842) | (18,816) | (24,769) |
Cash flows from investing activities | |||
Purchases of investments | (24,892) | (2,434) | |
Maturities of short-term investments | 20,000 | 3,922 | 4,474 |
Purchases of property and equipment | (83) | (450) | (644) |
Net cash provided by (used in) investing activities | 19,917 | (21,420) | 1,396 |
Cash flows from financing activities | |||
Proceeds from exercise of stock options | 14 | 96 | 124 |
Principal payments of notes payable | (5,247) | (2,128) | |
Proceeds from equity offerings, net of offering costs | 42,300 | 52,547 | (167) |
Proceeds from short-term bank borrowings | 193 | ||
Repayments of short-term bank borrowings | (193) | ||
Net cash provided by (used in) financing activities | 42,121 | 47,589 | (2,171) |
Net increase (decrease) in cash and cash equivalents | 34,196 | 7,353 | (25,544) |
Cash and cash equivalents—beginning of year | 33,531 | 26,178 | 51,722 |
Cash and cash equivalents—end of year | 67,727 | 33,531 | 26,178 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | $ 184 | 460 | |
Accrued equity offering costs | $ 153 | ||
Property and equipment in accounts payable | $ 134 |
Organization and Description of
Organization and Description of the Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Description of the Business | |
Organization and Description of the Business | 1. Organization and Description of the Business We are a clinical stage pharmaceutical company focused on developing and commercializing innovative therapeutics to treat epilepsy and neuropsychiatric disorders. Our clinical stage product candidate, ganaxolone, is a positive allosteric modulator of the GABA A receptor being developed in three different dose forms (intravenous, oral capsule and oral liquid) intended to maximize therapeutic reach to adult and pediatric patient populations in acute and chronic care, in-patient and self-administered settings. The GABA A receptor is a well‑characterized target in the brain known for both anti‑seizure, anti-depression and anti‑anxiety effects. Our primary focus to date has been directed towards developing business strategies, conducting research and development activities, and conducting preclinical testing and human clinical studies for our product candidate. 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, 2018 was $181.5 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 2018, we issued a total of 12,000,000 shares of common stock resulting in aggregate net proceeds, after underwriting discounts and commissions and other estimated offering expenses, of $42.1 million. In connection with the closing of a secondary public offering during the third quarter of 2017, we issued a total of 10,733,334 shares of common stock resulting in aggregate net proceeds, after underwriting discounts and commissions and other estimated offering expenses, of $37.7 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated. 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, 2018 and 2017, our financial instruments included cash equivalents, U.S. Treasury securities, accounts payable and accrued expenses. 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 U.S. Treasury securities is recorded at amortized cost based on the current market price of each security at the measurement date. 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 U.S. Treasury securities 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 Securities and Exchange Commission (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, 2018 and 2017, we invested a portion of our cash balances in money market investments, which we have included as cash equivalents on our balance sheets. Investments As of December 31, 2018, our investments consisted of U.S. Treasury securities and are classified as available-for-sale and are recorded at amortized cost with unrealized gains and losses recorded in accumulated other comprehensive loss, as a separate component of stockholders’ equity. Interest income includes interest and dividends, realized gains and losses on sales of securities and other-than-temporary impairment (OTTI) declines in the fair value of securities, if any. U.S. Treasury securities with maturities less than 12 months are classified as short-term investments and maturities greater than 12 months are classified as long-term investments on our balance sheet. The Company reviews its available-for-sale securities for OTTI declines in fair value below its cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below its cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether the Company will more likely than not be required to sell, the security before recovery of its amortized cost basis. The Company’s assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. If a decline in the fair value of an available-for-sale security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value. If the Company intends to sell the security or it is more likely than not that the Company will be forced to sell the security before recovery of the amortized cost of the security, the loss is recognized in net income. Otherwise, the loss is separated into a portion representing a credit loss, which is recorded in net income, and the remainder is recorded in other comprehensive income, net of taxes. 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. 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, five years for office equipment and furniture, and five to fifteen years for laboratory equipment. 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. Research and Development Research and development costs are expensed as incurred. Costs for certain development activities, such as clinical studies, 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, 2018 and 2017, 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 8. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except share and per share amounts): Year Ended December 31, 2018 2017 2016 Basic and diluted net loss per share of common stock: Net loss $ (36,726) $ (18,898) $ (28,643) Weighted average shares of common stock outstanding 40,895,406 23,540,748 19,498,143 Net loss per share of common stock—basic and diluted $ (0.90) $ (0.80) $ (1.47) The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive: December 31, 2018 2017 Restricted stock 105,200 239,800 Stock options 4,951,409 3,754,320 5,056,609 3,994,120 As of December 31, 2018, 2017 and 2016, 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. As of December 31, 2018 and 2017, comprehensive loss includes net loss and unrealized gain or loss on available-for-sale securities. 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, non-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 restricted stock awards, the grant date fair value is determined by the closing market price of our common stock on the date of grant. For awards subject to time‑based vesting, we recognize stock‑based compensation expense, 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. Clinical Study Expenses 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 studies. 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 study 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 study as measured by patient progression and the timing of various aspects of the study. 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 studies. During the course of a clinical study, 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 study 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, 2018, 2017 and 2016 there were no material adjustments to our prior period estimates of accrued expenses for clinical studies. Recent Accounting Pronouncements In January 2016, the Financial Accounting Standard Board ( FASB) issued Accounting Standards Update ( ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 and early adoption is not permitted. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have a material impact on our interim consolidated financial statements. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for us on January 1, 2019, with early adoption permitted. 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. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on January 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 January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected 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 do not expect to elect the use-of- hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect that this standard will have a material effect on our financial statements. We currently believe the most significant effects relate to (1) the recognition of new right of use (ROU) assets and lease liabilities on our balance sheet for our real estate operating leases and (2) providing significant new disclosures about our leasing activities. We do not expect a significant change in our leasing activities. During the first fiscal quarter of adoption, we currently expect to recognize additional operating liabilities of approximately $3.4 million, with corresponding ROU assets of approximately $2.5 million, based on the present value of the remaining minimum rental payments and other adjustments required by Topic 842 for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. For those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , which amends the guidance in Accounting Standards Codification (ASC) 230 on the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The guidance in the ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017, with early adoption permitted. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which superseded ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-base payment arrangements. We early-adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements FASB 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. If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Valuation Techniques - Level 2 Inputs The Company estimates the fair values of its financial instruments categorized as level 2 in the fair value hierarchy, including U.S. Treasury securities, by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, benchmark yields, issuer credit spreads, benchmark securities, and other observable inputs. The Company obtains a single price for each financial instrument and does not adjust the prices obtained from the pricing service. The Company validates the prices provided by its third-party pricing services by reviewing their pricing methods, obtaining market values from other pricing sources and comparing them to the share prices presented by the third-party pricing services. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by its third-party pricing services as of December 31, 2018 or 2017. 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, 2018 Assets Money market funds (cash equivalents) $ 14,049 $ — $ — $ 14,049 U.S. Treasury securities — 4,998 — 4,998 Total assets $ 14,049 $ 4,998 $ — $ 19,047 December 31, 2017 Assets Money market funds (cash equivalents) $ 33,531 $ — $ — $ 33,531 U.S. Treasury securities — 24,825 — 24,825 Total assets $ 33,531 $ 24,825 $ — $ 58,356 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Laboratory equipment $ 1,756 $ 1,684 Office equipment 148 139 1,904 1,823 Less: accumulated depreciation (610) (484) $ 1,294 $ 1,338 Depreciation expense was $127 thousand, $126 thousand , and $23 thousand for the years ended December 31, 2018, 2017 and 2016, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2018 2017 Payroll and related costs $ 1,364 $ 1,323 Clinical studies and drug development 2,781 156 Professional fees 204 113 Other 88 25 Total accrued expenses $ 4,437 $ 1,617 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable | |
Notes Payable | 6. Notes Payable In 2014, we borrowed an aggregate of $7.0 million in connection with a Loan and Security Agreement, as amended (LSA). In July 2017, we paid in full the entire outstanding term loans balance of $3.5 million and accrued interest, with no penalty for prepayment. Interest expense related to the term loans was $0.2 million and $0.5 million for the years ended December 31, 2017 and 2016, respectively. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments | |
Investments | 7. Investments As of December 31, 2018 and 2017, our investments consisted of U.S. Treasury securities, maturing at various dates through January 2019. Investments are classified as short- or long-term investments on our consolidated balance sheets based on maturity. U.S. Treasury securities are classified as available-for-sale and are recorded at amortized cost. As of December 31, 2018, our one U.S. Treasury security was in an unrealized loss position. While this security has been in an unrealized loss position for more than 12 months, the security matured in January 2019 and we recovered the full amortized cost basis. Accordingly, we believe that there was no other-than-temporary impairment as of December 31, 2018. Total amortized cost and fair value each were $5.0 million as of December 31, 2018, with an unrealized loss of $1 thousand. Total amortized cost and fair value were $24.9 million and $24.8 million as of December 31, 2017, respectively, with a combined unrealized loss of $96 thousand. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity 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, 2018, 362,112 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, as amended (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, 2018, 4,278,297 options to purchase shares of common stock and 105,200 restricted shares of common stock were outstanding pursuant to grants in connection with the 2014 Plan, and 1,302,703 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, 2018, shares of common stock available for future grants under the 2014 plan was increased to 3,302,703. In addition, during the year ended December 31, 2018, we granted 311,000 options to purchase shares of common stock outside of our 2014 Plan as inducements material to new employees entering into employment agreements with us pursuant to NASDAQ Listing Rule 5635(c)(4). The amount, terms of grants, and exercisability provisions of these grants are determined and set by our board of directors, and are largely consistent with the terms and exercisability provisions of grants under our 2014 Plan. Stock Options Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Research and development $ 1,712 $ 724 $ 980 General and administrative 2,995 1,697 1,975 Total $ 4,707 $ 2,421 $ 2,955 Options issued under both the 2005 Plan and 2014 Plan and the inducement grants 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, 2018, 2017 and 2016 is presented below (in thousands, except share and per share amounts): Weighted‑ Average Aggregate Exercise Price Intrinsic Shares Per Share Value Outstanding—December 31, 2015 1,799,226 $ 7.74 Granted 603,975 2.42 Exercised (118,365) 1.04 Forfeited (45,792) 12.08 Outstanding—December 31, 2016 2,239,044 6.57 Granted 1,884,800 4.02 Exercised (98,402) 1.46 Forfeited (141,358) 7.09 Expired (129,764) 11.75 Outstanding—December 31, 2017 3,754,320 5.22 Granted 1,372,000 6.60 Exercised (12,308) 1.18 Forfeited (162,603) 5.00 Outstanding—December 31, 2018 4,951,409 $ 5.62 $ 2,429 Exercisable—December 31, 2018 2,894,726 $ 5.69 $ 1,836 Exercisable and expected to vest—December 31, 2018 4,951,409 $ 5.62 $ 2,429 Included in the 2017 exercised shares above are options that were net shares settled for an exercise price of $49 thousand (7,893 shares). The weighted average remaining contractual term of options outstanding and exercisable as of December 31, 2018 is 7.9 and 7.1 years, respectively. Intrinsic value in the table above was determined by calculating the difference between the market value of our common stock on the last trading day of 2018 of $2.87 per share and the exercise price, multiplied by the number of in-the-money options. The weighted‑average grant date fair value of options granted was $5.51, $2.67 and $1.60 per share in 2018, 2017 and 2016, respectively, and was estimated at the date of grant using the Black‑Scholes option‑pricing model with the following ranges of weighted‑average assumptions: 2018 2017 2016 Expected stock price volatility - % - % - % Expected term of options - years - years - years Risk‑free interest rate - % - % - % Expected annual dividend yield % % % The weighted‑average valuation assumptions were determined as follows: · Expected stock price volatility: As of December 31, 2018, the expected volatility is based on historical volatility of our stock price. As of December 31, 2017 and 2016, the expected volatility was 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, 2018, there was $8.1 million of total unrecognized compensation expense related to unvested stock options. That expense is expected to be recognized over the next four years as follows, in thousands: 2019 $ 3,413 2020 3,144 2021 1,161 2022 372 $ 8,090 Restricted Stock All issued and outstanding restricted shares of common stock are time-based and become vested one year after the grant date, pursuant to the 2014 Plan. Compensation expense is recorded ratably over the requisite service period. Compensation expense related to restricted stock is measured based on the fair value using the closing market price of the Company’s common stock on the date of the grant. No restricted shares of common stock were issued during fiscal year 2018. A summary of activity for the years ended December 31, 2018, 2017 and 2016 is presented below (in thousands, except share and per share amounts): Weighted‑average Grant Date Shares Fair Value per Share Outstanding—December 31, 2015 — $ — Granted 196,275 1.51 Forfeited (375) 1.50 Outstanding—December 31, 2016 195,900 1.51 Granted 245,200 1.26 Vested (179,700) 1.12 Forfeited (21,600) 0.17 Outstanding—December 31, 2017 239,800 1.21 Vested (120,600) 1.21 Forfeited (14,000) 1.21 Outstanding—December 31, 2018 105,200 $ 1.21 Expected to vest—December 31, 2018 105,200 $ 1.21 As of December 31, 2018, there was $0.1 million of total unrecognized compensation cost related to unvested restricted stock is expected to be recognized over a weighted average service period of 0.58 years. Total compensation cost recognized for all restricted stock awards in the statements of operations for the year ended December 31, 2018 is as follows (in thousands): Year Ended December 31, 2018 2017 Research and development $ 19 $ 125 General and administrative 62 334 Total $ 81 $ 459 Equity Distribution Agreement In August 2015, we entered into an Equity Distribution Agreement (2015 EDA) with JMP Securities LLC (JMP), under which JMP, as our exclusive agent, at our discretion and at such times that we may determine from time to time, may sell over a three-year period from the execution of the agreement up to a maximum of $35 million of shares of our common stock. We are not required to sell any shares at any time during the term of the EDA. This agreement expired in August 2018. In October 2017, we also entered into an Equity Distribution Agreement (2017 EDA) with JMP Securities LLC (JMP), under which JMP, as our exclusive agent, at our discretion and at such times that we may determine from time to time, may sell over a three-year period from the execution of the agreement up to a maximum of $50 million of shares of our common stock The 2017 EDA will terminate upon the earliest of: (1) the sale of all shares subject to the EDA, (2) October 31, 2020 or (3) the termination of the 2017 EDA in accordance with its terms. Either party may terminate the 2017 EDA at any time upon written notification to the other party in accordance with the 2017 EDA, and upon such notification, the offering will terminate. We agreed to pay JMP a commission of up to 3.0% of the gross sales price of any shares sold pursuant to either the 2017 EDA or 2015 EDA. With the exception of expenses related to the shares, JMP will be responsible for all of its own costs and expenses incurred in connection with the offering. We did not issue any shares pursuant to the 2017 EDA or 2015 EDA during the year ended December 31, 2018. During the year ended December 31, 2017, we issued 9,768,142 shares of our common stock pursuant to the 2015 EDA for aggregate net proceeds to us of $14.9 million. As of December 31, 2018, $50.0 million remained available under the 2017 EDA. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Leases In December 2015, we entered into a First Amendment to a previous lease agreement (Amended Lease) to lease approximately 8,500 rentable square feet of office space in Radnor, Pennsylvania. This amended an existing lease agreement to replace leased premises of approximately 4,000 rentable square feet of office space, and we commenced leasing the larger office space in April 2016. Rent payments under the Amended Lease commenced June 1, 2016, with payment amounts escalating each April 1 thereafter through the end of the 62-month lease term. In December 2018, we entered into a Second Amendment to this lease agreement (Second Amended Lease) to lease approximately 22,500 rentable square feet of office space in Radnor, Pennsylvania. This Second Amended Lease amends our existing Amended Lease agreement to replace our existing premises of approximately 8,500 rentable square feet of office space, and we are expected to commence leasing the larger office space in April 2019. Rent payments under the Amended Lease are expected to commence October 1, 2019, with payment amounts escalating each April 1 thereafter through the end of the 78-month lease term. In November 2018, we entered into a three-year operating lease agreement for approximately 1,000 square feet of office space in Madison, Connecticut, with no renewal options. Rent payments under this lease commenced on November 1, 2018, and increase each November 1. Prior to that and through October 2018, we leased this same office space under a lease agreement that expired in October 2018. Rent expense under these operating leases was $0.2 million, $0.3 million and $0.3 million for the years ended 2018, 2017 and 2016, respectively. All leases are non-cancelable. Our annual future minimum lease payments under these leases are as follows (in thousands): Operating Lease Payments 2019 $ 298 2020 807 2021 819 2022 807 2023 823 Thereafter 1,482 Total minimum lease payments $ 5,036 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 Agreements We are obligated to pay royalties pursuant to a license agreement with Purdue Neuroscience Company (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. In March 2017, the Company and CyDex Pharmaceuticals, Inc. (CyDex) entered into a License Agreement and a Supply Agreement. Under the terms of the License Agreement, CyDex has granted us an exclusive license to use CyDex’s Captisol drug formulation system and related intellectual property in connection with the development and commercialization of ganaxolone in any and all therapeutic uses in humans, with some exceptions. As consideration for this license, we paid an upfront fee which was recorded as research and development expense in 2017, and are required to make additional payments in the future upon achievement of various specified clinical and regulatory milestones. We will also be required to pay royalties to CyDex on sales of ganaxolone, if successfully developed, in the low-to-mid single digits based on levels of annual net sales. As of December 31, 2018, we have not met any additional milestones under the License Agreement and have not made any additional payments to CyDex other than the upfront fee. Under the terms of the Supply Agreement, we are required to purchase all of our requirements for Captisol with respect to ganaxolone from CyDex, and CyDex is required to supply us with Captisol for such purposes, subject to certain limitations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The Tax Cuts and Jobs Act (the "TCJA") was enacted on December 22, 2017 and became effective January 1, 2018. The TCJA had significant changes to U.S. tax law, lowering U.S. corporate income tax rates, implementing a territorial tax system, imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries and modified the taxation of other income and expense items. The TCJA reduced the U.S. corporate income tax rate from 34% to 21%, effective January 1, 2018. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 34% to 21% under the TCJA, we revalued deferred tax assets, net as of December 31, 2017. The tax impact of revaluation of the deferred tax assets, net was $16.1 million which was wholly offset by a corresponding reduction in our valuation allowance of $16.1 million resulting in a no net impact to our income tax expense. The TCJA provided for a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits. The Company did not have consolidated accumulated earnings and profits attributable to it foreign subsidiaries, accordingly, the Company did not record any income tax expense related to the transition tax. Due to the timing of the new tax law and the substantial changes it brings, the Staff of the SEC issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides registrants a measurement period to report the impact of the new US tax law. During the measurement period, provisional amounts for the effects of the law are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is not available, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one year following enactment of the TCJA. During 2018 we finalized our analysis of the impact of TCJA and have not recorded any adjustments to our provisional estimates. Loss before income taxes is allocated as follows (in thousands): Year Ended December 31, 2018 2017 2016 U.S. operations $ 7,855 $ 8,347 $ 28,643 Foreign operations 28,871 10,551 — Loss before income taxes $ 36,726 $ 18,898 $ 28,643 As of December 31, 2018 and 2017, we had approximately $131.6 million and $128.1 million, respectively, of net operating loss (NOL) carry forwards available to offset future federal and state taxable income that will expire beginning in 2023. We also have federal research and development credit carryovers of approximately $5.7 million and state credit carryovers of which approximately $0.4 million expire beginning in 2019. In 2017, we received net proceeds of $0.4 million from the sale of state research and development credits, which was recorded as a credit to research and development expenses on our consolidated statement of operations. 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. In addition, 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 have not evaluated 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, 2018 2017 Gross deferred tax assets: Net operating loss carryforwards $ 36,383 $ 35,559 Accrued expenses 52 52 Contributions 3 4 Deferred expenses — 35 Stock‑based compensation 1,640 1,459 Research and development and other credits 6,545 5,536 Total gross deferred tax assets $ 44,623 $ 42,645 Gross deferred tax liabilities: Depreciation (18) (17) Total gross deferred tax liabilities (18) (17) Net deferred tax assets 44,605 42,628 Less: valuation allowance (44,605) (42,628) 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, 2018 and 2017. The valuation allowance increased by $2.0 million and decreased by $12.9 million during the years ended December 31, 2018 and 2017, respectively. The increase in 2018 was due primarily to our increase in net operating loss carryovers. The decrease in 2017 was due primarily to the TCJA which reduces the federal corporate income tax rate in the United States to 21% from 34%, effective January 1, 2018. We did not have unrecognized tax benefits as of December 31, 2018 and 2017, 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, 2018 and 2017. As of December 31, 2018 and 2017, we have not accrued interest or penalties related to any uncertain tax positions. 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, 2018 2017 2016 Federal income tax expense at statutory rate 21.0 % 34.0 % 34.0 % Permanent items (0.9) (0.6) (1.2) State income tax, net of federal benefit 0.1 2.8 7.5 R&D tax credits 4.3 1.1 5.2 Change in federal statutory rate on deferreds (1.1) (85.6) — Foreign income tax effect (16.5) (19.0) — Other (1.6) (1.1) 1.6 Change in valuation allowance (5.3) 68.4 (47.1) Effective income tax rate % % % For all years through December 31, 2018, we generated research and development 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, 2015 through December 31, 2017. 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, 2018 | |
Quarterly Financial Information (unaudited) | |
Quarterly Financial Information (unaudited) | 11. Quarterly Financial Information (unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year 2018 Research and development expenses $ 3,927 $ 7,232 $ 9,148 $ 8,087 $ 28,394 General and administrative expenses $ 2,187 $ 2,338 $ 2,073 $ 2,187 $ 8,785 Net loss $ (5,999) $ (9,504) $ (11,110) $ (10,113) $ (36,726) Net loss per share, basic and diluted $ (0.15) $ (0.24) $ (0.27) $ $ 2017 Research and development expenses $ 3,573 $ 2,817 $ 2,642 $ 3,344 $ 12,376 General and administrative expenses $ 1,812 $ 1,691 $ 1,571 $ 1,593 $ 6,667 Net loss $ (5,438) $ (4,552) $ (4,170) $ (4,738) $ (18,898) Net loss per share, basic and diluted $ (0.26) $ (0.21) $ (0.15) $ $ |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated. |
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, 2018 and 2017, our financial instruments included cash equivalents, U.S. Treasury securities, accounts payable and accrued expenses. 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 U.S. Treasury securities is recorded at amortized cost based on the current market price of each security at the measurement date. 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 U.S. Treasury securities 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 Securities and Exchange Commission (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, 2018 and 2017, 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 As of December 31, 2018, our investments consisted of U.S. Treasury securities and are classified as available-for-sale and are recorded at amortized cost with unrealized gains and losses recorded in accumulated other comprehensive loss, as a separate component of stockholders’ equity. Interest income includes interest and dividends, realized gains and losses on sales of securities and other-than-temporary impairment (OTTI) declines in the fair value of securities, if any. U.S. Treasury securities with maturities less than 12 months are classified as short-term investments and maturities greater than 12 months are classified as long-term investments on our balance sheet. The Company reviews its available-for-sale securities for OTTI declines in fair value below its cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below its cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether the Company will more likely than not be required to sell, the security before recovery of its amortized cost basis. The Company’s assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. If a decline in the fair value of an available-for-sale security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value. If the Company intends to sell the security or it is more likely than not that the Company will be forced to sell the security before recovery of the amortized cost of the security, the loss is recognized in net income. Otherwise, the loss is separated into a portion representing a credit loss, which is recorded in net income, and the remainder is recorded in other comprehensive income, net of taxes. |
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. |
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, five years for office equipment and furniture, and five to fifteen years for laboratory equipment. 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. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Costs for certain development activities, such as clinical studies, 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, 2018 and 2017, 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 8. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except share and per share amounts): Year Ended December 31, 2018 2017 2016 Basic and diluted net loss per share of common stock: Net loss $ (36,726) $ (18,898) $ (28,643) Weighted average shares of common stock outstanding 40,895,406 23,540,748 19,498,143 Net loss per share of common stock—basic and diluted $ (0.90) $ (0.80) $ (1.47) The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive: December 31, 2018 2017 Restricted stock 105,200 239,800 Stock options 4,951,409 3,754,320 5,056,609 3,994,120 As of December 31, 2018, 2017 and 2016, 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. As of December 31, 2018 and 2017, comprehensive loss includes net loss and unrealized gain or loss on available-for-sale securities. |
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, non-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 restricted stock awards, the grant date fair value is determined by the closing market price of our common stock on the date of grant. For awards subject to time‑based vesting, we recognize stock‑based compensation expense, 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. |
Clinical Study Expenses | Clinical Study Expenses 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 studies. 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 study 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 study as measured by patient progression and the timing of various aspects of the study. 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 studies. During the course of a clinical study, 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 study 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, 2018, 2017 and 2016 there were no material adjustments to our prior period estimates of accrued expenses for clinical studies. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016, the Financial Accounting Standard Board ( FASB) issued Accounting Standards Update ( ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 and early adoption is not permitted. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have a material impact on our interim consolidated financial statements. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for us on January 1, 2019, with early adoption permitted. 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. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on January 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 January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected 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 do not expect to elect the use-of- hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect that this standard will have a material effect on our financial statements. We currently believe the most significant effects relate to (1) the recognition of new right of use (ROU) assets and lease liabilities on our balance sheet for our real estate operating leases and (2) providing significant new disclosures about our leasing activities. We do not expect a significant change in our leasing activities. During the first fiscal quarter of adoption, we currently expect to recognize additional operating liabilities of approximately $3.4 million, with corresponding ROU assets of approximately $2.5 million, based on the present value of the remaining minimum rental payments and other adjustments required by Topic 842 for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. For those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , which amends the guidance in Accounting Standards Codification (ASC) 230 on the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The guidance in the ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017, with early adoption permitted. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which superseded ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-base payment arrangements. We early-adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of computation of basic and diluted earnings per share | Year Ended December 31, 2018 2017 2016 Basic and diluted net loss per share of common stock: Net loss $ (36,726) $ (18,898) $ (28,643) Weighted average shares of common stock outstanding 40,895,406 23,540,748 19,498,143 Net loss per share of common stock—basic and diluted $ (0.90) $ (0.80) $ (1.47) |
Schedule of antidilutive securities excluded from the computation of diluted weighted average shares outstanding | December 31, 2018 2017 Restricted stock 105,200 239,800 Stock options 4,951,409 3,754,320 5,056,609 3,994,120 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Summary of major categories of financial assets and liabilities measured at fair value on a recurring basis | Level 1 Level 2 Level 3 Total December 31, 2018 Assets Money market funds (cash equivalents) $ 14,049 $ — $ — $ 14,049 U.S. Treasury securities — 4,998 — 4,998 Total assets $ 14,049 $ 4,998 $ — $ 19,047 December 31, 2017 Assets Money market funds (cash equivalents) $ 33,531 $ — $ — $ 33,531 U.S. Treasury securities — 24,825 — 24,825 Total assets $ 33,531 $ 24,825 $ — $ 58,356 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2018 2017 Laboratory equipment $ 1,756 $ 1,684 Office equipment 148 139 1,904 1,823 Less: accumulated depreciation (610) (484) $ 1,294 $ 1,338 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): December 31, 2018 2017 Payroll and related costs $ 1,364 $ 1,323 Clinical studies and drug development 2,781 156 Professional fees 204 113 Other 88 25 Total accrued expenses $ 4,437 $ 1,617 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of weighted-average assumptions estimated at the date of grant using the Black-Scholes option pricing model | 2018 2017 2016 Expected stock price volatility - % - % - % Expected term of options - years - 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 over the next four years as follows, in thousands: 2019 $ 3,413 2020 3,144 2021 1,161 2022 372 $ 8,090 |
Stock options | |
Schedule of total compensation cost recognized in the statement 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, 2018 2017 2016 Research and development $ 1,712 $ 724 $ 980 General and administrative 2,995 1,697 1,975 Total $ 4,707 $ 2,421 $ 2,955 |
Summary of activity for all options | A summary of activity for the years ended December 31, 2018, 2017 and 2016 is presented below (in thousands, except share and per share amounts): Weighted‑ Average Aggregate Exercise Price Intrinsic Shares Per Share Value Outstanding—December 31, 2015 1,799,226 $ 7.74 Granted 603,975 2.42 Exercised (118,365) 1.04 Forfeited (45,792) 12.08 Outstanding—December 31, 2016 2,239,044 6.57 Granted 1,884,800 4.02 Exercised (98,402) 1.46 Forfeited (141,358) 7.09 Expired (129,764) 11.75 Outstanding—December 31, 2017 3,754,320 5.22 Granted 1,372,000 6.60 Exercised (12,308) 1.18 Forfeited (162,603) 5.00 Outstanding—December 31, 2018 4,951,409 $ 5.62 $ 2,429 Exercisable—December 31, 2018 2,894,726 $ 5.69 $ 1,836 Exercisable and expected to vest—December 31, 2018 4,951,409 $ 5.62 $ 2,429 |
Restricted stock | |
Schedule of total compensation cost recognized in the statement of operations | Total compensation cost recognized for all restricted stock awards in the statements of operations for the year ended December 31, 2018 is as follows (in thousands): Year Ended December 31, 2018 2017 Research and development $ 19 $ 125 General and administrative 62 334 Total $ 81 $ 459 |
Summary of activity for all restricted stock | A summary of activity for the years ended December 31, 2018, 2017 and 2016 is presented below (in thousands, except share and per share amounts): Weighted‑average Grant Date Shares Fair Value per Share Outstanding—December 31, 2015 — $ — Granted 196,275 1.51 Forfeited (375) 1.50 Outstanding—December 31, 2016 195,900 1.51 Granted 245,200 1.26 Vested (179,700) 1.12 Forfeited (21,600) 0.17 Outstanding—December 31, 2017 239,800 1.21 Vested (120,600) 1.21 Forfeited (14,000) 1.21 Outstanding—December 31, 2018 105,200 $ 1.21 Expected to vest—December 31, 2018 105,200 $ 1.21 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 2019 $ 298 2020 807 2021 819 2022 807 2023 823 Thereafter 1,482 Total minimum lease payments $ 5,036 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Summary of loss before income taxes | Year Ended December 31, 2018 2017 2016 U.S. operations $ 7,855 $ 8,347 $ 28,643 Foreign operations 28,871 10,551 — Loss before income taxes $ 36,726 $ 18,898 $ 28,643 |
Schedule of components of the net deferred tax asset | The components of the net deferred tax asset are as follows (in thousands): December 31, 2018 2017 Gross deferred tax assets: Net operating loss carryforwards $ 36,383 $ 35,559 Accrued expenses 52 52 Contributions 3 4 Deferred expenses — 35 Stock‑based compensation 1,640 1,459 Research and development and other credits 6,545 5,536 Total gross deferred tax assets $ 44,623 $ 42,645 Gross deferred tax liabilities: Depreciation (18) (17) Total gross deferred tax liabilities (18) (17) Net deferred tax assets 44,605 42,628 Less: valuation allowance (44,605) (42,628) 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, 2018 2017 2016 Federal income tax expense at statutory rate 21.0 % 34.0 % 34.0 % Permanent items (0.9) (0.6) (1.2) State income tax, net of federal benefit 0.1 2.8 7.5 R&D tax credits 4.3 1.1 5.2 Change in federal statutory rate on deferreds (1.1) (85.6) — Foreign income tax effect (16.5) (19.0) — Other (1.6) (1.1) 1.6 Change in valuation allowance (5.3) 68.4 (47.1) Effective income tax rate % % % |
Quarterly Financial Informati_2
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information (unaudited) | |
Schedule of quarterly financial information | First Quarter Second Quarter Third Quarter Fourth Quarter Total Year 2018 Research and development expenses $ 3,927 $ 7,232 $ 9,148 $ 8,087 $ 28,394 General and administrative expenses $ 2,187 $ 2,338 $ 2,073 $ 2,187 $ 8,785 Net loss $ (5,999) $ (9,504) $ (11,110) $ (10,113) $ (36,726) Net loss per share, basic and diluted $ (0.15) $ (0.24) $ (0.27) $ $ 2017 Research and development expenses $ 3,573 $ 2,817 $ 2,642 $ 3,344 $ 12,376 General and administrative expenses $ 1,812 $ 1,691 $ 1,571 $ 1,593 $ 6,667 Net loss $ (5,438) $ (4,552) $ (4,170) $ (4,738) $ (18,898) Net loss per share, basic and diluted $ (0.26) $ (0.21) $ (0.15) $ $ |
Organization and Description _2
Organization and Description of the Business (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Liquidity | |||
Accumulated deficit | $ (181,453) | $ (144,727) | |
Secondary public offering | |||
Liquidity | |||
Issuance of common stock in connection with secondary public offering (in shares) | 12,000,000 | 10,733,334 | |
Proceeds from issuance of common stock, net of issuance costs | $ 42,100 | $ 37,700 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Computer equipment and software | |
Property and Equipment | |
Useful life | 3 years |
Office equipment and furniture | |
Property and Equipment | |
Useful life | 5 years |
Minimum | Laboratory equipment | |
Property and Equipment | |
Useful life | 5 years |
Maximum | Laboratory equipment | |
Property and Equipment | |
Useful life | 15 years |
Summary of Significant Accoun_5
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic and diluted net loss per share of common stock: | |||||||||||
Net loss | $ (10,113) | $ (11,110) | $ (9,504) | $ (5,999) | $ (4,738) | $ (4,170) | $ (4,552) | $ (5,438) | $ (36,726) | $ (18,898) | $ (28,643) |
Weighted average shares of common stock outstanding (in shares) | 40,895,406 | 23,540,748 | 19,498,143 | ||||||||
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (0.24) | $ (0.27) | $ (0.24) | $ (0.15) | $ (0.12) | $ (0.15) | $ (0.21) | $ (0.26) | $ (0.90) | $ (0.80) | $ (1.47) |
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 5,056,609 | 3,994,120 | |||||||||
Restricted stock | |||||||||||
Basic and diluted net loss per share of common stock: | |||||||||||
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 105,200 | 239,800 | |||||||||
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) | 4,951,409 | 3,754,320 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Segment Information | |
Number of operating segments | 1 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - Forecast $ in Millions | Mar. 31, 2019USD ($) |
Operating lease liabilities | $ 3.4 |
Operating lease ROU assets | $ 2.5 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Total assets | $ 19,047 | $ 58,356 |
U.S. Treasury securities | ||
Assets | ||
Investments | 4,998 | 24,825 |
Money market funds | ||
Assets | ||
Cash and cash equivalents, fair value | 14,049 | 33,531 |
Level 1 | ||
Assets | ||
Total assets | 14,049 | 33,531 |
Level 1 | Money market funds | ||
Assets | ||
Cash and cash equivalents, fair value | 14,049 | 33,531 |
Level 2 | ||
Assets | ||
Total assets | 4,998 | 24,825 |
Level 2 | U.S. Treasury securities | ||
Assets | ||
Investments | $ 4,998 | $ 24,825 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment | |||
Property and equipment, gross | $ 1,904 | $ 1,823 | |
Less: accumulated depreciation | (610) | (484) | |
Property and equipment | 1,294 | 1,338 | |
Depreciation expense | 127 | 126 | $ 23 |
Laboratory equipment | |||
Property and equipment | |||
Property and equipment, gross | 1,756 | 1,684 | |
Office equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 148 | $ 139 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Expenses | ||
Payroll and related costs | $ 1,364 | $ 1,323 |
Clinical studies and drug development | 2,781 | 156 |
Professional fees | 204 | 113 |
Other | 88 | 25 |
Total accrued expenses | $ 4,437 | $ 1,617 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Notes Payable | ||||
Interest Expense | $ 159 | $ 464 | ||
Credit facility | ||||
Notes Payable | ||||
Proceeds from the issuance of debt | $ 7,000 | |||
Term loans balance paid in full | $ 3,500 | |||
Penalty for prepayment | $ 0 | |||
Interest Expense | $ 200 | $ 500 |
Investments (Details)
Investments (Details) - U.S. Treasury securities $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities in an unrealized loss position | security | 1 | |
Other-than-temporary impairments | $ 0 | |
Total amortized cost | 5,000 | $ 24,900 |
Total fair value | 5,000 | 24,800 |
Unrealized loss | $ 1 | $ 96 |
Stockholders' Equity - Incentiv
Stockholders' Equity - Incentive Plans (Details) - shares | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 31, 2015 | |
Stock options | |||||
Stock option and incentive plans | |||||
Granted (in shares) | 1,372,000 | 1,884,800 | 603,975 | ||
Outstanding (in shares) | 4,951,409 | 3,754,320 | 2,239,044 | 1,799,226 | |
2005 Plan | |||||
Stock option and incentive plans | |||||
Common stock reserved for issuance (in shares) | 0 | ||||
2005 Plan | Stock options | |||||
Stock option and incentive plans | |||||
Outstanding (in shares) | 362,112 | ||||
2014 Plan | |||||
Stock option and incentive plans | |||||
Common stock reserved for issuance (in shares) | 1,302,703 | 3,302,703 | |||
2014 Plan | Stock options | |||||
Stock option and incentive plans | |||||
Outstanding (in shares) | 4,278,297 | ||||
2014 Plan | Restricted stock | |||||
Stock option and incentive plans | |||||
Outstanding (in shares) | 105,200 | ||||
Outside of 2014 Plan | Stock options | |||||
Stock option and incentive plans | |||||
Granted (in shares) | 311,000 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options and Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Additional Disclosures | |||
Aggregate exercise price of options that were net shares settled | $ 49 | ||
Number of options that were net shares settled | 7,893 | ||
Market value per share | $ 3.75 | $ 3.75 | |
Stock options | |||
Stock option and incentive plans | |||
Total compensation cost | $ 4,707 | $ 2,421 | $ 2,955 |
Contractual life | 7 years 1 month 6 days | ||
Stock Options | |||
Outstanding at the beginning of the period (in shares) | 3,754,320 | 2,239,044 | 1,799,226 |
Granted (in shares) | 1,372,000 | 1,884,800 | 603,975 |
Exercised (in shares) | (12,308) | (98,402) | (118,365) |
Forfeited (in shares) | (162,603) | (141,358) | (45,792) |
Expired (in shares) | (129,764) | ||
Outstanding at the end of the period (in shares) | 4,951,409 | 3,754,320 | 2,239,044 |
Exercisable at the end of the period (in shares) | 2,894,726 | ||
Exercisable and expected to vest at the end of the year (in shares) | 4,951,409 | ||
Weighted-Average Exercise Price Per Share | |||
Outstanding at the beginning of the period (in dollars per share) | $ 5.22 | $ 6.57 | $ 7.74 |
Granted (in dollars per share) | 6.60 | 4.02 | 2.42 |
Exercised (in dollars per share) | 1.18 | 1.46 | 1.04 |
Forfeited (in dollars per share) | 5 | 7.09 | 12.08 |
Expired (in dollars per share) | 11.75 | ||
Outstanding at the end of the period (in dollars per share) | 5.62 | 5.22 | 6.57 |
Exercisable at the end of the period (in dollars per share) | 5.69 | ||
Exercisable and expected to vest at the end of the year (in dollars per share) | $ 5.62 | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period | $ 2,429 | ||
Exercisable at the end of the period | 1,836 | ||
Exercisable and expected to vest at the end of the year | $ 2,429 | ||
Additional Disclosures | |||
Weighted average remaining contractual term | 7 years 10 months 24 days | ||
Weighted average remaining contractual term exercisable | 7 years 1 month 6 days | ||
Market value per share | $ 2.87 | ||
Weighted average grant date fair value (in dollars per share) | $ 5.51 | $ 2.67 | $ 1.60 |
Weighted-average assumptions | |||
Expected annual dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Unrecognized compensation expense | |||
Unrecognized compensation expense | $ 8,090 | ||
Stock options | Recognition in 2019 | |||
Unrecognized compensation expense | |||
Unrecognized compensation expense | 3,413 | ||
Stock options | Recognition in 2020 | |||
Unrecognized compensation expense | |||
Unrecognized compensation expense | 3,144 | ||
Stock options | Recognition in 2021 | |||
Unrecognized compensation expense | |||
Unrecognized compensation expense | 1,161 | ||
Stock options | Recognition in 2022 | |||
Unrecognized compensation expense | |||
Unrecognized compensation expense | $ 372 | ||
Stock options | Minimum | |||
Weighted-average assumptions | |||
Expected stock price volatility (as a percent) | 106.64% | 74.45% | 74.69% |
Expected term of options | 5 years 2 months 12 days | 5 years 3 months 18 days | 5 years 2 months 12 days |
Risk-free interest rate (as a percent) | 2.32% | 1.78% | 1.07% |
Stock options | Maximum | |||
Weighted-average assumptions | |||
Expected stock price volatility (as a percent) | 113.19% | 83.29% | 87.67% |
Expected term of options | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Risk-free interest rate (as a percent) | 3.10% | 2.18% | 1.86% |
Restricted stock | |||
Stock option and incentive plans | |||
Total compensation cost | $ 81 | $ 459 | |
Vesting period | 1 year | ||
Unrecognized compensation expense | |||
Unrecognized compensation cost | $ 100 | ||
Weighted-average recognition period of unrecognized compensation cost | 6 months 29 days | ||
Shares | |||
Restricted stock units outstanding at the beginning of the period (in shares) | 239,800 | 195,900 | |
Granted (in shares) | 0 | 245,200 | 196,275 |
Vested (in shares) | (120,600) | (179,700) | |
Forfeited (in shares) | (14,000) | (21,600) | (375) |
Restricted stock units outstanding at the end of the period (in shares | 105,200 | 239,800 | 195,900 |
Weighted Average Grant Date Fair Value | |||
Restricted stock units outstanding at the beginning of the period (in dollars per shares) | $ 1.21 | $ 1.51 | |
Granted (in dollars per share) | 1.26 | $ 1.51 | |
Vested (in dollars per share) | 1.21 | 1.12 | |
Forfeited (in dollars per share) | 1.21 | 0.17 | 1.50 |
Restricted stock units outstanding at the end of the period (in dollars per shares) | $ 1.21 | $ 1.21 | $ 1.51 |
2005 Plan | Stock options | |||
Stock Options | |||
Outstanding at the end of the period (in shares) | 362,112 | ||
2005 Plan | Stock options | 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 | Stock options | |||
Stock Options | |||
Outstanding at the end of the period (in shares) | 4,278,297 | ||
2014 Plan | Stock options | 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 | Restricted stock | |||
Stock Options | |||
Outstanding at the end of the period (in shares) | 105,200 | ||
Research and development | Stock options | |||
Stock option and incentive plans | |||
Total compensation cost | $ 1,712 | $ 724 | $ 980 |
Research and development | Restricted stock | |||
Stock option and incentive plans | |||
Total compensation cost | 19 | 125 | |
General and administrative | Stock options | |||
Stock option and incentive plans | |||
Total compensation cost | 2,995 | 1,697 | $ 1,975 |
General and administrative | Restricted stock | |||
Stock option and incentive plans | |||
Total compensation cost | $ 62 | $ 334 |
Stockholders' Equity _ Equity D
Stockholders' Equity – Equity Distribution Agreement (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2017 | Aug. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares issued | 40,549,936 | 52,548,244 | ||
2015 Equity Distribution Agreement | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of Equity Distribution Agreement | 3 years | |||
Value of common stock authorized | $ 35 | |||
Common stock, shares issued | 9,768,142 | |||
Net proceeds from issuance of common stock | $ 14.9 | |||
2015 Equity Distribution Agreement | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Sale of common stock, commission percentage | 3.00% | |||
2017 Equity Distribution Agreement | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of Equity Distribution Agreement | 3 years | |||
Value of common stock authorized | $ 50 | $ 50 | ||
Sale of common stock, commission percentage | 3.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018USD ($)ft² | Nov. 30, 2018ft²item | Dec. 31, 2015ft² | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Leases | ||||||
Operating lease agreement term | 3 years | |||||
Rental square feet office space | ft² | 1,000 | 4,000 | ||||
Number of operating lease annual renewal options | item | 0 | |||||
Rent expense under operating lease | $ 200 | $ 300 | $ 300 | |||
Annual future minimum lease payments | ||||||
2019 | $ 298 | 298 | ||||
2020 | 807 | 807 | ||||
2021 | 819 | 819 | ||||
2022 | 807 | 807 | ||||
2023 | 823 | 823 | ||||
Thereafter | 1,482 | 1,482 | ||||
Total minimum lease payments | $ 5,036 | $ 5,036 | ||||
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 | |||||
Second Amended Lease | ||||||
Leases | ||||||
Operating lease agreement term | 78 months | |||||
Rental square feet office space | ft² | 22,500 | 22,500 | ||||
License Agreement | Purdue Neuroscience Company | ||||||
License agreement | ||||||
Expiration period of obligation to pay royalties | 10 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income taxes | |||
Tax impact of revaluation of deferred tax assets under the TCJA | $ 16,100 | ||
Reduction in valuation allowance under the TCJA | 16,100 | ||
Loss before income taxes | |||
U.S. operations | 7,855 | $ 8,347 | $ 28,643 |
Foreign operations | 28,871 | 10,551 | |
Loss before income taxes | 36,726 | 18,898 | $ 28,643 |
Net operating loss carry forwards available to offset future federal and state taxable income | 131,600 | 128,100 | |
Proceeds from sale of research and development tax credits | 400 | ||
Gross deferred tax assets: | |||
Net operating loss carryforwards | 36,383 | 35,559 | |
Accrued expenses | 52 | 52 | |
Contributions | 3 | 4 | |
Deferred expenses | 35 | ||
Stock-based compensation | 1,640 | 1,459 | |
Research and development and other credits | 6,545 | 5,536 | |
Total gross deferred tax assets | 44,623 | 42,645 | |
Gross deferred tax liabilities: | |||
Depreciation | (18) | (17) | |
Total gross deferred tax liabilities | (18) | (17) | |
Net deferred tax assets | 44,605 | 42,628 | |
Less: valuation allowance | (44,605) | (42,628) | |
Net deferred tax assets after valuation allowance | 0 | 0 | |
Increase (decrease) in valuation allowance | $ 2,000 | $ (12,900) | |
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) | 21.00% | 34.00% | 34.00% |
Permanent items (as a percent) | (0.90%) | (0.60%) | (1.20%) |
State income tax, net of federal benefit (as a percent) | 0.10% | 2.80% | 7.50% |
R&D tax credits (as a percent) | 4.30% | 1.10% | 5.20% |
Change in federal statutory rate on deferreds (as a percent) | (1.10%) | (85.60%) | |
Foreign income tax effect (as a percent) | (16.50%) | (19.00%) | |
Other (as a percent) | (1.60%) | (1.10%) | 1.60% |
Change in valuation allowance (as a percent) | (5.30%) | 68.40% | (47.10%) |
Effective income tax rate (as a percent) | 0.00% | 0.00% | 0.00% |
Research tax credit carryforward | Federal | |||
Loss before income taxes | |||
Tax credit carryovers | $ 5,700 | ||
Research tax credit carryforward | State | |||
Loss before income taxes | |||
Tax credit carryovers | $ 400 |
Quarterly Financial Informati_3
Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information (unaudited) | |||||||||||
Research and development expenses | $ 8,087 | $ 9,148 | $ 7,232 | $ 3,927 | $ 3,344 | $ 2,642 | $ 2,817 | $ 3,573 | $ 28,394 | $ 12,376 | $ 22,005 |
General and administrative expenses | 2,187 | 2,073 | 2,338 | 2,187 | 1,593 | 1,571 | 1,691 | 1,812 | 8,785 | 6,667 | 6,237 |
Net loss | $ (10,113) | $ (11,110) | $ (9,504) | $ (5,999) | $ (4,738) | $ (4,170) | $ (4,552) | $ (5,438) | $ (36,726) | $ (18,898) | $ (28,643) |
Net loss per share, basic and diluted | $ (0.24) | $ (0.27) | $ (0.24) | $ (0.15) | $ (0.12) | $ (0.15) | $ (0.21) | $ (0.26) | $ (0.90) | $ (0.80) | $ (1.47) |