Marinus Pharmaceuticals (MRNS) 10-Q 4 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Document and Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	MARINUS PHARMACEUTICALS INC
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		86,732,035
Entity Central Index Key	0001267813
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 70,326	$ 90,943
Short-term investments	7,460	739
Prepaid expenses and other current assets	2,212	2,452
Total current assets	79,998	94,134
Property and equipment, net	2,186	2,265
Other assets	2,374	2,443
Total assets	84,558	98,842
Current liabilities:
Accounts payable	2,845	2,763
Accrued expenses	7,479	5,268
Total current liabilities	10,325	8,031
Other long-term liabilities	2,921	3,042
Total liabilities	13,245	11,073
Series A convertible preferred stock, $0.001 par value; 25,000,000 shares authorized, 30,000 shares issued and outstanding at March 31, 2020 and December 31, 2019	28,200	28,200
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized, 86,761,236 issued and 86,732,035 outstanding at March 31, 2020 and 86,500,353 issued and 86,471,122 outstanding at December 31, 2019	87	87
Additional paid-in capital	306,124	295,056
Treasury stock at cost, 29,231 shares at March 31, 2020 and December 31, 2019
Accumulated other comprehensive income	28
Accumulated deficit	(263,126)	(235,574)
Total stockholders’ equity	43,113	59,569
Total liabilities and stockholders’ equity	$ 84,558	$ 98,842

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Series A convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Series A convertible preferred stock, shares authorized	25,000,000	25,000,000
Series A convertible preferred stock, shares issued	30,000	30,000
Series A convertible preferred stock, shares outstanding	30,000	30,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	86,761,266	86,500,353
Common stock, shares outstanding	86,732,035	86,471,122
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, 2020	Mar. 31, 2019
Expenses:
Research and development	$ 15,004	$ 8,872
General and administrative	3,850	3,667
Loss from operations	(18,854)	(12,539)
Interest income	222	96
Other expense	(40)	(40)
Net loss	(18,672)	(12,483)
Deemed divideds on convertible preferred stock	(8,880)
Net loss applicable to common shareholders	$ (27,552)	$ (12,483)
Per share information:
Net loss per share of common stock—basic and diluted	$ (0.32)	$ (0.24)
Basic and diluted weighted average shares outstanding	86,661,845	52,465,207
Net loss	$ (18,672)	$ (12,483)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities	28	2
Total comprehensive loss	$ (18,644)	$ (12,481)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities
Net loss	$ (18,672)	$ (12,483)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	84	36
Stock-based compensation expense	1,876	1,836
Loss on disposal of fixed assets		42
Noncash lease expense	62	46
Noncash lease liability	95	(55)
Amortization of premium on investments	1	(1)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	258	(847)
Accounts payable and accrued expenses	2,259	(238)
Net cash used in operating activities	(14,037)	(11,664)
Cash flows from investing activities
Maturities of short-term investments	1,737	5,000
Purchases of short-term investments	(8,433)
Deposit on property and equipment		(80)
Purchases of property and equipment	(1)	(52)
Net cash provided by investing activities	(6,697)	4,868
Cash flows from financing activities
Proceeds from exercise of stock options	312	65
Financing costs	(195)	(148)
Net cash provided by/(used in) financing activities	117	(83)
Net decrease in cash and cash equivalents	(20,617)	(6,879)
Cash and cash equivalents—beginning of year	90,943	67,727
Cash and cash equivalents—end of year	$ 70,326	60,848
Supplemental disclosure of cash flow information
Property and equipment in accounts payable and accrued expenses		48
Operating lease liability		3,357
Operating right-of-use asset		$ 2,458

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 53,000	$ 249,727,000	$ 29,231	$ (2,000)	$ (181,453,000)	$ 68,325,000
Balance (in shares) at Dec. 31, 2018	52,548,244
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense		1,836,000				1,836,000
Exercise of stock options		65,000				65,000
Exercise of stock options (in shares)	55,812
Forfeiture of restricted stock (in shares)	(20,200)
Unrealized gain on investments				2,000		2,000
Net loss					(12,483,000)	(12,483,000)
Balance at Mar. 31, 2019	$ 53,000	251,628,000	29,231		(193,936,000)	57,745,000
Balance (in shares) at Mar. 31, 2019	52,583,856
Balance at Dec. 31, 2019	$ 87,000	295,056,000	29,231		(235,574,000)	59,569,000
Balance (in shares) at Dec. 31, 2019	86,500,353
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense		1,876,000				1,876,000
Exercise of stock options		312,000				312,000
Exercise of stock options (in shares)	239,913
Issuance of restricted stock (in shares)	21,000
Unrealized gain on investments				28,000		28,000
Deemed dividend on beneficial conversion feature - Series A convertible preferred stock		8,880,000			(8,880,000)
Net loss					(18,672,000)	(18,672,000)
Balance at Mar. 31, 2020	$ 87,000	$ 306,124,000	$ 29,231	$ 28,000	$ (263,126,000)	$ 43,113,000
Balance (in shares) at Mar. 31, 2020	86,761,266

Description of the Business and

Description of the Business and Liquidity	3 Months Ended
	Mar. 31, 2020
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 patients suffering from rare seizure disorders. Our clinical stage product candidate, ganaxolone, is a positive allosteric modulator of GABA A that is being developed in formulations for two different routes of administration: intravenous (IV) and oral. Ganaxolone is a synthetic analog of allopregnanolone, an endogenous neurosteroid. The different formulations are intended to maximize potential therapeutic applications of ganaxolone for adult and pediatric patient populations, in both acute and chronic care, and for both in‑patient and self‑administered settings. Ganaxolone acts at both synaptic and extrasynaptic GABA A receptors, a target known for its anti‑seizure, antidepressant and anxiolytic potential . In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus has been declared a pandemic by the World Health Organization and has spread to other countries, including the United States. Efforts to contain the spread of COVID-19 have intensified and many countries, including the United States, have implemented severe travel restrictions, business shutdowns and social distancing measures that have impacted clinical development through supply chain shortages and clinical trial enrollment difficulties as hospitals reduce and divert staffing, divert resources to patients suffering from the infectious disease and limit hospital access for non-patients. The outbreak of COVID-19 poses the risk that we or our employees, contractors, suppliers, and other partners may be prevented from conducting normal business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. The continued spread of COVID-19 globally has impacted our operations but did not have a material impact on our business, operating results, financial condition or cash flows as of and for the three months ended March 31, 2020. For example, our Phase 1 supportive clinical trials of oral ganaxolone in CDD have experienced delays in enrollment due to COVID-19. Further, i n response to COVID-19, for our ongoing clinical trials, we have implemented multiple measures consistent with the U.S. Food and Drug Administration’s guidance on the conduct of clinical trials of medical products during the COVID-19 pandemic, including implementing remote site monitoring and remote visits using telemedicine where needed. Although operations have not been materially affected by the COVID-19 pandemic as of and for the three months ended March 31, 2020, we are unable to predict the impact that COVID-19 will have in the future on our business, financial position, operating results and cash flows due to numerous uncertainties. The duration and severity of the pandemic and its long-term impact on our business are uncertain at this time, and our ability to raise sufficient additional financing depends on many factors beyond our control, including the current volatility in the capital markets as a result of the COVID-19 pandemic Liquidity We have not generated any product revenues and have incurred operating losses since inception, including losses of $18.7 million for the three months ended March 31, 2020. 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, 2020 was $263.1 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, collaborations, licensing transactions and other commercial transactions and revenues from 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 product candidates . In connection with the closing of concurrent equity financings during the fourth quarter of 2019, we issued a total of 32,200,000 shares of common stock in an underwritten public offering and 30,000 shares of Series A convertible preferred stock in a private placement resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $65.7 million. We also raised, during the fourth quarter of 2019, net proceeds of $2.1 million in connection with the sale of 1,692,289 shares of common stock under our equity distribution agreement.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
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, 2019 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 16, 2020. 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. New Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We adopted the ASU effective as of January 1, 2020. Our cash equivalents and short-term investments are accounted for as available-for-sale debt instruments and certificates of deposit, recorded at fair value. Interest income on these instruments is recorded as “Other income” on the interim consolidated statements of operations and comprehensive loss. We have never experienced a credit loss on the principal or interest receivable of our cash equivalents or short-term investments. Our available-for-sale debt securities represent United States (U.S.) treasury securities, and our certificates of deposit are each individually and fully insured by the Federal Deposit Insurance Corporation (FDIC). Accordingly, we did not measure an allowance for credit losses on these securities and we did not record a cumulative-effect adjustment to accumulated deficit during the three months ended March 31, 2020 upon adoption of ASU No. 2016-13.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
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 March 31, 2020. 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, 2020 Assets Money market funds (cash equivalents) $ 60,095 $ — $ — $ 60,095 Certificates of deposit (cash equivalents) 498 — — 498 Certificates of deposit 5,446 — — 5,446 U.S. Treasury securities — 2,015 — 2,015 Total assets $ 66,039 $ 2,015 $ — $ 68,054 December 31, 2019 Assets Money market funds (cash equivalents) $ 85,395 $ — $ — $ 85,395 Certificates of deposit 739 — — 739 Total assets $ 86,134 $ — $ — $ 86,134

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2020
Accrued Expenses
Accrued Expenses	4. Accrued Expenses Accrued expenses consisted of the following (in thousands): March 31, December 31, 2020 2019 Payroll and related costs $ 1,349 $ 2,514 Clinical trials and drug development 5,047 1,849 Professional fees 574 396 Short-term lease liabilities 462 446 Other 47 63 Total accrued expenses $ 7,479 $ 5,268

Investments

Investments	3 Months Ended
	Mar. 31, 2020
Investments
Investments	5. Investments As of March 31, 2020, our short-term investments consisted of U.S. Treasury securities, maturing at various dates through November 2020, and certificates of deposit with various financial institutions maturing at various dates through February 2021. U.S. Treasury securities are classified as short-term investments on our interim consolidated balance sheets and certificates of deposit are classified as short-term investments or cash equivalents on our interim consolidated balance sheets. U.S Treasury securities and certificates of deposit are classified as available-for-sale and are recorded at fair value. The total fair value of our available-for-sale securities as of March 31, 2020 was $7.5 million.

Loss Per Share of Common Stock

Loss Per Share of Common Stock	3 Months Ended
	Mar. 31, 2020
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, 2020 2019 Convertible preferred stock 24,000,000 — Restricted stock 21,000 32,400 Stock options 13,056,165 6,492,571 37,077,165 6,524,971

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2020
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, 2020, 327,421 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, 2020, 11,384,244 options to purchase shares of common stock and 21,000 shares of restricted stock were outstanding pursuant to grants in connection with the 2014 Plan, and 615,008 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 13,056,165 stock options outstanding as of March 31, 2020 at a weighted-average exercise price of $3.25 per share. During the three months ended March 31, 2020, 5,038,200 options were granted to employees and directors at a weighted-average exercise price of $2.04 per share. Of the options granted, 4,749,700 options were granted pursuant to the 2014 Plan and 288,500 were granted outside of the 2014 Plan as inducements for new employees. Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 729 $ 649 General and administrative 1,146 1,177 Total $ 1,875 $ 1,826 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 issued 21,000 and 0 restricted shares of common stock during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 there were 21,000 restricted shares of common stock outstanding, and 32,400 shares vested during the three months ended March 31, 2020. Total compensation cost recognized for all restricted stock awards in the statements of operations is as follows (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ — $ 5 General and administrative 1 5 Total $ 1 $ 10 Deemed Dividends On March 31, 2020, our stockholders approved an amendment to our company charter with the Secretary of State of the State of Delaware to increase the the number of authorized shares of common stock, which resulted in the recognition of a beneficial conversion feature on the Series A convertible preferred stock. Accordingly, we recorded $8.9 million in deemed dividends in the three months ended March 31, 2020, which was calculated as t he difference between the conversion price and the fair value of our common stock on the commitment date (transaction date) i n connection with the closing of concurrent equity financings during the fourth quarter of 2019.

Leases

Leases	3 Months Ended
	Mar. 31, 2020
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 30, 2020, our operating leases had a weighted average remaining lease term of 65 months. These right-of-use (ROU) assets are included in "Other assets" on our interim consolidated balance sheets as of March 31, 2020 and December 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 sheets as of March 31, 2020 and December 31, 2019. The ROU assets were 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 as of March 31, 2020 and December 31, 2019 have been adjusted for $0.9 million in lease incentives. As of March 31, 2020 and December 31, 2019, ROU assets were $2.2 million at each period, and operating lease liabilities were $3.4 million and $3.5 million, respectively. We have entered into various short-term operating leases, primarily for clinical trial equipment, with an initial term of twelve months or less. These leases are not recorded on our 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, 2020 and December 31, 2019, we recognized $0.2 million and $0.7 million, respectively, in total lease costs, which included 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 ROU assets and lease liabilities 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 Accounting Standards Codification (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, 2020 and December 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 our 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 our interim consolidated statements of operations and comprehensive loss. Maturities of operating lease liabilities as of March 31, 2020 were as follows (in thousands): Remaining nine months of 2020 $ 608 2021 818 2022 807 2023 823 2024 840 Thereafter 641 4,537 Less: imputed interest (1,154) Total lease liabilities $ 3,383 Current operating lease liabilities $ 462 Non-current operating lease liabilities 2,921 Total lease liabilities $ 3,383

Commitments

Commitments	3 Months Ended
	Mar. 31, 2020
Commitments
Commitments	9. Commitments Severance Arrangements 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, consisting of base salary and benefits continuation and a prorated bonus totaling $0.6 million. As of March 31, 2020, all severance benefits have been paid to Mr. Cashman.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
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, 2019 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 16, 2020.
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.
New Accounting Pronouncements	New Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We adopted the ASU effective as of January 1, 2020. Our cash equivalents and short-term investments are accounted for as available-for-sale debt instruments and certificates of deposit, recorded at fair value. Interest income on these instruments is recorded as “Other income” on the interim consolidated statements of operations and comprehensive loss. We have never experienced a credit loss on the principal or interest receivable of our cash equivalents or short-term investments. Our available-for-sale debt securities represent United States (U.S.) treasury securities, and our certificates of deposit are each individually and fully insured by the Federal Deposit Insurance Corporation (FDIC). Accordingly, we did not measure an allowance for credit losses on these securities and we did not record a cumulative-effect adjustment to accumulated deficit during the three months ended March 31, 2020 upon adoption of ASU No. 2016-13.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2020
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, 2020 Assets Money market funds (cash equivalents) $ 60,095 $ — $ — $ 60,095 Certificates of deposit (cash equivalents) 498 — — 498 Certificates of deposit 5,446 — — 5,446 U.S. Treasury securities — 2,015 — 2,015 Total assets $ 66,039 $ 2,015 $ — $ 68,054 December 31, 2019 Assets Money market funds (cash equivalents) $ 85,395 $ — $ — $ 85,395 Certificates of deposit 739 — — 739 Total assets $ 86,134 $ — $ — $ 86,134

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2020
Accrued Expenses
Schedule of accrued expenses	Accrued expenses consisted of the following (in thousands): March 31, December 31, 2020 2019 Payroll and related costs $ 1,349 $ 2,514 Clinical trials and drug development 5,047 1,849 Professional fees 574 396 Short-term lease liabilities 462 446 Other 47 63 Total accrued expenses $ 7,479 $ 5,268

Loss Per Share of Common Stock

Loss Per Share of Common Stock (Tables)	3 Months Ended
	Mar. 31, 2020
Loss Per Share of Common Stock
Schedule of antidilutive securities excluded from the computation of diluted weighted average shares outstanding	March 31, 2020 2019 Convertible preferred stock 24,000,000 — Restricted stock 21,000 32,400 Stock options 13,056,165 6,492,571 37,077,165 6,524,971

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2020
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, 2020 2019 Research and development $ 729 $ 649 General and administrative 1,146 1,177 Total $ 1,875 $ 1,826
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, 2020 2019 Research and development $ — $ 5 General and administrative 1 5 Total $ 1 $ 10

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases
Schedule of maturities of operating lease liabilities	Remaining nine months of 2020 $ 608 2021 818 2022 807 2023 823 2024 840 Thereafter 641 4,537 Less: imputed interest (1,154) Total lease liabilities $ 3,383 Current operating lease liabilities $ 462 Non-current operating lease liabilities 2,921 Total lease liabilities $ 3,383

Description of the Business a_2

Description of the Business and Liquidity (Details) - USD ($)	3 Months Ended
	Dec. 31, 2019	Mar. 31, 2020
Liquidity
Accumulated deficit	$ 235,574,000	$ 263,126,000
Net proceeds from issuance of common stock and preferred stock	$ 65,700,000
Public Offering
Liquidity
Issuance of stock (in shares)	32,200,000
2017 Equity Distribution Agreement
Liquidity
Net proceeds from issuance of common stock	$ 2,100,000
Issuance of shares under equity distribution agreement (in shares)	1,692,289
Series A Convertible Preferred Stock | Private placement
Liquidity
Issuance of Series A convertible preferred stock (in shares)	$ 30,000

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Summary of Significant Accounting Policies
Right-of-use assets	$ 2,200	$ 2,200
Operating lease liabilities	3,383	3,500
ROU adjustment for lease incentives	$ 900	$ 900

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets
Total assets	$ 68,054	$ 86,134
U.S. Treasury securities
Assets
Investments	2,015
Money market funds
Assets
Cash and cash equivalents, fair value	60,095	85,395
Certificates of deposit
Assets
Cash and cash equivalents, fair value	498
Investments	5,446	739
Level 1
Assets
Total assets	66,039	86,134
Level 1 | Money market funds
Assets
Cash and cash equivalents, fair value	60,095	85,395
Level 1 | Certificates of deposit
Assets
Cash and cash equivalents, fair value	498
Investments	5,446	$ 739
Level 2
Assets
Total assets	2,015
Level 2 | U.S. Treasury securities
Assets
Investments	$ 2,015

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accrued Expenses
Payroll and related costs	$ 1,349	$ 2,514
Clinical trials and drug development	5,047	1,849
Professional fees	574	396
Short-term lease liabilities	462	446
Other	47	63
Total accrued expenses	$ 7,479	$ 5,268

Investments (Details)

Investments (Details) $ in Millions	Mar. 31, 2020USD ($)
Investments
Total fair value of available-for-sale securities	$ 7.5

Loss Per Share of Common Stoc_2

Loss Per Share of Common Stock (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	37,077,165	6,524,971
Convertible preferred stock
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	24,000,000
Restricted stock
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	21,000	32,400
Stock options.
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	13,056,165	6,492,571

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Deemed Dividends
Deemed dividends on Series A convertible preferred stock	$ 8,900
Stock options
Stock option and incentive plans
Total compensation cost	$ 1,875	$ 1,826
Stock Options
Outstanding (in shares)	13,056,165
Outstanding, weighted-average exercise price (in dollars per share)	$ 3.25
Granted (in shares)	5,038,200
Granted (in dollars per share)	$ 2.04
Stock options | Research and development
Stock option and incentive plans
Total compensation cost	$ 729	649
Stock options | General and administrative
Stock option and incentive plans
Total compensation cost	1,146	1,177
Restricted stock
Stock option and incentive plans
Total compensation cost	$ 1	$ 10
Shares
Issued (in shares)	21,000	0
Outstanding (in shares)	21,000
Vested (in shares)	32,400
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
Restricted stock | General and administrative
Stock option and incentive plans
Total compensation cost	$ 1	$ 5
2005 Plan
Stock option and incentive plans
Common stock reserved for issuance (in shares)	0
2005 Plan | Stock options
Stock Options
Outstanding (in shares)	327,421
2014 Plan
Stock option and incentive plans
Common stock reserved for issuance (in shares)	615,008
2014 Plan | Stock options
Stock Options
Outstanding (in shares)	11,384,244
Granted (in shares)	4,749,700
2014 Plan | Restricted stock
Shares
Outstanding (in shares)	21,000
Equity Incentive Plan, Employee Inducments | Stock options
Stock Options
Granted (in shares)	288,500

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Leases
Weighted average remaining lease term	65 months
ROU adjustment for lease incentives	$ 900	$ 900
Right-of-use assets	2,200	2,200
Operating lease liabilities	$ 3,383	$ 3,500
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent	us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent
Total lease costs	$ 200	$ 700
Weighted-average incremental borrowing rate used to determine right-of-use assets and lease liabilities	11.00%
Maturities of operating lease liabilities
Remaining nine months of 2020	$ 608
2021	818
2022	807
2023	823
2024	840
Thereafter	641
Total lease payments	4,537
Less: imputed interest	(1,154)
Total lease liabilities	3,383	3,500
Current operating lease liabilities	462
Non-current operating lease liabilities	$ 2,921
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	$ 100

Commitments - License and Sever

Commitments - License and Severance Arrangements (Details) $ in Millions	Mar. 31, 2019USD ($)
Severance Arrangements, Chief Executive Officer
Commitments
Salary and benefits continuation, commitment	$ 0.6