Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 08, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-36576 | ||
Entity Registrant Name | Marinus Pharmaceuticals, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-0198082 | ||
Entity Address, Address Line One | 5 Radnor Corporate Center, Suite 500 | ||
Entity Address, Address Line Two | 100 Matsonford Road | ||
Entity Address, City or Town | Radnor | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19087 | ||
City Area Code | 484 | ||
Local Phone Number | 801-4670 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | MRNS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 303,163,851 | ||
Entity Common Stock, Shares Outstanding | 36,578,460 | ||
Entity Central Index Key | 0001267813 | ||
Current Fiscal Year End Date | --12-31 | ||
ICFR Auditor Attestation Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 138,509 | $ 90,943 |
Short-term investments | 1,474 | 739 |
Federal contract revenue receivable | 1,646 | |
Prepaid expenses and other current assets | 4,638 | 2,452 |
Total current assets | 146,267 | 94,134 |
Property and equipment, net | 1,945 | 2,265 |
Other assets | 2,250 | 2,443 |
Total assets | 150,462 | 98,842 |
Current liabilities: | ||
Accounts payable | 2,211 | 2,763 |
Accrued expenses | 8,518 | 5,268 |
Total current liabilities | 10,729 | 8,031 |
Other long-term liabilities | 2,534 | 3,042 |
Total liabilities | 13,263 | 11,073 |
Commitments and contingencies (Note 10) | ||
Series A convertible preferred stock, $0.001 par value; 25,000,000 shares authorized, 30,000 shares issued and outstanding at December 31, 2019 | 28,200 | |
Stockholders' equity: | ||
Series A convertible preferred stock, $0.001 par value; 25,000,000 shares authorized, 4,753 shares issued and outstanding at December 31, 2020 | 4,469 | |
Common stock, $0.001 par value; 150,000,000 shares authorized, 36,585,767 issued and 36,578,460 outstanding at December 31, 2020 and 21,625,088 issued and 21,617,780 outstanding at December 31, 2019 | 37 | 22 |
Additional paid-in capital | 444,622 | 295,121 |
Treasury stock at cost, 7,307 shares at December 31, 2020 and December 31, 2019 | ||
Accumulated deficit | (311,929) | (235,574) |
Total stockholders' equity | 137,199 | 59,569 |
Total liabilities and stockholders' equity | $ 150,462 | $ 98,842 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Series A convertible preferred stock, par value (in dollars per share) | $ 0.001 | |
Series A convertible preferred stock, shares authorized | 25,000,000 | |
Series A convertible preferred stock, shares issued | 30,000 | |
Series A convertible preferred stock, shares outstanding | 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 | 36,585,767 | 21,625,088 |
Common stock, shares outstanding | 36,578,460 | 21,617,781 |
Treasury stock, shares | 7,307 | 7,307 |
Series A Convertible Preferred Stock | ||
Series A convertible preferred stock, shares outstanding | 4,753 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized | 25,000,000 | |
Preferred Stock, Shares Issued | 4,753 | |
Preferred stock, shares outstanding | 4,753 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Federal contract revenue | $ 1,718 | |
Expenses: | ||
Research and development | 51,106 | $ 42,966 |
General and administrative | 18,549 | 11,456 |
Loss from operations | (67,937) | (54,422) |
Interest income | 499 | 354 |
Other expense, net | (37) | (53) |
Net loss and comprehensive loss | (67,475) | (54,121) |
Deemed dividends on convertible preferred stock | (8,880) | |
Net loss and comprehensive loss applicable to common shareholders | $ (76,355) | $ (54,121) |
Per share information: | ||
Net loss per share of common stock-basic and diluted | $ (2.80) | $ (3.97) |
Basic and diluted weighted average shares outstanding | 27,270,055 | 13,628,194 |
Net loss | $ (67,475) | $ (54,121) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Follow-on Public Offering, OneCommon Stock | Follow-on Public Offering, OneAdditional Paid-in Capital | Follow-on Public Offering, One | Follow-on Public Offering, TwoCommon Stock | Follow-on Public Offering, TwoAdditional Paid-in Capital | Follow-on Public Offering, Two | Series A Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 13 | $ 249,767 | $ (2) | $ (181,453) | $ 68,325 | ||||||||
Balance (in shares) at Dec. 31, 2018 | 13,137,061 | 7,307 | |||||||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||||||||
Stock-based compensation expense | 5,672 | 5,672 | |||||||||||
Exercise of stock options | 97 | 97 | |||||||||||
Exercise of stock options (in shares) | 20,005 | ||||||||||||
Issuance of common stock | $ 8 | 37,456 | 37,464 | ||||||||||
Issuance of common stock (in shares) | 8,050,000 | ||||||||||||
Issuance of common stock under equity distribution agreement | $ 1 | 2,129 | 2,130 | ||||||||||
Issuance of common stock under equity distribution agreement (in shares) | 423,072 | ||||||||||||
Forfeiture of restricted stock (in shares) | (5,050) | ||||||||||||
Unrealized gain (loss) on investments | $ 2 | 2 | |||||||||||
Net loss | (54,121) | (54,121) | |||||||||||
Balance at Dec. 31, 2019 | $ 22 | 295,121 | (235,574) | 59,569 | |||||||||
Balance (in shares) at Dec. 31, 2019 | 21,625,088 | 7,307 | |||||||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||||||||
Stock-based compensation expense | 7,642 | 7,642 | |||||||||||
Exercise of stock options | 1,020 | 1,020 | |||||||||||
Exercise of stock options (in shares) | 198,475 | ||||||||||||
Issuance of restricted stock (in shares) | 33,997 | ||||||||||||
Deemed dividend on beneficial conversion feature - Series A convertible preferred stock | 8,880 | (8,880) | |||||||||||
Issuance of common stock | $ 5 | $ 42,956 | $ 42,961 | $ 5 | $ 64,787 | $ 64,792 | |||||||
Issuance of common stock (in shares) | 4,600,000 | 5,000,000 | |||||||||||
Issuance of common stock under equity distribution agreement | 489 | 489 | |||||||||||
Issuance of common stock under equity distribution agreement (in shares) | 78,807 | ||||||||||||
Transfer of convertible preferred stock into permanent equity | $ 8,745 | 8,745 | |||||||||||
Transfer of convertible preferred stock into permanent equity (in shares) | 9,303 | ||||||||||||
Conversion of convertible preferred stock to common stock | $ (4,276) | $ 5 | 23,727 | $ 19,456 | |||||||||
Conversion of convertible preferred stock to common stock (in shares) | (4,550) | 5,049,400 | 25,247 | ||||||||||
Net loss | (67,475) | $ (67,475) | |||||||||||
Balance at Dec. 31, 2020 | $ 4,469 | $ 37 | $ 444,622 | $ (311,929) | $ 137,199 | ||||||||
Balance (in shares) at Dec. 31, 2020 | 4,753 | 36,585,767 | 7,307 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Price (in dollars per share) | $ 5 | |
Follow-on Public Offering, One | ||
Share Price (in dollars per share) | $ 10 | |
Stock issuance costs | $ 3,025 | $ 2,786 |
Follow-on Public Offering, Two | ||
Share Price (in dollars per share) | $ 14 | |
Stock issuance costs | $ 5,208 | |
2017 Equity Distribution Agreement | ||
Stock issuance costs | $ 161 | $ 95 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (67,475) | $ (54,121) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 334 | 278 |
Stock-based compensation expense | 7,642 | 5,672 |
Loss on disposal of fixed assets | 42 | |
Noncash lease expense | 264 | 225 |
Noncash lease liability | 362 | (131) |
Amortization of discount on investments | 3 | (8) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current and non-current assets and federal contract revenue receivables | (3,919) | (1,480) |
Accounts payable, accrued expenses and other long term-liabilities | 1,877 | 890 |
Net cash used in operating activities | (60,912) | (48,633) |
Cash flows from investing activities | ||
Maturities of short-term investments | 8,193 | 6,994 |
Purchases of short-term investments | (8,931) | (2,725) |
Purchases of property and equipment | (388) | |
Net cash (used in) provided by investing activities | (738) | 3,881 |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 1,020 | 97 |
Proceeds from equity offerings, net of offering costs | 108,196 | 67,871 |
Net cash provided by financing activities | 109,216 | 67,968 |
Net increase in cash and cash equivalents | 47,566 | 23,216 |
Cash and cash equivalents-beginning of year | 90,943 | 67,727 |
Cash and cash equivalents-end of year | 138,509 | 90,943 |
Supplemental disclosure of cash flow information | ||
Financing in accounts payable and accrued expenses | $ (148) | (195) |
Operating lease liability | 3,357 | |
Operating right-of-use asset | $ 2,458 |
Organization and Description of
Organization and Description of the Business | 12 Months Ended |
Dec. 31, 2020 | |
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 patients suffering from rare seizure disorders. Our clinical stage product candidate, ganaxolone, is a positive allosteric modulator of GABA A A In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus was declared a pandemic by the World Health Organization in March 2020 and has spread to nearly every country in the world, including the United States (U.S.). Efforts to contain the spread of COVID-19 have intensified and many countries, including the U.S., 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 redeploy staff, divert resources to patients suffering from COVID-19 and limit hospital access for non-patients. The pandemic poses the risk that we, our employees, contractors, suppliers, or other partners may be prevented from conducting normal business activities for an indefinite period of time, including those due to shutdowns that may be requested or mandated by governmental authorities. The continued global spread of COVID-19 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 year ended December 31, 2020. For example, several of our Phase 1 trials of oral ganaxolone to support the CDD indication have experienced delays in enrollment due to COVID-19, however we do not expect these trials to delay our ability to file an NDA. 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. However, COVID-19 may still adversely impact our clinical trials. For example, our Phase 3 clinical trial in RSE is conducted in the hospital and resources related to the COVID-19 outbreak may divert staffing in the hospital taking resources away from our clinical trial. Our ganaxolone clinical trials in the outpatient setting may be negatively impacted if patients and their caregivers do not want to participate in a clinical trial while COVID-19 outbreaks continue. Although operations have not been materially affected by the COVID-19 pandemic as of and for the year ended December 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 $67.5 million for the year ended December 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, if approved, and commercialization of our product candidates will require significant additional financing. Our accumulated deficit as of December 31, 2020 was $311.9 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, government funding, 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, if approved, commercialization of our product candidates. In September 2020, we entered into a contract (BARDA Contract) with the Biomedical Advanced Research and Development Authority (BARDA), a division of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response. Under the BARDA Contract, we receive d an award of up to an estimated $51 million for development of IV-administered ganaxolone for the treatment of refractory status epilepticus (RSE). The BARDA Contract provides for f unding to include support , on a cost-sharing basis , the completion of a Phase 3 clinical trial of IV-administered ganaxolone in patients with RSE (our Phase 3 clinical trial evaluating IV ganaxolone for the treatment of RSE (RAISE Trial)) , funding of pre-clinical studies to provide support that IV-administered ganaxolone could be an effective treatment for RSE due to chemical nerve gas agent exposure, and funding of certain manufacturing scale-up and regulatory activities. The BARDA Contract consists of an approximately two-year base period-during which BARDA will provide approximately $21 million of funding for the RAISE T rial on a cost share basis and funding of additional preclinical studies of ganaxolone in nerve agent exposure models. Following successful completion of the RAISE T rial and preclinical studies in the base period, the BARDA Contract provides for approximately $30 million of additional BARDA funding for three options in support of manufacturing, supply chain, clinical, regulatory and toxicology activities. Under the BARDA Contract, we will be responsible for cost sharing in the amount of approximately $33 million and BARDA will be responsible for approximately $51 million , if all development options are completed. The contract period-of-performance (base period plus option exercises) is up to approximately five years . In connection with the closing of an equity financing in December 2020, we issued a total of 5,000,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $64.9 million. In connection with the closing of an equity financing in June 2020, we issued a total of 4,600,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $42.9 million. In connection with the closing of concurrent equity financings during the fourth quarter of 2019, we issued a total of 8,050,000 shares of common stock in an underwritten public offering (2019 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 423,072 shares of common stock under our equity distribution agreement. Reverse stock split On September 23, 2020, we effected a 1 -for-4 reverse split of shares of our common stock (Reverse Split), as approved by our board of directors and stockholders. The par value per share of our common stock was not adjusted as a result of the Reverse Split, and our authorized shares of common stock was reduced to 150,000,000 . All of the share and per share amounts included in the accompanying financial statements and these notes have been adjusted to reflect the Reverse Split |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The financial statements include the accounts of Marinus Pharmaceuticals, Inc. (the Company) and its wholly-owned subsidiary as of December 31, 2019. During the year ended December 31, 2020, the wholly-owned subsidiary was liquidated. In February 2021, a new wholly-owned subsidiary was established. 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. Federal Contract Revenue We recognize federal contract revenue from the BARDA Contract in the period in which the allowable research and development expenses are incurred, and receivables associated with this revenue are included within federal contract revenue receivable on our balance sheets. This revenue is not within the scope of Accounting Standards Codification (ASC) 606 – Revenue from contracts with customers. Fair Value of Financial Instruments and Credit Risk At December 31, 2020 and 2019, our financial instruments included cash equivalents, short-term investments, accounts payable and accrued expenses. The carrying amount of cash equivalents, accounts payable and accrued expenses approximated fair value, given their short-term nature. The carrying amounts of short-term investments are recorded at amortized cost, which for U.S. Treasury securities is based on the current market price of each security at the measurement date. Cash equivalents and certificates of deposit subject us to concentrations of credit risk. However, we invest our cash in accordance with a policy objective that seeks to ensure both liquidity and safety of principal. The policy limits investments to instruments issued by the U.S. government, certain 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, 2020 and 2019, 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, 2020 and 2019, our investments consisted of certificates of deposit with various financial institutions, with original maturities ranging from six to nine months. All investments were classified as held-to-maturity and were recorded at amortized cost. Interest income includes interest and dividends, realized gains and losses on sales of securities, if any. Federal Contract Receivable Federal contract receivable represents amounts due to us under the BARDA contract for valid expenditures expected to be reimbursed to us under the terms of the BARDA contract. 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, five to fifteen years for laboratory equipment, and six years for leasehold improvements. 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 trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. At December 31, 2020 and 2019, 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, 2020 and 2019 (in thousands, except share and per share amounts): Year Ended December 31, 2020 2019 Basic and diluted net loss per share of common stock: Net loss $ (67,475) $ (54,121) Deemed Dividends (8,880) — Net loss applicable to common stockholders $ (76,355) $ (54,121) Weighted average shares of common stock outstanding 27,270,055 13,628,194 Net loss per share of common stock—basic and diluted $ (2.80) $ (3.97) The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive: December 31, 2020 2019 Convertible preferred stock 950,600 6,000,000 Restricted stock 24,625 8,100 Stock options 3,507,638 2,135,070 4,482,863 8,143,170 The convertible preferred stock meets the definition of a participating security; however, the holders are not obligated to share in our losses. As of December 31, 2020 and 2019, we had no other potentially dilutive 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 innovative therapeutics to treat rare seizure disorders. Stock-Based Compensation We account for stock-based compensation in accordance with the provisions of Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation Clinical Trial 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 trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. Our objective is to reflect the appropriate trial expenses in our financial statements by matching those expenses with the period in which services are performed and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates based on estimates of services received and efforts expended that take into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from its estimates. We make estimates of our accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. Our clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. For the years ended December 31, 2020 and 2019 there were no material adjustments to our prior period estimates of accrued expenses for clinical trials. Recent 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 held-to-maturity debt instruments as certificates of deposit, recorded at amortized cost. Interest income on these instruments is recorded as “Interest income” on the 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 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 year ended December 31, 2020 upon adoption of ASU No. 2016-13 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 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. As of December 31, 2020 and 2019, all of our financial assets and liabilities were classified as Level 1 valuations. 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, 2020 Assets Money market funds (cash equivalents) $ 138,509 $ — $ — $ 138,509 Certificates of deposit 1,474 — — 1,474 Total assets $ 139,983 $ — $ — $ 139,983 December 31, 2019 Assets Money market funds (cash equivalents) $ 85,395 $ — $ — $ 85,395 Certificates of deposit 739 — — 739 Total assets $ 86,134 $ — $ — $ 86,134 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Property and equipment consisted of the following (in thousands): December 31, December 31, 2020 2019 Laboratory equipment $ 1,777 $ 1,777 Leasehold improvements 899 899 Office furniture and equipment 401 401 Total property and equipment 3,077 3,077 Less: accumulated depreciation (1,132) (812) Total property and equipment, net $ 1,945 $ 2,265 Depreciation expense was $0.3 million and $0.2 million for the years ended December 31, 2020 and 2019, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, December 31, 2020 2019 Payroll and related costs $ 4,097 $ 2,514 Clinical trials and drug development 2,452 1,849 Professional fees 927 396 Short-term lease liabilities 510 446 Other 532 63 Total accrued expenses $ 8,518 $ 5,268 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 6. 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 December 31, 2020, our operating leases had a weighted average remaining lease term of 56 months . These right-of-use (ROU) assets are included in "Other assets" on our balance sheets as of December 31, 2020 and 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 balance sheets as of December 31, 2020 and 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 January 1, 2019 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. 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 as of January 1, 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 December 31, 2020 and 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 statements of operations and comprehensive loss. Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands): 2021 818 2022 807 2023 823 2024 840 Thereafter 642 3,930 Less: imputed interest (886) Total lease liabilities $ 3,044 Current operating lease liabilities $ 510 Non-current operating lease liabilities 2,534 Total lease liabilities $ 3,044 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments | |
Investments | 7. Investments As of December 31, 2020 and 2019, our investments consisted of certificates of deposit with various financial institutions with original maturities of six to nine months. Investments are classified as short- or long-term investments on our balance sheets based on original maturity. Certificates of deposits were classified as held-to-maturity and were recorded at amortized cost, which approximated fair value. We have never experienced a credit loss on the principal or interest receivable of our cash equivalents or short-term investments. Our certificates of deposit are each individually and fully insured by the FDIC. Accordingly, we did not record any allowance for potential credit losses as of December 31, 2020. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 42,492 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2005 Plan. 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, 2020, . In accordance with the 2014 Plan, on January 1, 2021, the shares of common stock available for future grants under the 2014 Plan was increased to 1,630,393. In addition, during the years ended December 31, 2020 and 2019, we granted 852,024 and 230,000 options, respectively, to purchase shares of common stock outside of our 2014 Plan as inducement grants 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, 2020 2019 Research and development $ 2,938 $ 2,563 General and administrative 4,521 3,070 Total $ 7,459 $ 5,633 Options issued under both the 2005 Plan and 2014 Weighted ‑ Average Aggregate Exercise Price Intrinsic Shares Per Share Value Outstanding—December 31, 2018 1,237,852 $ 22.48 Granted 1,175,750 9.24 Exercised (20,005) 4.88 Forfeited (229,051) 16.84 Expired (29,476) 32.92 Outstanding—December 31, 2019 2,135,070 15.80 Granted 1,905,850 9.17 Exercised (198,475) 5.16 Forfeited (180,107) 11.04 Expired (154,700) 25.16 Outstanding—December 31, 2020 3,507,638 $ 12.64 $ 11,600 Exercisable—December 31, 2020 1,632,823 $ 16.41 $ 4,625 Exercisable and expected to vest—December 31, 2020 3,507,638 $ 12.64 $ 11,600 The weighted average remaining contractual term of options outstanding and exercisable as of December 31, 2020 is 8.3 years. 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 2020 of $12.20 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 $11.64 and $7.60 per share in 2020 and 2019, respectively, and was estimated at the date of grant using the Black-Scholes option-pricing model with the following ranges of weighted-average assumptions: 2020 2019 Expected stock price volatility 116 - 121.71 % 104.7 - 118.87 % Expected term of options 5.26 - 6.1 years 5.16 - 6.1 years Risk‑free interest rate 0.31 - 1.73 % 1.51 - 2.59 % Expected annual dividend yield 0 % 0 % The weighted-average valuation assumptions were determined as follows: ● Expected stock price volatility: The expected volatility is based on historical volatility of our stock price. ● 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, 2020, there was $14.2 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: 2021 $ 6,478 2022 4,910 2023 1,837 2024 934 $ 14,159 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. A summary of activity for the years ended December 31, 2020 and 2019 is presented below: Weighted ‑ average Grant Date Shares Fair Value per Share Outstanding—December 31, 2018 26,300 $ 4.84 Vested (13,150) 4.84 Forfeited (5,050) 4.84 Outstanding—December 31, 2019 8,100 4.84 Granted 34,000 12.93 Vested (17,475) 10.04 Forfeited — — Outstanding—December 31, 2020 24,625 $ 11.41 Expected to vest—December 31, 2020 24,625 $ 11.41 As of December 31, 2020, there was $0.2 million in unrecognized compensation cost related to unvested restricted stock. Total compensation cost recognized for all restricted stock awards in the statements of operations for the years ended December 31, 2020 and 2019 is as follows (in thousands): Year Ended December 31, 2020 2019 Research and development $ — $ 19 General and administrative 183 20 Total $ 183 $ 39 Equity Distribution Agreement In October 2017, we entered into an Equity Distribution Agreement (Prior 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. During the year ended December 31, 2020, we issued 78,807 shares of our common stock pursuant to the Prior EDA for aggregate net proceeds of $0.5 million. During the year ended December 31, 2019, we issued 423,072 shares of our common stock pursuant to the Prior EDA for aggregate net proceeds to us of $2.1 million. On July 9, 2020, we entered into a new Equity Distribution Agreement (New EDA) with JMP to create an at the market equity program under which we from time to time may offer and sell shares of our common stock having an aggregate offering price of up to $60.0 million through or to JMP. Subject to the terms and conditions of the New EDA, JMP will use its commercially reasonable efforts to sell shares of our common stock from time to time, based upon our instructions. JMP will be entitled to a commission of up to 3.0% of the gross proceeds from each sale of shares of our common stock. The New EDA superseded and terminated the Prior EDA effective immediately upon effectiveness of our shelf registration statement on Form S-3 (File No. 333-239780) filed with the Securities and Exchange Commission on July 9, 2020 and declared effective by the Securities and Exchange Commission on July 27, 2020 . Public Offerings In connection with the closing of an equity financing in December 2020, we issued a total of 5,000,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $64.7 million . In connection with the closing of an equity financing in June 2020, we issued a total of 4,600,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $42.9 million. On December 11, 2019, the Company entered into an underwriting agreement with Oppenheimer & Co., Inc., as representative of the underwriters (Underwriting Agreement), in connection with the underwritten public offering of 7,000,000 shares of the Company’s common stock, par value $0.001 per share, at a price to the public of $5.00 per share (the “Public Offering”). Pursuant to the terms of the Underwriting Agreement, on December 13, 2019, the Company sold 8,050,000 shares of common stock, including the exercise of the option granted to the underwriters for 1,050,000 shares of common stock, and received net proceeds of $37.4 million, after deducting underwriting discounts and commissions and other transaction costs of $2.8 million |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 9. Convertible Preferred Stock Concurrent with the 2019 Public Offering, we entered into a Securities Purchase Agreement (the Purchase Agreement), by and among the Company and the investors listed therein. Pursuant to the terms of the Purchase Agreement, the Company sold to the investors an aggregate of 30,000 shares of Series A Participating Convertible Preferred Stock, par value $0.001 per share (the Series A Preferred Stock), at a per share price of $1,000 in a private placement (the Private Placement), and received net proceeds of $28.2 million, after deducting underwriting discounts and commissions of $1.8 million. Each share of Series A Preferred Stock will be convertible into 200 shares of common stock, reflecting a conversion price equal to $5.00 per share, subject to customary anti-dilution adjustments. The shares of Series A Preferred Stock will be mandatorily convertible into shares of common stock, subject to a beneficial ownership limitation (described below), in partial or in full, thereof from and after filing the certificate of amendment to the Company’s charter with the Secretary of State of the State of Delaware to increase the Company’s authorized shares of common stock (Exercise Contingency). The holders of the Series A Preferred Stock had a feature that allowed the holders to have a liquidation preference to the Company’s common stockholders. Because such a potential redemption-triggering event was not solely within the control of the Company, the Series A Preferred Stock was presented as "Convertible Preferred Stock" on our December 31, 2019 balance sheet in a manner consistent with temporary equity under applicable accounting standards. During the year ended December 31, 2020, 25,247 shares of our Series A Preferred Stock converted into 5,049,400 shares of our common stock, pursuant to the terms of the P urchase A greement. As of December 31, 2020, 4,753 shares of our Series A Preferred Stock remain ed outstanding, convertible into 950,600 shares of our common stock. In May 2020, a registration statement covering the resale of shares of our common stock underlying our Series A Preferred Stock was declared effective by the Securities and Exchange Commission (SEC). In accordance with the securities purchase agreements underlying the Series A Preferred Stock, the liquidation preference was terminated at that time, and we reclassified the Series A Preferred Stock into permanent equity The holders of the Series A Preferred Stock also have the right to receive discretionary dividends paid to common shareholders. Except as required by law, the Series A Preferred Stock is non-voting stock. The holders ownership limitation of 9.99% of total outstanding shares of common stock, including an option for the holder to increase this percentage to 19.99% . The difference between the conversion price and the fair value of the Company’s common stock on the commitment date (transaction date) resulted in a beneficial conversion feature the amount of $8.9 million. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies 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 sulfobutylether beta-cyclodextrin, 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, 2020, we had not met any additional milestones under the License Agreement and have not made any additional payments to CyDex other than the upfront fee; however, we achieved a milestone in the first quarter of 2021 with a payment now due. Certain patents relating to Captisol®, including some that were licensed to us by CyDex, have expired, while other patents that are licensed to us remain in force. 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. Severance Agreements In March 2021, we entered into a Severance Agreement and General Release (Severance Agreement) with Edward F. Smith, our Chief Financial Officer. In connection with this Severance Agreement, we agreed to pay certain severance benefits for nine months to Mr. Smith, including salary and benefits continuation and ongoing consulting services totaling approximately $0.5 million. In addition, certain of Mr. Smith’s outstanding stock option agreements were modified to accelerate vesting and extend the exercise period, resulting in additional compensation cost of approximately $0.1 million. We did not record any severance charges related to Mr. Smith through the year ended December 31, 2020. 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 December 31, 2019, $0.1 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. As of December 31, 2020, no amounts of severance remain unpaid to Cashman. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 11. Income Taxes On March 27, 2020, in response to COVID-19 and its detrimental impact to the global economy, then-President Trump signed The Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, which provides a stimulus to the U.S. economy in the form of various individual and business assistance programs as well as temporary changes to existing tax law. The changes to the provision in business tax laws include a five-year net operating loss carryback for the 2018, 2019 and 2020 tax years, a deferral of the employer’s portion of the social security tax, and an increase in the interest expense limitation under Section 163(j) from 30% to 50% for the 2019 and 2020 tax years, among other things. The CARES Act did not have a material impact on our income taxes, and we will continue to monitor for additional legislation related to COVID-19 and its impact on our results of operations. On December 21, 2020, Congress approved the Consolidated Appropriations Act, 2021 (Appropriations Act), which was signed into law by then-President Trump on December 27, 2020. The Appropriations Act funds the federal government to the end of the 2021 fiscal year and provides further COVID-19 economic relief. Some of the business provisions included in the Appropriations Act are additional Paycheck Protection Program (PPP) loans, clarification of the deductibility of business expenses that were paid for with PPP funds, expansion of the employee retention credit, and temporary full deduction for business expenses for food and beverages provided by a restaurant. The Appropriations Act did not have a material impact on our income taxes, and we will continue to monitor for additional legislation related to COVID-19 and its impact on our results of operations. Loss before income taxes is allocated as follows (in thousands): Year Ended December 31, 2020 2019 U.S. operations $ 67,475 $ 18,544 Foreign operations — 35,577 Loss before income taxes $ 67,475 $ 54,121 As of December 31, 2020 and 2019, we had approximately $212.0 million and $143.7 million, respectively, of net operating loss (NOL) carry forwards available to offset future federal and state taxable income that will expire beginning in 2023. As of December 31, 2020, we also have federal research and development credit carryovers of approximately $11.5 million and state credit carryovers of approximately $0.4 million, which expire beginning in 2023. 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, 2020 2019 Gross deferred tax assets: Net operating loss carryforwards $ 59,819 $ 40,120 Accrued expenses 218 200 Contributions 4 4 Depreciation 58 42 Stock‑based compensation 4,270 2,967 Research and development and other credits and other carryforwards 11,906 9,118 Capitalized research and development expenses 15,891 — Unrealized income 12 — Total gross deferred tax assets $ 92,178 $ 52,451 Gross deferred tax liabilities: Depreciation — — Total gross deferred tax liabilities — — Net deferred tax assets 92,178 52,451 Less: valuation allowance (92,178) (52,451) 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, 2020 and 2019. The valuation allowance increased by $39.7 million and $7.8 million during the years ended December 31, 2020 and 2019, respectively. The increase for the year ended December 31, 2020 was due primarily to our increase in net operating loss carryovers and an increase in tax attributes. The increase for the year ended December 31, 2019 was due primarily to our increase in net operating loss carryovers. We did not have unrecognized tax benefits as of December 31, 2020 and 2019, 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, 2020 and 2019. As of December 31, 2020 and 2019, we had 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, 2020 2019 Federal income tax expense at statutory rate 21.0 % 21.0 % Permanent items (0.7) (1.0) State income tax, net of federal benefit 7.6 2.3 R&D tax credits 4.7 4.4 Change in state apportionment — 1.1 Foreign income tax effect — (13.8) Capitalized research and development expenses 26.2 — Other — 0.5 Change in valuation allowance (58.8) (14.5) Effective income tax rate 0.0 % 0.0 % For all years through December 31, 2020, 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, 2017 through December 31, 2019. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of Marinus Pharmaceuticals, Inc. (the Company) and its wholly-owned subsidiary as of December 31, 2019. During the year ended December 31, 2020, the wholly-owned subsidiary was liquidated. In February 2021, a new wholly-owned subsidiary was established. 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. |
Federal Contract Revenue | Federal Contract Revenue We recognize federal contract revenue from the BARDA Contract in the period in which the allowable research and development expenses are incurred, and receivables associated with this revenue are included within federal contract revenue receivable on our balance sheets. This revenue is not within the scope of Accounting Standards Codification (ASC) 606 – Revenue from contracts with customers. |
Fair Value of Financial Instruments and Credit Risk | Fair Value of Financial Instruments and Credit Risk At December 31, 2020 and 2019, our financial instruments included cash equivalents, short-term investments, accounts payable and accrued expenses. The carrying amount of cash equivalents, accounts payable and accrued expenses approximated fair value, given their short-term nature. The carrying amounts of short-term investments are recorded at amortized cost, which for U.S. Treasury securities is based on the current market price of each security at the measurement date. Cash equivalents and certificates of deposit subject us to concentrations of credit risk. However, we invest our cash in accordance with a policy objective that seeks to ensure both liquidity and safety of principal. The policy limits investments to instruments issued by the U.S. government, certain 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, 2020 and 2019, 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, 2020 and 2019, our investments consisted of certificates of deposit with various financial institutions, with original maturities ranging from six to nine months. All investments were classified as held-to-maturity and were recorded at amortized cost. Interest income includes interest and dividends, realized gains and losses on sales of securities, if any. |
Federal Contract Receivable | Federal Contract Receivable Federal contract receivable represents amounts due to us under the BARDA contract for valid expenditures expected to be reimbursed to us under the terms of the BARDA contract. |
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, five to fifteen years for laboratory equipment, and six years for leasehold improvements. 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 trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. |
Income Taxes | Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. At December 31, 2020 and 2019, 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, 2020 and 2019 (in thousands, except share and per share amounts): Year Ended December 31, 2020 2019 Basic and diluted net loss per share of common stock: Net loss $ (67,475) $ (54,121) Deemed Dividends (8,880) — Net loss applicable to common stockholders $ (76,355) $ (54,121) Weighted average shares of common stock outstanding 27,270,055 13,628,194 Net loss per share of common stock—basic and diluted $ (2.80) $ (3.97) The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive: December 31, 2020 2019 Convertible preferred stock 950,600 6,000,000 Restricted stock 24,625 8,100 Stock options 3,507,638 2,135,070 4,482,863 8,143,170 The convertible preferred stock meets the definition of a participating security; however, the holders are not obligated to share in our losses. As of December 31, 2020 and 2019, we had no other potentially dilutive 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 innovative therapeutics to treat rare seizure disorders. |
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 |
Clinical Trial Expenses | Clinical Trial 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 trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. Our objective is to reflect the appropriate trial expenses in our financial statements by matching those expenses with the period in which services are performed and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates based on estimates of services received and efforts expended that take into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from its estimates. We make estimates of our accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. Our clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. For the years ended December 31, 2020 and 2019 there were no material adjustments to our prior period estimates of accrued expenses for clinical trials. |
Recent Accounting Pronouncements | Recent 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 held-to-maturity debt instruments as certificates of deposit, recorded at amortized cost. Interest income on these instruments is recorded as “Interest income” on the 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 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 year ended December 31, 2020 upon adoption of ASU No. 2016-13 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2020 and 2019 (in thousands, except share and per share amounts): Year Ended December 31, 2020 2019 Basic and diluted net loss per share of common stock: Net loss $ (67,475) $ (54,121) Deemed Dividends (8,880) — Net loss applicable to common stockholders $ (76,355) $ (54,121) Weighted average shares of common stock outstanding 27,270,055 13,628,194 Net loss per share of common stock—basic and diluted $ (2.80) $ (3.97) |
Schedule of antidilutive securities excluded from the computation of diluted weighted average shares outstanding | December 31, 2020 2019 Convertible preferred stock 950,600 6,000,000 Restricted stock 24,625 8,100 Stock options 3,507,638 2,135,070 4,482,863 8,143,170 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 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 December 31, 2020 Assets Money market funds (cash equivalents) $ 138,509 $ — $ — $ 138,509 Certificates of deposit 1,474 — — 1,474 Total assets $ 139,983 $ — $ — $ 139,983 December 31, 2019 Assets Money market funds (cash equivalents) $ 85,395 $ — $ — $ 85,395 Certificates of deposit 739 — — 739 Total assets $ 86,134 $ — $ — $ 86,134 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, December 31, 2020 2019 Laboratory equipment $ 1,777 $ 1,777 Leasehold improvements 899 899 Office furniture and equipment 401 401 Total property and equipment 3,077 3,077 Less: accumulated depreciation (1,132) (812) Total property and equipment, net $ 1,945 $ 2,265 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): December 31, December 31, 2020 2019 Payroll and related costs $ 4,097 $ 2,514 Clinical trials and drug development 2,452 1,849 Professional fees 927 396 Short-term lease liabilities 510 446 Other 532 63 Total accrued expenses $ 8,518 $ 5,268 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands): 2021 818 2022 807 2023 823 2024 840 Thereafter 642 3,930 Less: imputed interest (886) Total lease liabilities $ 3,044 Current operating lease liabilities $ 510 Non-current operating lease liabilities 2,534 Total lease liabilities $ 3,044 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of weighted-average assumptions estimated at the date of grant using the Black-Scholes option pricing model | 2020 2019 Expected stock price volatility 116 - 121.71 % 104.7 - 118.87 % Expected term of options 5.26 - 6.1 years 5.16 - 6.1 years Risk‑free interest rate 0.31 - 1.73 % 1.51 - 2.59 % Expected annual dividend yield 0 % 0 % |
Schedule of unrecognized compensation expense expected to be recognized in future years | 2021 $ 6,478 2022 4,910 2023 1,837 2024 934 $ 14,159 |
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, 2020 2019 Research and development $ 2,938 $ 2,563 General and administrative 4,521 3,070 Total $ 7,459 $ 5,633 |
Summary of activity for all options | Weighted ‑ Average Aggregate Exercise Price Intrinsic Shares Per Share Value Outstanding—December 31, 2018 1,237,852 $ 22.48 Granted 1,175,750 9.24 Exercised (20,005) 4.88 Forfeited (229,051) 16.84 Expired (29,476) 32.92 Outstanding—December 31, 2019 2,135,070 15.80 Granted 1,905,850 9.17 Exercised (198,475) 5.16 Forfeited (180,107) 11.04 Expired (154,700) 25.16 Outstanding—December 31, 2020 3,507,638 $ 12.64 $ 11,600 Exercisable—December 31, 2020 1,632,823 $ 16.41 $ 4,625 Exercisable and expected to vest—December 31, 2020 3,507,638 $ 12.64 $ 11,600 |
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 years ended December 31, 2020 and 2019 is as follows (in thousands): Year Ended December 31, 2020 2019 Research and development $ — $ 19 General and administrative 183 20 Total $ 183 $ 39 |
Summary of activity for all restricted stock | A summary of activity for the years ended December 31, 2020 and 2019 is presented below: Weighted ‑ average Grant Date Shares Fair Value per Share Outstanding—December 31, 2018 26,300 $ 4.84 Vested (13,150) 4.84 Forfeited (5,050) 4.84 Outstanding—December 31, 2019 8,100 4.84 Granted 34,000 12.93 Vested (17,475) 10.04 Forfeited — — Outstanding—December 31, 2020 24,625 $ 11.41 Expected to vest—December 31, 2020 24,625 $ 11.41 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Summary of loss before income taxes | Loss before income taxes is allocated as follows (in thousands): Year Ended December 31, 2020 2019 U.S. operations $ 67,475 $ 18,544 Foreign operations — 35,577 Loss before income taxes $ 67,475 $ 54,121 |
Schedule of components of the net deferred tax asset | The components of the net deferred tax asset are as follows (in thousands): December 31, 2020 2019 Gross deferred tax assets: Net operating loss carryforwards $ 59,819 $ 40,120 Accrued expenses 218 200 Contributions 4 4 Depreciation 58 42 Stock‑based compensation 4,270 2,967 Research and development and other credits and other carryforwards 11,906 9,118 Capitalized research and development expenses 15,891 — Unrealized income 12 — Total gross deferred tax assets $ 92,178 $ 52,451 Gross deferred tax liabilities: Depreciation — — Total gross deferred tax liabilities — — Net deferred tax assets 92,178 52,451 Less: valuation allowance (92,178) (52,451) 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, 2020 2019 Federal income tax expense at statutory rate 21.0 % 21.0 % Permanent items (0.7) (1.0) State income tax, net of federal benefit 7.6 2.3 R&D tax credits 4.7 4.4 Change in state apportionment — 1.1 Foreign income tax effect — (13.8) Capitalized research and development expenses 26.2 — Other — 0.5 Change in valuation allowance (58.8) (14.5) Effective income tax rate 0.0 % 0.0 % |
Organization and Description _2
Organization and Description of the Business (Details) $ in Thousands | Sep. 23, 2020shares | Dec. 31, 2020USD ($)shares | Jun. 30, 2020USD ($)shares | Dec. 31, 2020USD ($)shares | Jun. 30, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Sep. 30, 2020USD ($) |
Liquidity | |||||||||
Net loss | $ (67,475) | $ (54,121) | |||||||
Accumulated deficit | $ (311,929) | $ (311,929) | $ (235,574) | (311,929) | $ (235,574) | ||||
Net proceeds from issuance of common stock and preferred stock | $ 65,700 | ||||||||
Amount of funding to be provided during contract base period | $ 21,000 | $ 21,000 | $ 21,000 | ||||||
Reverse stock split ratio | 0.25 | ||||||||
Common stock, shares authorized | shares | 150,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | |||
BARDA Contract | |||||||||
Liquidity | |||||||||
Maximum amount to be awarded under the contract | $ 51,000 | ||||||||
Contract base period | 2 years | ||||||||
Amount of additional funding to be provided following successful completion of clinical trial and preclinical studies in base period | $ 30,000 | $ 30,000 | $ 30,000 | ||||||
Cost sharing, amount | 33,000 | 33,000 | 33,000 | ||||||
Cost sharing, BARDA amount | $ 51,000 | $ 51,000 | $ 51,000 | ||||||
Contract period-of-performance | 5 years | ||||||||
Public Offering | |||||||||
Liquidity | |||||||||
Issuance of common stock (in shares) | shares | 5,000,000 | 4,600,000 | |||||||
Proceeds from equity offerings, net of offering costs | $ 64,700 | $ 42,900 | |||||||
2017 Equity Distribution Agreement | |||||||||
Liquidity | |||||||||
Issuance of shares under equity distribution agreement (in shares) | shares | 423,072 | ||||||||
Net proceeds from issuance of common stock | $ 2,100 | ||||||||
Series A Convertible Preferred Stock | Private placement | |||||||||
Liquidity | |||||||||
Issuance of common stock (in shares) | shares | 30,000 | ||||||||
Issuance of Series A preferred stock (in shares) | shares | 30,000 | ||||||||
Common Stock | |||||||||
Liquidity | |||||||||
Issuance of common stock (in shares) | shares | 8,050,000 | ||||||||
Issuance of shares under equity distribution agreement (in shares) | shares | 78,807 | 423,072 | |||||||
Common Stock | Public Offering | |||||||||
Liquidity | |||||||||
Issuance of common stock (in shares) | shares | 5,000,000 | 4,600,000 | 8,050,000 | ||||||
Net proceeds from issuance of common stock | $ 64,900 | $ 42,900 | |||||||
Common Stock | 2017 Equity Distribution Agreement | |||||||||
Liquidity | |||||||||
Issuance of shares under equity distribution agreement (in shares) | shares | 78,807 | 423,072 | |||||||
Net proceeds from issuance of common stock | $ 500 | $ 2,100 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Computer equipment and software | |
Property and Equipment | |
Useful life | 3 years |
Office equipment and furniture | |
Property and Equipment | |
Useful life | 5 years |
Leasehold improvements | |
Property and Equipment | |
Useful life | 6 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 | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Basic and diluted net loss per share of common stock: | ||
Net loss | $ (67,475) | $ (54,121) |
Deemed dividends on convertible preferred stock | (8,880) | |
Net loss and comprehensive loss applicable to common shareholders | $ (76,355) | $ (54,121) |
Weighted average shares of common stock outstanding (in shares) | 27,270,055 | 13,628,194 |
Net loss per share of common stock-basic and diluted | $ (2.80) | $ (3.97) |
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 4,482,863 | 8,143,170 |
Convertible preferred 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) | 950,600 | 6,000,000 |
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) | 24,625 | 8,100 |
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) | 3,507,638 | 2,135,070 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Segment Information | |
Number of operating segments | 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Total assets | $ 139,983 | $ 86,134 |
Money market funds | ||
Assets | ||
Cash and cash equivalents, fair value | 138,509 | 85,395 |
Certificates of deposit | ||
Assets | ||
Investments | 1,474 | 739 |
Level 1 | ||
Assets | ||
Total assets | 139,983 | 86,134 |
Level 1 | Money market funds | ||
Assets | ||
Cash and cash equivalents, fair value | 138,509 | 85,395 |
Level 1 | Certificates of deposit | ||
Assets | ||
Investments | $ 1,474 | $ 739 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment | ||
Property and equipment, gross | $ 3,077 | $ 3,077 |
Less: accumulated depreciation | (1,132) | (812) |
Total property and equipment, net | 1,945 | 2,265 |
Depreciation expense | 300 | 200 |
Laboratory equipment | ||
Property and equipment | ||
Property and equipment, gross | 1,777 | 1,777 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 899 | 899 |
Office furniture and equipment | ||
Property and equipment | ||
Property and equipment, gross | $ 401 | $ 401 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Payroll and related costs | $ 4,097 | $ 2,514 |
Clinical trials and drug development | 2,452 | 1,849 |
Professional fees | 927 | 396 |
Short-term lease liabilities | 510 | 446 |
Other | 532 | 63 |
Total accrued expenses | $ 8,518 | $ 5,268 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Leases | |||
Weighted average remaining lease term | 56 months | ||
ROU adjustment for lease incentives | $ 900 | $ 900 | |
Right-of-use assets | 2,000 | 2,200 | $ 2,500 |
Operating lease liabilities | $ 3,044 | $ 3,500 | $ 3,400 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent | us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent | us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent |
Total lease costs | $ 600 | $ 700 | |
Weighted-average incremental borrowing rate used to determine right-of-use assets and lease liabilities | 11.00% | ||
Maturities of operating lease liabilities | |||
2021 | $ 818 | ||
2022 | 807 | ||
2023 | 823 | ||
2024 | 840 | ||
Thereafter | 642 | ||
Total lease payments | 3,930 | ||
Less: imputed interest | (886) | ||
Total lease liabilities | 3,044 | 3,500 | $ 3,400 |
Current operating lease liabilities | 510 | ||
Non-current operating lease liabilities | $ 2,534 | ||
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 |
Leases - Maturities (Details)
Leases - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
Maturities of operating lease liabilities | |||
2021 | $ 818 | ||
2022 | 807 | ||
2023 | 823 | ||
2024 | 840 | ||
Thereafter | 642 | ||
Total lease payments | 3,930 | ||
Less: imputed interest | (886) | ||
Total lease liabilities | $ 3,044 | $ 3,500 | $ 3,400 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent | us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent | us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent |
Current operating lease liabilities | $ 510 | ||
Non-current operating lease liabilities | $ 2,534 |
Stockholders' Equity - Incentiv
Stockholders' Equity - Incentive Plans (Details) - shares | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2021 | Dec. 31, 2018 | |
Stock options | ||||
Stock option and incentive plans | ||||
Granted (in shares) | 1,905,850 | 1,175,750 | ||
Outstanding (in shares) | 3,507,638 | 2,135,070 | 1,237,852 | |
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) | 42,492 | |||
2014 Plan | ||||
Stock option and incentive plans | ||||
Common stock reserved for issuance (in shares) | 167,254 | 1,630,393 | ||
2014 Plan | Stock options | ||||
Stock option and incentive plans | ||||
Outstanding (in shares) | 2,613,122 | |||
2014 Plan | Restricted stock | ||||
Stock option and incentive plans | ||||
Outstanding (in shares) | 24,625 | |||
Outside of 2014 Plan | Stock options | ||||
Stock option and incentive plans | ||||
Granted (in shares) | 852,024 | 230,000 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options and Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Additional Disclosures | ||
Market value per share | $ 5 | |
Stock options | ||
Stock option and incentive plans | ||
Total compensation cost | $ 7,459 | $ 5,633 |
Stock Options | ||
Outstanding at the beginning of the period (in shares) | 2,135,070 | 1,237,852 |
Granted (in shares) | 1,905,850 | 1,175,750 |
Exercised (in shares) | (198,475) | (20,005) |
Forfeited (in shares) | (180,107) | (229,051) |
Expired (in shares) | (154,700) | (29,476) |
Outstanding at the end of the period (in shares) | 3,507,638 | 2,135,070 |
Exercisable at the end of the period (in shares) | 1,632,823 | |
Exercisable and expected to vest at the end of the year (in shares) | 3,507,638 | |
Weighted-Average Exercise Price Per Share | ||
Outstanding at the beginning of the period (in dollars per share) | $ 15.80 | $ 22.48 |
Granted (in dollars per share) | 9.17 | 9.24 |
Exercised (in dollars per share) | 5.16 | 4.88 |
Forfeited (in dollars per share) | 11.04 | 16.84 |
Expired (in dollars per share) | 25.16 | 32.92 |
Outstanding at the end of the period (in dollars per share) | 12.64 | 15.80 |
Exercisable at the end of the period (in dollars per share) | 16.41 | |
Exercisable and expected to vest at the end of the year (in dollars per share) | $ 12.64 | |
Aggregate Intrinsic Value | ||
Outstanding at the end of the period | $ 11,600 | |
Exercisable at the end of the period | 4,625 | |
Exercisable and expected to vest at the end of the year | $ 11,600 | |
Additional Disclosures | ||
Weighted average remaining contractual term | 8 years 3 months 18 days | |
Market value per share | $ 12.20 | |
Weighted average grant date fair value (in dollars per share) | $ 11.64 | $ 7.60 |
Weighted-average assumptions | ||
Expected annual dividend yield (as a percent) | 0.00% | 0.00% |
Unrecognized compensation expense | ||
Unrecognized compensation expense | $ 14,159 | |
Stock options | Recognition in 2021 | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | 6,478 | |
Stock options | Recognition in 2022 | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | 4,910 | |
Stock options | Recognition in 2023 | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | 1,837 | |
Stock options | Recognition in 2023 | ||
Unrecognized compensation expense | ||
Unrecognized compensation expense | $ 934 | |
Stock options | Minimum | ||
Weighted-average assumptions | ||
Expected stock price volatility (as a percent) | 116.00% | 104.70% |
Expected term of options | 5 years 3 months 3 days | 5 years 1 month 28 days |
Risk-free interest rate (as a percent) | 0.31% | 1.51% |
Stock options | Maximum | ||
Stock option and incentive plans | ||
Vesting period | 4 years | |
Weighted-average assumptions | ||
Expected stock price volatility (as a percent) | 121.71% | 118.87% |
Expected term of options | 6 years 1 month 6 days | 6 years 1 month 6 days |
Risk-free interest rate (as a percent) | 1.73% | 2.59% |
Restricted stock | ||
Stock option and incentive plans | ||
Total compensation cost | $ 183 | $ 39 |
Vesting period | 1 year | |
Unrecognized compensation expense | ||
Unrecognized compensation cost | $ 200 | |
Shares | ||
Restricted stock units outstanding at the beginning of the period (in shares) | 8,100 | 26,300 |
Granted (in shares) | 34,000 | |
Vested (in shares) | (17,475) | (13,150) |
Forfeited (in shares) | (5,050) | |
Restricted stock units outstanding at the end of the period (in shares | 24,625 | 8,100 |
Weighted Average Grant Date Fair Value | ||
Restricted stock units outstanding at the beginning of the period (in dollars per shares) | $ 4.84 | $ 4.84 |
Granted (in dollars per share) | 12.93 | |
Vested (in dollars per share) | 10.04 | 4.84 |
Forfeited (in dollars per share) | 4.84 | |
Restricted stock units outstanding at the end of the period (in dollars per shares) | $ 11.41 | $ 4.84 |
2005 Plan | Stock options | ||
Stock Options | ||
Outstanding at the end of the period (in shares) | 42,492 | |
2005 Plan | Stock options | Maximum | ||
Stock option and incentive plans | ||
Contractual life | 10 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) | 2,613,122 | |
2014 Plan | Stock options | Maximum | ||
Stock option and incentive plans | ||
Contractual life | 10 years | |
Additional Disclosures | ||
Weighted average remaining contractual term exercisable | 10 years | |
2014 Plan | Restricted stock | ||
Stock Options | ||
Outstanding at the beginning of the period (in shares) | 24,625 | |
Outstanding at the end of the period (in shares) | 24,625 | |
Research and development | Stock options | ||
Stock option and incentive plans | ||
Total compensation cost | $ 2,938 | $ 2,563 |
Research and development | Restricted stock | ||
Stock option and incentive plans | ||
Total compensation cost | 19 | |
General and administrative | Stock options | ||
Stock option and incentive plans | ||
Total compensation cost | 4,521 | 3,070 |
General and administrative | Restricted stock | ||
Stock option and incentive plans | ||
Total compensation cost | $ 183 | $ 20 |
Stockholders' Equity - Equity D
Stockholders' Equity - Equity Distribution Agreement (Details) - USD ($) $ in Millions | Jul. 09, 2020 | Oct. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of shares under equity distribution agreement (in shares) | 78,807 | 423,072 | |||
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 under EDA | $ 50 | ||||
Issuance of shares under equity distribution agreement (in shares) | 423,072 | ||||
Net proceeds from issuance of common stock | $ 2.1 | ||||
2017 Equity Distribution Agreement | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of shares under equity distribution agreement (in shares) | 78,807 | 423,072 | |||
Net proceeds from issuance of common stock | $ 0.5 | $ 2.1 | |||
2020 Equity Distribution Agreement | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock an aggregate offering price | $ 60 | ||||
Sale of common stock, commission percentage | 3.00% |
Stockholders' Equity - Public O
Stockholders' Equity - Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 13, 2019 | Dec. 11, 2019 | Dec. 31, 2019 | Dec. 31, 2020 |
Public Offering | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Share Price (in dollars per share) | $ 5 | |||
Common Stock | ||||
Public Offering | ||||
Shares issued | 8,050,000 | |||
Public Offering | Common Stock | ||||
Public Offering | ||||
Public offering of common shares (in shares) | 7,000,000 | |||
Shares issued | 8,050,000 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Share Price (in dollars per share) | $ 5 | |||
Net proceeds from issuance of common stock | $ 37.4 | |||
Stock issuance costs | $ 2.8 | |||
Underwriter option | Common Stock | ||||
Public Offering | ||||
Shares issued | 1,050,000 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Convertible Preferred Stock | ||
Series A convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Share Price (in dollars per share) | $ / shares | $ 5 | |
Conversion of Stock, Shares Issued | 25,247 | |
Temporary Equity, Shares Outstanding | 30,000 | |
Common Stock | ||
Convertible Preferred Stock | ||
Conversion of Stock, Shares Issued | 5,049,400 | |
Series A Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Number of common shares issued for each convertible Series A preferred stock | 950,600 | |
Conversion of Stock, Shares Issued | (4,550) | |
Temporary Equity, Shares Outstanding | 4,753 | |
Series A Convertible Preferred Stock | Common Stock | ||
Convertible Preferred Stock | ||
Number of common shares issued for each convertible Series A preferred stock | 200 | |
Conversion price (in dollars per share) | $ / shares | $ 5 | |
Series A Convertible Preferred Stock | Minimum | ||
Convertible Preferred Stock | ||
Beneficial interest limitation | 9.99 | |
Series A Convertible Preferred Stock | Maximum | ||
Convertible Preferred Stock | ||
Beneficial interest limitation | 19.99 | |
Private placement | Series A Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Issuance of Series A preferred stock (in shares) | 30,000 | |
Series A convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Share Price (in dollars per share) | $ / shares | $ 1,000 | |
Net proceeds from issuance of Series A convertible preferred stock | $ | $ 28.2 | |
Underwriting discounts and commissions | $ | $ 1.8 | |
Beneficial conversion feature of the convertible preferred stock | $ | $ 8.9 |
Commitments and Contingencies -
Commitments and Contingencies - Employee Benefit Plan and License Agreements (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plan | |
Maximum employees contribution (as a percent) | 50.00% |
Vesting period | 4 years |
License Agreement | Purdue Neuroscience Company | |
License agreement | |
Expiration period of obligation to pay royalties | 10 years |
Commitments and Contingencies_2
Commitments and Contingencies - Employee and Severance Arrangements (Details) - USD ($) $ in Millions | Mar. 09, 2021 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Severance Agreement, Chief Financial Officer | ||||
Commitments and Contingencies | ||||
Salary and benefits continuation, commitment | $ 0.5 | |||
Accelerated vesting of stock option agreements | $ 0.1 | |||
Severance Arrangements, Chief Executive Officer | ||||
Commitments and Contingencies | ||||
Salary and benefits continuation, commitment | $ 0.6 | |||
Accelerated vesting of stock option agreements | $ 0.4 | |||
Unpaid benefits | $ 0 | $ 0.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loss before income taxes | ||
U.S. operations | $ 67,475 | $ 18,544 |
Foreign operations | 35,577 | |
Loss before income taxes | 67,475 | 54,121 |
Net operating loss carry forwards available to offset future federal and state taxable income | 212,000 | 143,700 |
Gross deferred tax assets: | ||
Net operating loss carryforwards | 59,819 | 40,120 |
Accrued expenses | 218 | 200 |
Contributions | 4 | 4 |
Depreciation | 58 | 42 |
Stock-based compensation | 4,270 | 2,967 |
Research and development and other credits and other carryforwards | 11,906 | 9,118 |
Capitalized research and development expenses | 15,891 | |
Unrealized income | 12 | |
Total gross deferred tax assets | 92,178 | 52,451 |
Gross deferred tax liabilities: | ||
Net deferred tax assets | 92,178 | 52,451 |
Less: valuation allowance | (92,178) | (52,451) |
Increase (decrease) in valuation allowance | $ 39,700 | $ 7,800 |
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% | 21.00% |
Permanent items (as a percent) | (0.70%) | (1.00%) |
State income tax, net of federal benefit (as a percent) | 7.60% | 2.30% |
R&D tax credits (as a percent) | 4.70% | 4.40% |
Change in state apportionment (as a percent) | 1.10% | |
Foreign income tax effect (as a percent) | (13.80%) | |
Capitalized research and development expenses (as a percent) | 26.20% | |
Other (as a percent) | 0.50% | |
Change in valuation allowance (as a percent) | (58.80%) | (14.50%) |
Effective income tax rate (as a percent) | 0.00% | 0.00% |
Research tax credit carryforward | Federal | ||
Loss before income taxes | ||
Tax credit carryovers | $ 11,500 | |
Research tax credit carryforward | State | ||
Loss before income taxes | ||
Tax credit carryovers | $ 400 |