Marinus Pharmaceuticals (MRNS) 10-Q 1 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	MARINUS PHARMACEUTICALS INC
Entity Central Index Key	0001267813
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		52,554,625
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 60,848	$ 67,727
Short-term investments		4,998
Prepaid expenses and other current assets	2,024	1,215
Total current assets	62,872	73,940
Property and equipment, net	2,216	1,294
Other assets	2,531
Total assets	67,619	75,234
Current liabilities:
Accounts payable	1,932	2,472
Accrued expenses	4,745	4,437
Total current liabilities	6,677	6,909
Other long-term liabilities	3,197
Total liabilities	9,874	6,909
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, 52,583,856 issued and 52,554,625 outstanding at March 31, 2019 and 52,548,244 issued and 52,519,013 outstanding at December 31, 2018	53	53
Additional paid-in capital	251,628	249,727
Treasury stock at cost, 29,231 shares at March 31, 2019 and December 31, 2018
Accumulated other comprehensive loss		(2)
Accumulated deficit	(193,936)	(181,453)
Total stockholders’ equity	57,745	68,325
Total liabilities and stockholders’ equity	$ 67,619	$ 75,234

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
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	52,583,856	52,548,244
Common stock, shares outstanding	52,554,625	52,519,013
Treasury stock, shares	29,231	29,231

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Expenses:
Research and development	$ 8,872	$ 3,927
General and administrative	3,667	2,187
Loss from operations	(12,539)	(6,114)
Interest income	96	116
Other expense	(40)	(1)
Net loss	$ (12,483)	$ (5,999)
Per share information:
Net loss per share of common stock-basic and diluted (in dollars per share)	$ (0.24)	$ (0.15)
Basic and diluted weighted average shares outstanding (in shares)	52,465,207	40,373,083
Net loss	$ (12,483)	$ (5,999)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale securities	2	(11)
Total comprehensive loss	$ (12,481)	$ (6,010)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net loss	$ (12,483)	$ (5,999)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	36	31
Stock-based compensation expense	1,836	1,127
Loss on disposal of fixed assets	42
Noncash lease expense	46
Noncash lease liability interest	(55)
Amortization of discount on investments	(1)	(25)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(847)	(720)
Accounts payable and accrued expenses	(238)	(563)
Net cash used in operating activities	(11,664)	(6,149)
Cash flows from investing activities
Maturities of short-term investments	5,000
Deposit on property and equipment	(80)
Purchases of property and equipment	(52)	(8)
Net cash provided by (used in) investing activities	4,868	(8)
Cash flows from financing activities
Proceeds from exercise of stock options	65
Financing costs	(148)
Repayments of short-term bank borrowings		(193)
Net cash used in financing activities	(83)	(193)
Net decrease in cash and cash equivalents	(6,879)	(6,350)
Cash and cash equivalents—beginning of period	67,727	33,531
Cash and cash equivalents—end of period	60,848	$ 27,181
Supplemental disclosure of cash flow information
Property and equipment in accounts payable	48
Operating lease liability	3,357
Operating right-of-use asset	$ 2,458

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, 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		1,127				1,127
Unrealized loss on investments				(11)		(11)
Net loss					(5,999)	(5,999)
Balance at Mar. 31, 2018	$ 41	203,917		(107)	(150,726)	53,125
Balance (in shares) at Mar. 31, 2018	40,549,936		29,231
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
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense		1,836				1,836
Exercise of stock options		65				65
Exercise of stock options (in shares)	55,812
Forfeiture of restricted stock (in shares)	(20,200)
Unrealized loss on investments				$ 2		2
Net loss					(12,483)	(12,483)
Balance at Mar. 31, 2019	$ 53	$ 251,628			$ (193,936)	$ 57,745
Balance (in shares) at Mar. 31, 2019	52,583,856		29,231

Description of the Business and

Description of the Business and Liquidity	3 Months Ended
	Mar. 31, 2019
Description of the Business and Liquidity
Description of the Business and Liquidity	1. Description of the Business and Liquidity 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 GABA A being developed in two different routes of administration: intravenous (IV) and oral formulation. The multiple dose forms are intended to maximize the therapeutic range of ganaxolone for adult and pediatric patient populations, in acute and chronic care, and both in-patient and self-administered settings. Ganaxolone exhibits anti-seizure, anti-depression and anti-anxiety actions via its effects on synaptic and extrasynaptic GABA A receptors. 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 March 31, 2019 was $193.9 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 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 offering expenses, of $42.1 million.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all information and disclosures necessary for a presentation of our financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the United States of America (GAAP) for annual financial statements. In the opinion of management, these unaudited interim consolidated financial statements reflect the elimination of all intercompany accounts and transactions and all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2018 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 12, 2019. Use of Estimates The preparation of financial statements in conformity with 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 income and expenses during the reporting period. Actual results could differ from such estimates. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) established Topic 842, Leases , by issuing Accounting Standards Update (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 that requires a lessee to recognize a right-of-use (ROU) asset and lease liability on the balance sheet for all leases with a term longer than 12 months , and l eases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. We adopted ASU 2016-02 in the first quarter of 2019 utilizing the modified retrospective transition method on the effective date. Consequently, financial information has not been updated and the disclosures required under the new standard have not been provided for dates and periods before January 1, 2019. Upon adoption, we elected the ‘package of practical expedients,’ which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight practical expedient nor the practical expedient pertaining to land easements, the latter not being applicable to us . The adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of right-of-use assets of $2.5 million and lease liabilities for operating leases of $3.4 million on our interim consolidated balance sheets, with no material impact to our interim consolidated statements of operations, cash flows or stockholders’ equity. The operating lease liabilities were determined based on the present value of the remaining minimum retal payments and the operating lease asset was determined based on the value of the lease liability, adjusted for the lease incentive of $0.9 million. See Note 8 for further information regarding the impact of the adoption of ASU 2016-02 on our interim consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2019
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 We estimate the fair values of our 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. We obtain a single price for each financial instrument and do not adjust the prices obtained from the pricing service. We validate the prices provided by our 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 our validation procedures, we did not adjust or override any fair value measurements provided by our third-party pricing services as of December 31, 2018. As of March 31, 2019 there were no Level 2 inputs. 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 March 31, 2019 Assets Money market funds (cash equivalents) $ 24,465 $ — $ — $ 24,465 U.S. Treasury securities — — — — Total assets $ 24,465 $ — $ — $ 24,465 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

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2019
Accrued Expenses
Accrued Expenses	4. Accrued Expenses At March 31, 2019 and December 31, 2018 accrued expenses consisted of the following (in thousands): March 31, December 31, 2019 2018 Payroll and related costs $ 1,243 $ 1,364 Clinical trials and drug development 2,771 2,781 Professional fees 356 204 Other 375 88 Total accrued expenses $ 4,745 $ 4,437

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2019
Property and Equipment
Property and Equipment	5. Property and Equipment Property and equipment consisted of the following (in thousands): March 31, December 31, 2019 2018 Laboratory equipment $ 1,756 $ 1,756 Leasehold improvements 899 — Office furniture and equipment 134 148 2,789 1,904 Less: accumulated depreciation (573) (610) $ 2,216 $ 1,294

Loss Per Share of Common Stock

Loss Per Share of Common Stock	3 Months Ended
	Mar. 31, 2019
Loss Per Share of Common Stock
Loss Per Share of Common Stock	6. Loss Per Share of Common Stock Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, warrants, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation. These potentially dilutive securities are more fully described in Note 7, and summarized in the table below: March 31, 2019 2018 Restricted stock 32,400 125,867 Stock options 6,492,571 4,624,320 6,524,971 4,750,187

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2019
Stockholders' Equity
Stockholders' Equity	7. 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 March 31, 2019, 330,450 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. In August 2014, we adopted our 2014 Equity Incentive Plan, amended in May 2017 (2014 Plan), that authorizes us to grant options, restricted stock, and other equity-based awards, subject to adjustment in accordance with the 2014 Plan. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors. As of March 31, 2019, 5,696,121 options to purchase shares of common stock and 32,400 shares of restricted stock were outstanding pursuant to grants in connection with the 2014 Plan, and 1,880,929 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. Stock Options There were 6,492,571 stock options outstanding as of March 31, 2019 at a weighted-average exercise price of $5.13 per share. During the three months ended March 31, 2019, 1,813,000 options were granted to employees and directors at a weighted-average exercise price of $3.91 per share. Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands): Three Months Ended March 31, 2019 2018 Research and development $ 649 $ 313 General and administrative 1,177 778 Total $ 1,826 $ 1,091 Restricted Stock All issued and outstanding restricted shares of common stock are time-based, and become vested between one and three years after the grant date. 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 our common stock on the date of the grant. We did not issue any restricted shares of common stock during the three months ended March 31, 2019 or 2018. As of March 31, 2019 there were 32,400 restricted shares of common stock outstanding, and 52,600 shares vested during the three months ended March 31, 2019. Total compensation cost recognized for all restricted stock awards in the statements of operations is as follows (in thousands): Three Months Ended March 31, 2019 2018 Research and development $ 5 $ 7 General and administrative 5 28 Total $ 10 $ 35

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases
Leases	8. Leases We have entered into operating leases for real estate. These leases have terms which range from 36 to 78 months, and include renewal terms which can extend the lease terms by 24 to 60 months, which are included in the lease term when it is reasonably certain that we will exercise the option. As of March 31, 2019, our operating leases had a weighted average remaining lease term of 77 months. These operating leases are included in "Other assets" on our interim consolidated balance sheet as of March 31, 2019, and represent our right to use the underlying asset for the lease term. Our obligations to make lease payments are included in "Accrued expenses" and "Other long-term liabilities" on our interim consolidated balance sheet as of March 31, 2019. The ROU assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received. The ROU assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Our ROU assets have been adjusted for $0.9 million in lease incentives. Based on the present value of the lease payments for the remaining lease term of our existing leases, we initially recognized ROU assets of $2.5 million and lease liabilities for operating leases of $3.4 million during the first quarter of 2019. Operating lease right-of-use assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. As of March 31, 2019, total right-of-use assets and operating lease liabilities were $2.4 million and $3.4 million, respectively. We have entered into various short-term operating leases, primarily for clinical study equipment, with an initial term of twelve months or less. These leases are not recorded on our interim consolidated balance sheets. All operating lease expense is recognized on a straight-line basis over the lease term. During the three months ended March 31, 2019, we recognized $0.2 million in total lease costs, which was comprised of $0.2 million in operating lease costs for right-of-use assets and less than $0.1 million in short-term lease costs related to short-term operating leases. Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. The weighted average incremental borrowing rate used to determine the initial value of right-of-use assets and lease liabilities during the three months ended March 31, 2019 was 11.0%, derived from a corporate yield curve based on a synthetic credit rating model using a market signal analysis. We have certain contracts for real estate which may contain lease and non-lease components which we have elected to treat as a single lease component. ROU assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize. As of March 31, 2019, we have not recognized any impairment losses for our ROU assets. We monitor for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. Maturities of operating lease liabilities as of March 31, 2019 were as follows (in thousands): Remaining nine months of 2019 $ 213 2020 807 2021 818 2022 807 2023 823 Thereafter 1,482 $ 4,950 Less: imputed interest (1,537) Total lease liabilities $ 3,413 Current operating lease liabilities 216 Non-current operating lease liabilities 3,197 Total lease liabilities $ 3,413

Commitments

Commitments	3 Months Ended
	Mar. 31, 2019
Commitments
Commitments	9. Commitments Severance Arrangement In March 2019, we entered into a Severance Agreement and General Release (Severance Agreement) with Christopher M. Cashman (Cashman), our former Chief Executive Officer. In connection with this Severance Agreement, we agreed to pay certain severance benefits for one year to Cashman, including salary and benefits continuation and a prorated bonus totaling $0.6 million. As of March 31, 2019, $0.5 million in severance benefits remained unpaid. In addition, certain of Cashman’s outstanding stock option agreements were modified to accelerate vesting and extend the exercise period, resulting in additional compensation cost of $0.4 million.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all information and disclosures necessary for a presentation of our financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the United States of America (GAAP) for annual financial statements. In the opinion of management, these unaudited interim consolidated financial statements reflect the elimination of all intercompany accounts and transactions and all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2018 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 12, 2019.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with 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 income and expenses during the reporting period. Actual results could differ from such estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) established Topic 842, Leases , by issuing Accounting Standards Update (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 that requires a lessee to recognize a right-of-use (ROU) asset and lease liability on the balance sheet for all leases with a term longer than 12 months , and l eases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. We adopted ASU 2016-02 in the first quarter of 2019 utilizing the modified retrospective transition method on the effective date. Consequently, financial information has not been updated and the disclosures required under the new standard have not been provided for dates and periods before January 1, 2019. Upon adoption, we elected the ‘package of practical expedients,’ which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight practical expedient nor the practical expedient pertaining to land easements, the latter not being applicable to us . The adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of right-of-use assets of $2.5 million and lease liabilities for operating leases of $3.4 million on our interim consolidated balance sheets, with no material impact to our interim consolidated statements of operations, cash flows or stockholders’ equity. The operating lease liabilities were determined based on the present value of the remaining minimum retal payments and the operating lease asset was determined based on the value of the lease liability, adjusted for the lease incentive of $0.9 million. See Note 8 for further information regarding the impact of the adoption of ASU 2016-02 on our interim consolidated financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2019
Fair Value Measurements
Summary of major categories of financial assets and liabilities measured at fair value on a recurring basis	The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands): Level 1 Level 2 Level 3 Total March 31, 2019 Assets Money market funds (cash equivalents) $ 24,465 $ — $ — $ 24,465 U.S. Treasury securities — — — — Total assets $ 24,465 $ — $ — $ 24,465 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

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2019
Accrued Expenses
Schedule of accrued expenses	At March 31, 2019 and December 31, 2018 accrued expenses consisted of the following (in thousands): March 31, December 31, 2019 2018 Payroll and related costs $ 1,243 $ 1,364 Clinical trials and drug development 2,771 2,781 Professional fees 356 204 Other 375 88 Total accrued expenses $ 4,745 $ 4,437

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2019
Property and Equipment
Schedule of property and equipment	Property and equipment consisted of the following (in thousands): March 31, December 31, 2019 2018 Laboratory equipment $ 1,756 $ 1,756 Leasehold improvements 899 — Office furniture and equipment 134 148 2,789 1,904 Less: accumulated depreciation (573) (610) $ 2,216 $ 1,294

Loss Per Share of Common Stock

Loss Per Share of Common Stock (Tables)	3 Months Ended
	Mar. 31, 2019
Loss Per Share of Common Stock
Schedule of antidilutive securities excluded from the computation of diluted weighted average shares outstanding	March 31, 2019 2018 Restricted stock 32,400 125,867 Stock options 6,492,571 4,624,320 6,524,971 4,750,187

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2019
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): Three Months Ended March 31, 2019 2018 Research and development $ 649 $ 313 General and administrative 1,177 778 Total $ 1,826 $ 1,091
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 is as follows (in thousands): Three Months Ended March 31, 2019 2018 Research and development $ 5 $ 7 General and administrative 5 28 Total $ 10 $ 35

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases
Schedule of maturities of operating lease liabilities	Remaining nine months of 2019 $ 213 2020 807 2021 818 2022 807 2023 823 Thereafter 1,482 $ 4,950 Less: imputed interest (1,537) Total lease liabilities $ 3,413 Current operating lease liabilities 216 Non-current operating lease liabilities 3,197 Total lease liabilities $ 3,413

Description of the Business a_2

Description of the Business and Liquidity (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Mar. 31, 2019
Liquidity
Accumulated deficit	$ (181,453)	$ (193,936)
Secondary public offering
Liquidity
Issuance of common stock in connection with secondary public offering (in shares)	12,000,000
Proceeds from issuance of common stock, net of issuance costs	$ 42,100

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Summary of Significant Accounting Policies
Right-of-use assets	$ 2,400	$ 2,500
Operating lease liabilities	3,413	3,400
ROU adjustment for lease incentives	$ 900	$ 900

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Total assets	$ 24,465	$ 19,047
U.S. Treasury securities
Assets
Investments		4,998
Money market funds
Assets
Cash and cash equivalents, fair value	24,465	14,049
Level 1
Assets
Total assets	24,465	14,049
Level 1 | Money market funds
Assets
Cash and cash equivalents, fair value	24,465	14,049
Level 2
Assets
Total assets	$ 0	4,998
Level 2 | U.S. Treasury securities
Assets
Investments		$ 4,998

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued Expenses
Payroll and related costs	$ 1,243	$ 1,364
Clinical studies and drug development	2,771	2,781
Professional fees	356	204
Other	375	88
Total accrued expenses	$ 4,745	$ 4,437

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Property and equipment
Property and equipment, gross	$ 2,789	$ 1,904
Less: accumulated depreciation	(573)	(610)
Property and equipment	2,216	1,294
Laboratory equipment
Property and equipment
Property and equipment, gross	1,756	1,756
Leasehold improvements
Property and equipment
Property and equipment, gross	899
Office furniture and equipment
Property and equipment
Property and equipment, gross	$ 134	$ 148

Loss Per Share of Common Stoc_2

Loss Per Share of Common Stock (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	6,524,971	4,750,187
Restricted stock
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	32,400	125,867
Stock options.
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	6,492,571	4,624,320

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock options
Stock option and incentive plans
Total compensation cost	$ 1,826	$ 1,091
Stock Options
Outstanding (in shares)	6,492,571
Outstanding, weighted-average exercise price (in dollars per share)	$ 5.13
Granted (in shares)	1,813,000
Granted (in dollars per share)	$ 3.91
Stock options | Research and development
Stock option and incentive plans
Total compensation cost	$ 649	313
Stock options | General and administrative
Stock option and incentive plans
Total compensation cost	1,177	778
Restricted stock
Stock option and incentive plans
Total compensation cost	$ 10	35
Shares
Outstanding (in shares)	32,400
Issued (in shares)	0
Vested (in shares)	52,600
Restricted stock | Minimum
Stock option and incentive plans
Vesting period	1 year
Restricted stock | Maximum
Stock option and incentive plans
Vesting period	3 years
Restricted stock | Research and development
Stock option and incentive plans
Total compensation cost	$ 5	7
Restricted stock | General and administrative
Stock option and incentive plans
Total compensation cost	$ 5	$ 28
2005 Plan
Stock option and incentive plans
Common stock reserved for issuance (in shares)	0
2005 Plan | Stock options
Stock Options
Outstanding (in shares)	330,450
2014 Plan
Stock option and incentive plans
Common stock reserved for issuance (in shares)	1,880,929
2014 Plan | Stock options
Stock Options
Outstanding (in shares)	5,696,121
2014 Plan | Restricted stock
Shares
Outstanding (in shares)	32,400

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019
Leases
Weighted average remaining lease term	77 months
ROU adjustment for lease incentives	$ 900	$ 900
Right-of-use assets	2,400	2,500
Operating lease liabilities	3,413	3,400
Total lease costs	200
Operating lease costs for right-of-use assets	$ 200
Weighted-average incremental borrowing rate used to determine right-of-use assets and lease liabilities	11.00%
Operating Lease Liabilities, Payments, Due, Rolling Maturity [Abstract]
Remaining nine months of 2019	$ 213
2020	807
2021	818
2022	807
2023	823
Thereafter	1,482
Total lease payments	4,950
Less: imputed interest	(1,537)
Total lease liabilities	3,413	$ 3,400
Current operating lease liabilities	216
Non-current operating lease liabilities	$ 3,197
Minimum
Leases
Operating lease agreement term	36 months
Operating lease renewal term	24 months
Maximum
Leases
Operating lease agreement term	78 months
Operating lease renewal term	60 months
Short-term operating lease costs	$ 100

Commitments (Details)

Commitments (Details) - Severance Agreement $ in Millions	1 Months Ended
	Mar. 31, 2019USD ($)
Salary and benefits continuation and prorated bonus	$ 0.6
Unpaid benefits	0.5
Accelerated vesting of stock option agreements	$ 0.4