Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Ocera Therapeutics, Inc. | ' |
Entity Central Index Key | '0001274644 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 15,247,845 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $21,691 | $2,303 |
Accounts receivable | 66 | 0 |
Investment credit receivable, current | 310 | 0 |
Prepaid and other current assets | 519 | 100 |
Current assets | 22,586 | 2,403 |
Property and equipment, net | 707 | 7 |
Investment credit receivable, net of current | 275 | 0 |
Intangible assets, net | 4,099 | 0 |
Goodwill | 917 | 0 |
Total assets | 28,584 | 2,410 |
Current liabilities: | ' | ' |
Accounts payable | 845 | 269 |
Accrued liabilities | 2,096 | 280 |
Convertible notes payable, net—related parties | 0 | 2,908 |
Total current liabilities | 2,941 | 3,457 |
Other liabilities | 5 | 0 |
Preferred stock warrant liability | 0 | 16 |
Long-term liabilities | 5 | 16 |
Total liabilities | 2,946 | 3,473 |
Commitments and contingencies (Note 11) | ' | ' |
Convertible preferred stock (Note 6) | 0 | 61,743 |
Stockholders’ equity / (deficit): | ' | ' |
Preferred Stock, $0.00001 par value; 5,000,000 shares authorized and no shares issued or outstanding at September 30, 2013 and no shares authorized, issued or outstanding at December 31, 2012, respectively. | 0 | 0 |
Common stock, $0.00001 par value, 100,000,000 shares authorized at September 30, 2013 and 11,291,073 shares issued and outstanding at September 30, 2013 Common stock, $0.001 par value, 53,270,000 shares authorized at December 31, 2012 and 626,593 shares issued and outstanding at December 31, 2012 | 0 | 5 |
Additional paid-in capital | 99,830 | 1,161 |
Accumulated other comprehensive income | 2 | 0 |
Deficit accumulated during the development stage | -74,194 | -63,972 |
Total stockholder's equity / (deficit) | 25,638 | -62,806 |
Total liabilities, convertible preferred stock and stockholders’ equity / (deficit) | $28,584 | $2,410 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 53,270,000 |
Common stock, shares issued | 11,291,073 | 626,593 |
Common stock, shares outstanding | 11,291,073 | 626,593 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | 105 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 |
Revenue | ' | ' | ' | ' | ' |
Licensing and other revenue | $200 | $0 | $200 | $0 | $200 |
Total Revenue | 200 | 0 | 200 | 0 | 200 |
Operating expenses: | ' | ' | ' | ' | ' |
Research and development | 1,854 | 426 | 2,288 | 1,346 | 53,301 |
General and administrative | 3,158 | 352 | 5,381 | 1,395 | 20,917 |
Amortization of intangibles | 265 | 0 | 265 | 0 | 265 |
Restructuring charges | 742 | 0 | 742 | 0 | 742 |
Impairment of intangibles | 1,576 | 0 | 1,576 | 0 | 1,576 |
Total operating expenses | 7,595 | 778 | 10,252 | 2,741 | 76,801 |
Other income (expense): | ' | ' | ' | ' | ' |
Interest and other income | 1 | 0 | 1 | 1 | 3,753 |
Interest and other expense | -13 | -44 | -186 | -87 | -1,417 |
Change in fair value of warrant liability | 3 | 2 | 15 | -55 | 71 |
Total other income (expense), net | -9 | -42 | -170 | -141 | 2,407 |
Net loss | -7,404 | -820 | -10,222 | -2,882 | -74,194 |
Net loss per share: | ' | ' | ' | ' | ' |
Net loss per share, basic and diluted | ($0.77) | ($1.31) | ($2.78) | ($4.60) | ' |
Weighted average number of shares used to compute net loss per share of common stock, basic and diluted | 9,669,320 | 626,953 | 3,683,156 | 626,953 | ' |
Net loss | -7,404 | -820 | -10,222 | -2,882 | -74,194 |
Foreign currency translation adjustment | 2 | 0 | 2 | 0 | 2 |
Comprehensive loss | ($7,402) | ($820) | ($10,220) | ($2,882) | ($74,192) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | 105 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
Operating activities | ' | ' | ' |
Net loss | ($10,222,000) | ($2,882,000) | ($74,194,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation | 56,000 | 16,000 | 433,000 |
Loss on disposal of fixed assets | 0 | 0 | 8,000 |
Amortization of intangibles | 265,000 | 0 | 265,000 |
Stock based compensation | 234,000 | 128,000 | 1,115,000 |
Change in valuation of warrant liability | -15,000 | 55,000 | -72,000 |
Impairment of intangible assets | 1,576,000 | 0 | 1,576,000 |
(Amortization of discount) accretion of premium on investment securities | 0 | 1,000 | -342,000 |
Debt discount, net and noncash interest expense | 186,000 | 87,000 | 504,000 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable and investment tax credits | -19,000 | 0 | -19,000 |
Prepaid expenses and other assets | -280,000 | -5,000 | -360,000 |
Accounts payable | -453,000 | -699,000 | -184,000 |
Accrued liabilities | 605,000 | -20,000 | 782,000 |
Net cash used in operating activities | -8,067,000 | -3,319,000 | -70,488,000 |
Investing activities | ' | ' | ' |
Purchases of property and equipment | -6,000 | -2,000 | -398,000 |
Payments to Acquire Short-term Investments | 0 | 0 | -142,044,000 |
Sale and maturities of short-term investments | 0 | 250,000 | 142,386,000 |
Cash received from merger transaction | 7,465,000 | 0 | 7,465,000 |
Net cash provided by investing activities | 7,459,000 | 248,000 | 7,409,000 |
Financing activities | ' | ' | ' |
Proceeds from sale of convertible preferred stock | 0 | 0 | 60,744,000 |
Proceeds from the sale of common stock, net | 19,973,000 | 0 | 19,973,000 |
Proceeds from issuance of convertible notes payable, net | 0 | 1,513,000 | 2,940,000 |
Proceeds from note payable | 0 | 0 | 4,000,000 |
Repayments of note payable | 0 | 0 | -4,000,000 |
Proceeds from issuance of promissory note | 0 | 0 | 1,000,000 |
Proceeds from issuance of common stock | 23,000 | 0 | 113,000 |
Net cash provided by financing activities | 19,996,000 | 1,513,000 | 84,770,000 |
Net increase (decrease) in cash and cash equivalents | 19,388,000 | -1,558,000 | 21,691,000 |
Cash and cash equivalents—beginning of period | 2,303,000 | 3,114,000 | 0 |
Cash and cash equivalents—end of period | 21,691,000 | 1,556,000 | 21,691,000 |
Supplemental schedule of noncash investing and financing activities | ' | ' | ' |
Warrants issued in connection with notes payable | 0 | 32,000 | 143,000 |
Reclassification of warrant liability to additional paid-in-capital | 1,000 | 93,000 | 94,000 |
Issuance of options related to consulting agreement | 0 | 7,000 | 13,000 |
Cash paid for interest | 0 | 0 | 861,000 |
Conversion of convertible promissory note and interest to common stock | 3,187,000 | 0 | 4,233,000 |
Conversion of convertible preferred stock to common stock | 61,743,000 | 0 | 61,743,000 |
Common stock issued in connection with merger transaction | $13,524 | $0 | $13,524 |
The_Company
The Company | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
The Company | ' |
The Company | |
Ocera Therapeutics, Inc. (the "Company") is a clinical stage biopharmaceutical company focused on the development and commercialization of OCR-002 (ornithine phenylacetate). OCR-002 is an ammonia scavenger which has been granted Orphan Disease and Fast Track status from the FDA to treat hyperammonemia and associated hepatic encephalopathy in patients with liver cirrhosis, acute liver failure and acute liver injury. | |
As of December 31, 2012 and September 30, 2013, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure, and has not realized significant revenues. Accordingly, the Company is considered to be in the development stage. | |
On July 15, 2013, Terrapin Acquisition, Inc., a Delaware corporation (“Merger Sub”), a wholly owned subsidiary of Tranzyme, Inc., a Delaware corporation (“Tranzyme”), completed its merger (the “Merger”) with and into Ocera Therapeutics, Inc., a private Delaware corporation (“Private Ocera”). Private Ocera is considered the acquiring company for accounting purposes as upon completion of the Merger, Private Ocera's former stockholders held a majority of the voting interest of the combined company. In addition, six of the nine members of the board of directors of the combined company are former members of the Private Ocera board of directors. Therefore, the former members of the Private Ocera board of directors possess majority control of the board of directors of the combined company. The Merger was effected pursuant to an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of April 23, 2013, by and among Tranzyme, Private Ocera and Merger Sub. In connection with the Merger, the combined company changed its name to Ocera Therapeutics, Inc. and the name of Private Ocera was changed to Ocera Subsidiary, Inc. | |
Pursuant to the Merger, Private Ocera’s convertible notes payable plus accrued interest were converted to Series C convertible preferred stock at a rate of $2.04858 per share and immediately thereafter, Private Ocera’s Series A, Series B and Series C convertible preferred stock were converted into Private Ocera common stock on a share for share basis and all such Private Ocera common stock was exchanged for Tranzyme common stock at a rate of one Private Ocera share for 0.11969414 Tranzyme shares (the "Exchange Ratio"). All share and per share amounts for all periods presented in these consolidated financial statements have been adjusted retroactively to reflect the exchange for Tranzyme shares. In addition, convertible preferred stock warrants of Private Ocera were converted into common stock warrants of Tranzyme, pursuant to the Merger, based upon the Exchange Ratio. | |
The Company's business is subject to significant risks consistent with biopharmaceutical companies seeking to develop technologies and product candidates for human therapeutic use. These risks include, but are not limited to, uncertainties regarding research and development, access to capital, obtaining and enforcing patents, receiving regulatory approval and competition with other biotechnology and pharmaceutical companies. | |
As of September 30, 2013, the Company has incurred losses since inception of $74.2 million. The Company expects to continue to incur losses and requires additional financial resources to advance its products to either commercial stage or liquidity events. | |
Basis of Presentation | |
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions to Form 10-Q and do not include all of the information and footnotes required for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results for the interim periods have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results for the year ending December 31, 2013 or future periods. The accompanying financial statements should be read in conjunction with the Company’s audited financial statements and related notes included in Exhibit 99.2 to the Company's Current Report on Form 8-K/A filed on September 27, 2013 and available on the website of the United States Securities and Exchange Commission (www.sec.gov). The accompanying balance sheet as of December 31, 2012 has been derived from the audited balance sheet as of that date included in the Form 8-K/A. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||
Summary of Significant Accounting Policies | |||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||||||
Principles of Consolidation | |||||||||||||
The consolidated financial statements include the accounts of Ocera Therapeutics, Inc, and its subsidiaries, Ocera Subsidiary, Inc. and Tranzyme Pharma Inc. ("Tranzyme Pharma"). All significant intercompany balances and transactions have been eliminated. All amounts included in these notes to consolidated financial statements are reported in U.S. dollars, unless otherwise indicated. | |||||||||||||
Unaudited Interim Financial Information | |||||||||||||
The accompanying interim balance sheet as of September 30, 2013 and the statements of operations and comprehensive loss for the three and nine months ended September 30, 2013 and 2012 and the period from December 20, 2004 (inception) to September 30, 2013, and the statements of cash flows for the nine months ended September 30, 2013 and 2012 and period from December 20, 2004 (inception) to September 30, 2013, and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with GAAP. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2013 and its results of operations and comprehensive loss for the three and nine months ended September 30, 2013 and 2012 and the period from December 20, 2004 (inception) to September 30, 2013, and its cash flows for the nine months ended June 30, 2013 and 2012 and the period from December 20, 2004 (inception) to September 30, 2013. The results for the nine months ended September 30, 2013 are not necessarily indicative of the results expected for the full fiscal year or any other interim period. | |||||||||||||
Segment Reporting | |||||||||||||
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment operating in the United States and Canada. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents are stated at cost, which approximates fair value. The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents include money market funds and various deposit accounts. | |||||||||||||
Investment Tax Credits Receivable | |||||||||||||
The Company participates in government assistance programs in Quebec, Canada that provide refundable investment tax credits for certain research and development expenditures. The receivable represents management’s estimate of amounts expected to be recovered and is subject to adjustment based upon audit by Canadian taxation authorities. The Company reported investment tax credits receivable of $585,000 as of September 30, 2013. | |||||||||||||
Business Combinations | |||||||||||||
The Company accounted for the merger with Tranzyme as a reverse merger under the acquisition method of accounting. The consideration paid to acquire Tranzyme was measured at fair value and included the exchange of our common stock and assumption of vested stock options. This allocation of the purchase price resulted in recognition of intangible assets related to customer relationships and developed technology and goodwill. The allocation of purchase price requires the Company to make significant estimates and assumptions. The key assumptions in determining the fair value of intangible assets were the discount rate and the probability assigned to the milestone or royalty being achieved. Changes in the fair value may result from either the passage of time or events occurring after the acquisition date, such as changes in the estimate of the probability of achieving the milestone or royalty. | |||||||||||||
Intangible Assets and Goodwill | |||||||||||||
The Company recorded intangible assets and goodwill upon the acquisition of Tranzyme on July 15, 2013. Acquired intangible assets are amortized on a straight-line basis over the remaining estimated economic life of 2.5 to 5 years. The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of an asset is measured by comparing its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that the carrying amount is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset exceeds its fair value. | |||||||||||||
The Company performs an annual qualitative assessment of its goodwill to determine if any events or circumstances exist, such as an adverse change in business climate or adverse developmental or regulatory results of OCR-002, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. The determination of fair value requires significant judgment and estimates. For the purpose of impairment testing, the Company has determined that it has one reporting unit. There has been no impairment of goodwill for any periods presented. | |||||||||||||
Foreign Currency Translation | |||||||||||||
The Company's consolidated financial statements are presented in U.S. dollars. The financial statements of Tranzyme Pharma are re-measured from the local currency to U.S. dollars, as follows: monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date and non-monetary items at exchange rates in effect when the assets were acquired or non-monetary liabilities incurred. Revenue and expenses are translated at the average exchange rates prevailing during the period of the transaction. The gains and losses resulting from the translation of foreign currency financial statements into U.S. dollars are reported in accumulated other comprehensive income (loss). | |||||||||||||
Revenue Recognition | |||||||||||||
The Company recognizes revenue when it is realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: (a) persuasive evidence of an arrangement exists; (b) delivery has occurred or services have been rendered; (c) the Company’s price to the buyer is fixed or determinable; and (d) collectability is reasonably assured. | |||||||||||||
Research and Development Expenses | |||||||||||||
Research and development costs are expensed as incurred and primarily consist of license fees, salaries and related employee benefits, costs associated with clinical trials, manufacturing control, quality assurance, medical affairs and regulatory activities. The Company uses external service providers and vendors to conduct clinical trials and to provide various other research and development and manufacturing related products and services. | |||||||||||||
Preferred Stock Warrant Liability | |||||||||||||
Certain warrants to purchase the Company’s capital stock have historically been classified as liabilities and are recorded at estimated fair value. At each reporting period, any change in fair value of the freestanding warrants is recorded as other (expense) income. As a result of the Merger, the fair value of the preferred stock warrant liability was reclassified to additional paid in capital upon the conversion of warrants to purchase preferred stock into warrants to purchase common stock. | |||||||||||||
Stock Based Compensation | |||||||||||||
Share-based awards, including stock options, are recorded at their fair value as of the grant date and recognized to expense on a straight-line basis over the employee’s requisite service period, which is generally the vesting period of the award. Share-based compensation expense is based on awards ultimately expected to vest, and therefore the recorded expense includes an estimate of future forfeitures. Forfeitures are to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The measurement of nonemployee share-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period over which services are received. The Company estimates the fair value of share-based awards to employees, directors and non-employees using the Black-Scholes option-valuation model. The Black-Scholes model requires the input of subjective assumptions, including volatility, the expected term and the fair value of the underlying common stock on the date of grant, among other inputs. | |||||||||||||
Prior to the Merger the company granted stock options to purchase common stock to employees with exercise prices equal to the value of the underlying stock, as determined by the board of directors on the date the equity award was granted. The board of directors determined the fair value of the underlying common stock by considering a number of factors, including historical and projected financial results, the risks the Company faced at the time, the preferences of the Company’s preferred stockholders and the lack of liquidity of the Company’s common stock. | |||||||||||||
Income Taxes | |||||||||||||
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities reflect the future tax consequences of the differences between the financial reporting and tax basis of assets and liabilities using current enacted tax rates. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. | |||||||||||||
The Company’s policy related to accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attributed criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. | |||||||||||||
Net Loss Per Share | |||||||||||||
Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities which include convertible preferred stock, warrants, convertible notes payable and outstanding stock options under the stock option plan have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. All share and per share amounts for all periods presented in the following table have been adjusted retroactively to reflect the exchange for Tranzyme, Inc shares as of the date of the Merger. | |||||||||||||
The following table presents the computation of net loss per share (in thousands, except share and per share data): | |||||||||||||
Three Months | Nine Months | ||||||||||||
Ended September 30, | Ended September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Numerator | |||||||||||||
Net loss | $ | (7,404 | ) | $ | (820 | ) | $ | (10,222 | ) | $ | (2,882 | ) | |
Denominator | |||||||||||||
Weighted average common shares outstanding used to compute net loss per share, basic and diluted | 9,669,320 | 626,953 | 3,683,156 | 626,953 | |||||||||
Net loss per share, basic and diluted | $ | (0.77 | ) | $ | (1.31 | ) | $ | (2.78 | ) | $ | (4.60 | ) | |
Potentially dilutive securities are not included in the calculation of dilutive net loss per share because to do so would be anti-dilutive are as follows (in common equivalent shares on a weighted-average basis): | |||||||||||||
Three Months ended | Nine Months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Convertible preferred stock | 736,570 | 4,840,324 | 3,472,405 | 4,840,324 | |||||||||
Convertible preferred stock warrants | 2,003 | 26,332 | 14,902 | 26,332 | |||||||||
Common stock warrants | 158,939 | 65,731 | 140,722 | 31,011 | |||||||||
Common stock options | 633,163 | 706,497 | 573,789 | 665,719 | |||||||||
Total | 1,530,675 | 5,638,884 | 4,201,818 | 5,563,386 | |||||||||
In addition to the potentially dilutive securities noted above, the Company had outstanding convertible notes payable and accrued interest that were converted into 186,217 shares of common stock upon completion of the Merger. The Company has excluded these convertible notes payable from the table above. | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||
Occasionally, new accounting standards are issued or proposed by the Financial Accounting Standards Board (the | |||||||||||||
"FASB"), or other standards-setting bodies that Ocera adopts by the effective date specified within the standard. Unless | |||||||||||||
otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on | |||||||||||||
Ocera financial statements upon adoption. | |||||||||||||
In February 2013, the FASB issued a final rule related to the reporting of amounts reclassified out of accumulated | |||||||||||||
other comprehensive income that requires entities to report, either on their income statement or in a footnote to their financial statements, the effects on earnings from items that are reclassified out of other comprehensive income. The new accounting rules was effective for Ocera in the first quarter of 2013. The adoption of the new accounting rules did not have a material effect on Ocera's financial condition, results of operations or cash flows. Ocera chose to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in a single continuous statement of operations and comprehensive income. | |||||||||||||
In July 2013, the FASB issued Accounting Standards Update, or ASU, No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. The Company intends to adopt this guidance at the beginning of our first quarter of fiscal year 2014, and does not expect the adoption of this standard will have a material impact on the Company’s financial statements. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Fair Value Measurements | ' | ||||||||||||
Fair Value Measurements | |||||||||||||
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. As a basis for categorizing inputs, the Company uses a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value from market based assumptions to entity specific assumptions: | |||||||||||||
Level 1: Observable inputs such as quoted prices in active markets; | |||||||||||||
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |||||||||||||
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |||||||||||||
The Company’s Level 3 financial liabilities consist of warrant liabilities related to warrants to purchase preferred stock. On July 15, 2013, warrants to purchase convertible preferred stock were converted to warrants to purchase common stock eliminating the terms that caused the preferred stock warrants to be accounted for as a liability. | |||||||||||||
Assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 are as follows (in thousands): | |||||||||||||
Balance as of | Quoted Prices | Significant | Significant | ||||||||||
September 30, | in Active | Other | Unobservable | ||||||||||
2013 | Markets for | Observable | Inputs | ||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets | |||||||||||||
Money market funds | $ | 18,437 | $ | 18,437 | $ | — | $ | — | |||||
Total assets | $ | 18,437 | $ | 18,437 | $ | — | $ | — | |||||
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 are as follows (in thousands): | |||||||||||||
Balance as of | Quoted Prices | Significant | Significant | ||||||||||
December 31, | in Active | Other | Unobservable | ||||||||||
2012 | Markets for | Observable | Inputs | ||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets | |||||||||||||
Money market funds | $ | 1,437 | $ | 1,437 | $ | — | $ | — | |||||
Total assets | $ | 1,437 | $ | 1,437 | $ | — | $ | — | |||||
Liabilities | |||||||||||||
Preferred stock warrant liability (1) | $ | 16 | $ | — | $ | — | $ | 16 | |||||
Total liabilities | $ | 16 | $ | — | $ | — | $ | 16 | |||||
(1) The Company estimated fair value of its preferred stock warrant liability at issuance and adjusts the carrying value | |||||||||||||
each reporting period utilizing the model based on the following significant unobservable inputs: risk-free rate of 0.08% and 0.13%; the expected dividend rates of 0%; the remaining expected life of the warrants 0.3 and 0.8 years; the expected volatility of 79% and 91% of the fair value of the underlying preferred stock. The estimates are based on subjective assumptions that could differ in the future. | |||||||||||||
The following table provides the change in the fair value of Level 3 liabilities for the nine months ended September 30, 2013 (in thousands): | |||||||||||||
Convertible | |||||||||||||
Preferred Stock | |||||||||||||
Warrant Liability | |||||||||||||
Balance at December 31, 2012 | $ | (16 | ) | ||||||||||
Change in fair value of warrant liability (unaudited) | (15 | ) | |||||||||||
Conversion of preferred stock warrants into common stock warrants (unaudited) | (1 | ) | |||||||||||
Balance at September 30, 2013 (unaudited) | $ | — | |||||||||||
Convertible_Notes_Payable
Convertible Notes Payable | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Debt Disclosure [Abstract] | ' | |||||
Convertible Notes Payable | ' | |||||
Convertible Notes Payable | ||||||
In March 2012, the Company entered into a convertible note and warrant purchase agreement with existing investors. The Company issued an aggregate principal amount of $1.5 million of convertible notes in an initial closing in March 2012 (the "March 2012 Notes"). The March 2012 Notes had an interest rate of 6% per annum and have a maturity date of the earlier of (i) March 30, 2013, (ii) a change of control, or (iii) an event of default. The notes could not be prepaid without the prior written consent of the holders of at least 67% of the principal amount outstanding under all notes issued. | ||||||
In connection with the March 2012 Notes, the lenders received warrants for the purchase of the Company’s common stock equal to (i) 30% of the principal amount of the lender’s note divided by the lower of the price of the Series C convertible preferred stock or the equity security sold in a qualified or nonqualified financing had the Company entered into certain strategic transactions, referred to as the "Special Condition", by June 2012 or (ii) 75% of the principal amount of the lender’s note divided by the lower of the Series C convertible preferred stock or the equity sold in a qualified or nonqualified financing if the Special Condition was not met. Accordingly, the lenders received warrants to purchase an aggregate of 26,292 shares of the Company’s common stock on March 30, 2012. Upon the expiration of the anti-dilution protection of the March 2012 notes payable on June 30, 2012, the Company issued an additional 39,439 common stock warrants. The March warrants have a seven year term expiring on March 30, 2019. | ||||||
In October 2012, the Company issued an aggregate amount of $1.5 million of convertible notes in a second closing with existing investors (the "October 2012 Notes"). The October 2012 Notes had an interest rate of 6% per annum and had a maturity date of the earlier of (i) October 1, 2013, (ii) a change of control, or (iii) an event of default. The notes converted under the same terms as the March 2012 Notes but were based on the October 1, 2013, maturity date. The notes could not be prepaid without the prior written consent of the holders of at least 67% of the principal amount outstanding under all notes issued. In connection with the October 2012 Notes, the lenders received warrants to purchase 65,731 shares of the Company’s common stock. The October Notes had a seven-year term set to expire on October 1, 2019. | ||||||
The common warrants issued in connection with the March 2012 Notes and October 2012 Notes are immediately exercisable at $0.67 per share. | ||||||
In March 2013, the Company amended the March 2012 Notes to extend the maturity date to October 1, 2013. In April 2013, the March and October 2012 Notes were amended to change the note conversion date to automatically convert the unpaid principal and interest at the time of the Merger into shares of the Series C Preferred Stock of Private Ocera at the Series C Conversion Price of $2.04858 per share. There was no consideration paid, given or committed to the note holders by the Company in exchange for the modifications. The debt modification was evaluated under ASC 470-60, Trouble Debt Restructuring and under ASC 470-55, Debt Modification and Extinguishments. The Company determined that it was appropriate to account for the term extension and change to the conversion date on a prospective basis and the carrying amount of the debt remained unchanged. All costs incurred with third parties directly related to the maturity extension were expensed as incurred. There were no costs associated with the change to the note conversion date. | ||||||
On July 15, 2013, the March and October 2012 Notes plus accrued interest of $187,000 were converted into 186,217 shares of common stock in connection with the Merger. | ||||||
The Company recorded an aggregate of $184,000 and $186,000 of non-cash interest expense and amortization of debt discount related to the convertible notes payable for the year ended December 31, 2012 and the nine months ended September 30, 2013. | ||||||
Warrants | ||||||
Convertible Preferred Stock Warrants | ||||||
In March 2006, the Company entered into a $4.0 million loan and security agreement with a lender to provide capital to the Company. The loan balance was fully repaid in November 2009. As consideration for the loan and security agreement, the lender received warrants to purchase 26,332 shares of Series A preferred stock of Private Ocera at $8.35 per share. The warrants are immediately exercisable with seven-year terms expiring on April 24, 2013 and November 1, 2013. On April 24, 2013, warrants for the purchase of 13,166 shares of Series A preferred stock of Private Ocera expired. On July 15, 2013, warrants for the purchase of 13,166 shares of Series A preferred stock were converted into warrants to purchase common stock of the Company in connection with the Merger. | ||||||
Common Stock Warrants | ||||||
The fair value of the March 2012 common stock warrants was determined to be $32,000 upon issuance. The fair value was recorded as a debt discount and amortized to interest expense using the effective interest method over the term of the March 2012 Notes. | ||||||
The Company concluded that the March 2012 warrants were a derivative instrument as a result of anti-dilution protection included within the instrument. The March 2012 warrants were required to be recorded at fair value upon issuance and re-measured at each reporting period. The fair value of the warrant liability in the amount of $61,000 was recorded in the statement of operations and comprehensive loss. Upon the expiration of the anti-dilution protection in June 2012, the Company reclassified the fair value of $93,000 to additional paid-in capital. | ||||||
The relative fair value of the October 2012 common stock warrants as of the date of issuance was determined to be $111,000, which was recorded as a debt discount and amortized to interest expense using the effective interest method over the term of the October 2012 Notes. | ||||||
The Company accounts for the October 2012 common stock warrants based on their relative fair value as compared to the convertible notes payable and recorded them as equity on the date of issuance. Because the October 2012 common stock warrants meet the requirements for equity classification, the Company is not required to re-measure the fair value of the warrants subsequent to the date of issuance. | ||||||
On July 15, 2013, warrants to purchase 19,243 shares of common stock of Tranzyme became warrants to purchase common stock of the Company in connection with the merger. | ||||||
The following table summarizes the outstanding common stock warrants and the corresponding exercise price as of September 30, 2013: | ||||||
Number of Shares | Per-Share | |||||
Outstanding at | Exercise | |||||
Issuance Date | 30-Sep-13 | Price | Expiration | |||
11/1/06 | 13,166 | $ | 8.35 | 11/1/13 | ||
12/3/08 | 2,380 | 84 | 12/3/15 | |||
9/30/10 | 3,240 | 160.44 | 4/6/15 | |||
1/31/12 | 13,623 | 44.04 | 1/31/22 | |||
3/30/12 | 26,292 | 0.67 | 3/30/19 | |||
6/30/12 | 39,439 | 0.67 | 6/30/19 | |||
10/1/12 | 65,731 | 0.67 | 10/1/19 | |||
Total | 163,871 | |||||
On November 1, 2013, the Company had 13,166 commons stock warrants expire. |
License_Agreements_and_Acquire
License Agreements and Acquired Development and Commericialization Rights | 9 Months Ended |
Sep. 30, 2013 | |
Strategic Collaboration and License Agreements [Abstract] | ' |
Strategic Collaboration and License Agreements | ' |
License Agreements and Acquired Development and Commercialization Rights | |
Kuereha Corporation | |
In July 2004, the Company in-licensed from Kureha Corporation ("Kureha") the technology and exclusive development and commercialization rights to its AST-120 product candidate for the treatment of liver and gastrointestinal disease for the territories of North America and Europe. The Company paid a $1.5 million up-front fee to Kureha. In March 2008, the Company amended the license agreement, in exchange for a payment of $0.5 million. Kureha will receive a fixed percentage of any payment that the Company may receive for sublicensed rights in the countries associated with the expanded territory. Under these agreements, the Company may also be required to make future milestone payments upon the achievement of various milestones related to regulatory or commercial events for its first indications in gastrointestinal diseases. The Company may also be obligated to pay a royalty in the low to high single digits on net sales. In April 2012, the Company amended the license agreement to include the development and commercialization of AST-120 as a medical device for IBS in European countries. Under this amended agreement, the Company may be required to make milestone payments based on future commercial milestones and net sales. | |
UCL Business PLC | |
In December 2008, the Company entered into a license agreement with University College of London Business PLC for worldwide rights to develop and commercialize OCR-002 and related technologies for any use. The agreement was amended on July 2011 and February 2013. As consideration for the license, the Company paid a $1.0 million up-front fee and may be required to make future milestone payments totaling up to $17.0 million upon the achievement of various milestones related to regulatory or commercial events. The Company may be obligated to pay a royalty in the low to mid-single digits based on the net sales of OCR-002. | |
Open Biosystems, Inc. | |
In October 2005, Tranzyme entered into a license and marketing agreement whereby Open Biosystems, Inc. acquired a worldwide royalty-bearing license to certain intellectual property unrelated to Tranzyme's lead product candidates prior to the Merger and Macrocyclic Template Chemistry (MATCH) drug discovery technology, as specified in the agreement. The Company earns royalties on annual net sales at rates that vary by licensed product category as defined in the agreement through 2017 or until the expiration date of the last-to-expire licensed patent or twelve years, whichever occurs last. Royalty revenue recognized from the licensing agreement was $33,000 for the three and nine month period ended September 30, 2013. | |
Bristol-Myers Squibb Company | |
In December 2009, Tranzyme entered into a two-year collaboration agreement with Bristol-Myers Squibb Company ("BMS") to discover, develop and commercialize novel macrocyclic compounds, other than Tranzyme's product candidates and internal programs, directed against a limited number of targets of interest to BMS. | |
On January 4, 2013, Tranzyme announced the successful completion of its chemistry-based drug discovery | |
collaboration with BMS. As a result of the joint research efforts, the Company transferred compounds to BMS for further development across multiple drug targets. Under the terms of the agreement, BMS is solely responsible for preclinical and clinical development of all products arising from the collaboration and for their commercialization globally. In connection with the agreement, the Company may receive up to approximately $80.0 million in additional development milestone payments, and $30.0 million in sales milestone payments, for each target program if development and regulatory milestones, or commercial milestones, respectively, are achieved. In addition, the Company would receive graduated single-digit percentage royalties and sales milestone payments on annual net sales of commercial products. | |
During the third quarter review of the Bristol-Myers Squibb (BMS) collaboration agreement, the Company determined that BMS will terminate its efforts on the development of one of two macrocyclic compounds under development pursuant to the Company's on-going collaboration agreement. | |
Material Transfer Agreements | |
During the three and nine month periods ended September 30, 2013, the Company billed approximately $167,000 of nonrefundable payments upon transfer of material to the third parties based upon agreements previously entered into by Tranzyme prior to the Merger. Neither the Company nor the third parties have any obligation beyond the delivery of materials and payment, therefore all the revenue was recognized upon completion of the material transfers during the three and nine month periods ended September 30, 2013. |
Stockholders_Deficit
Stockholders' Deficit | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Equity Transactions Disclosure [Text Block] | ' | ||||||||||||
Stockholders’ Deficit | |||||||||||||
Convertible Preferred Stock | |||||||||||||
Pursuant to the merger, Private Ocera’s convertible notes payable plus accrued interest were converted to Series C convertible preferred stock at a rate of $2.04858 per share and immediately thereafter, Private Ocera’s Series A, Series B and Series C convertible preferred stock was converted to common stock on a share for share basis and all resultant Private Ocera common stock was exchanged for Tranzyme common stock at a rate of one Private Ocera share for 0.11969414 Tranzyme, Inc. shares. | |||||||||||||
The following summarizes our preferred stock balances at September 30, 2013 and December 31, 2012 (in thousands except share and per share amounts): | |||||||||||||
September 30, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Series A convertible preferred stock, $0.001 par value, | |||||||||||||
no shares authorized or outstanding at September 30, 2013 (unaudited) and 14,720,000 shares authorized and 1,735,565 shares issued and outstanding at December 31, 2012, respectively. Liquidation preference of $0 and $14,500 at September 30, 2013 (unaudited) and December 31, 2012, respectively. | — | 14,346 | |||||||||||
Series B convertible preferred stock, $0.001 par value, | |||||||||||||
no shares authorized, issued or outstanding at September 30, 2013 (unaudited) and 8,600,000 authorized, 1,029,369 issued and outstanding at December 31, 2012, respectively. Liquidation preference of $0 and $12,040 at September 30, 2013 (unaudited) and December 31, 2012, respectively. | — | 11,983 | |||||||||||
Series C convertible preferred stock, par value $0.001, | |||||||||||||
no shares authorized at September 30, 2013 (unaudited) and 17,350,000 shares authorized at December 31, 2012, respectively. No shares issued and outstanding at September 30, 2013 and 2,075,390 shares issued and outstanding December 31, 2012. Liquidation preference of $0 and $35,521 at September 30, 2013 (unaudited) and December 31, 2012, respectively. | — | 35,414 | |||||||||||
Common Stock | |||||||||||||
In June 2005, the Company issued 574,531 shares of common stock at $0.009 per share to its founders in exchange for cash proceeds of $5,000. | |||||||||||||
On July 15, 2013, Private Ocera completed the Merger with Tranzyme as discussed in Note 1. In connection with the Merger, the combined company changed its name to Ocera Therapeutics, Inc. and the name of Private Ocera was changed to Ocera Subsidiary, Inc. | |||||||||||||
Immediately prior to the effective time of the Merger, the principal and interest under Private Ocera's outstanding convertible notes converted into shares of Series C Preferred Stock of Private Ocera, and, immediately thereafter, all outstanding preferred stock of Private Ocera converted into the common stock of Private Ocera. | |||||||||||||
At the effective time of the Merger, each outstanding share of Ocera's common stock was converted into the right to receive approximately 0.11969414 shares of Tranzyme's common stock (the “Exchange Ratio”), with cash paid in lieu of any fractional shares. | |||||||||||||
Pursuant to the Securities Purchase Agreement dated April 23, 2013, immediately following the consummation of the Merger, the combined company sold 3,317,796 shares of common stock for approximately $20.0 million of its Common Stock to the parties at a per share purchase price of $6.0264 (the "Financing"). | |||||||||||||
In connection with the Merger, the combined company changed its name to Ocera Therapeutics, Inc. and the name of Private Ocera was changed to Ocera Subsidiary, Inc. After giving effect to the Merger and the Financing, the combined company had 11,287,943 shares of common Stock outstanding. | |||||||||||||
The following table summarizes common stock issuances during the nine months ended September 30, 2013: | |||||||||||||
Common Stock Outstanding (# of shares) | |||||||||||||
(unaudited) | |||||||||||||
Common stock outstanding, December 31, 2012 | 626,593 | ||||||||||||
Conversion of promissory note and accrued interest | 186,217 | ||||||||||||
Conversion of convertible preferred stock | 4,840,324 | ||||||||||||
Held by Tranzyme shareholders upon completion of merger | 2,300,036 | ||||||||||||
Issued pursuant to Financing Agreement | 3,317,976 | ||||||||||||
Exercise of common stock options | 19,927 | ||||||||||||
Common stock outstanding, September 30, 2013 | 11,291,073 | ||||||||||||
Stock Based Compensation | |||||||||||||
In 2005, the Company adopted the Ocera Therapeutics, Inc. 2005 Stock Plan (the "Plan"). At the effective time of the Merger, each outstanding stock option to purchase common stock of Private Ocera under the Plan not exercised immediately prior to the effective time of the Merger, whether or not vested, was assumed by the Company and became exercisable for shares of the registrant’s common stock in accordance with the terms of the Merger Agreement and the Company assumed the 2005 Plan. As of September 30, 2013, no options remain available for future grant under the Plan. | |||||||||||||
On March 3, 2011 the Company’s Board of Directors adopted, and stockholders subsequently approved, the 2011 Stock Option and Incentive Plan, (the “2011 Plan”) which authorized the issuance of up to 218,995 shares of common stock under the plan. | |||||||||||||
On April 19, 2012, the Company's Board of Directors adopted, and on June 7, 2012 the Company's stockholders approved, an amendment and restatement of the 2011 Plan which authorized the issuance of an additional 83,333 shares of common stock under the amended and restated 2011 Plan. | |||||||||||||
On August 13, 2013, the Company’s board of directors approved an amendment to the 2011 Plan to increase the maximum number of shares that may be issued under the plan from 302,328 to 2,302,328 shares. In connection with this amendment, the Company’s board of directors authorized the grant of an aggregate of 1,454,200 common stock options to its employees. In addition, on August 30, 2013, the Company’s board of directors authorized the grant of an aggregate of 140,000 common stock options to non-employee members of the board of directors. The amendment to the 2011 Plan and the common stock option grants are subject to stockholder approval within twelve months from August 13, 2013. If stockholder approval is not obtained, the increase to the number of shares issuable under the 2011 plan will not be effective and the stock option grants shall terminate. Given that the options are subject to shareholder approval of the increase to the plan, the Company does not consider the awards to be outstanding for financial accounting purposes. | |||||||||||||
As of September 30, 2013 the Company had 664,216 stock options outstanding at a weighted average exercise price of $15.34. | |||||||||||||
In June 2012, the Company issued 61,653 shares of common stock options to an executive. One-half of the stock options vest monthly over a one year period from the vesting commencement date. The remainder of the stock options are performance based and would vest upon the closing of certain strategic or financing transactions. In April 2013, the terms of the stock option agreement were modified to further define the meaning of strategic or financing transactions such as the Merger Agreement. On July 15, 2013 as a result of the Merger, the performance based portion of the stock option vested and $153,000 of stock compensation expense was recorded for the three and nine months ended September 30, 2013. | |||||||||||||
The Company recognized stock based compensation expense as follows (in thousands): | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Research and development | $ | 2 | $ | 4 | $ | 6 | $ | 22 | |||||
General and administrative | 200 | 26 | 228 | 106 | |||||||||
Total | $ | 202 | $ | 30 | $ | 234 | $ | 128 | |||||
Since December 20, 2004 (inception) to September 30, 2013, the Company has incurred $1,115,000 of stock based compensation expense. |
Merger_with_Tranzyme_Notes
Merger with Tranzyme (Notes) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
Merger with Tranzyme | ' | ||||||||||||
Merger with Tranzyme, Inc. | |||||||||||||
On July 15, 2013 Merger Sub”, a wholly owned subsidiary of Tranzyme, completed its Merger with Private Ocera. | |||||||||||||
The Merger was accounted for as a reverse merger under the acquisition method of accounting. Under the acquisition method of accounting, Private Ocera was treated as the accounting acquiror and Tranzyme was treated as the “acquired” company for financial reporting purposes as, immediately upon completion of the Merger, Private Ocera stockholders held a majority of the voting interest of the combined company. In addition, six of the nine members of the board of directors of the combined company were former members of Private Ocera board of directors. Therefore, the former members of Private Ocera board of directors possess majority control of the board of directors of the combined company. | |||||||||||||
The purchase price for Tranzyme is as follows (in thousands): | |||||||||||||
Fair value of Tranzyme shares outstanding | $ | 13,249 | |||||||||||
Fair value of vested Tranzyme stock options | 275 | ||||||||||||
Purchase Price | $ | 13,524 | |||||||||||
In accordance with ASC 805, the purchase price has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed on the basis of their estimated fair values on the date of acquisition based on valuations performed by a third party. The Company engaged a third party valuation firm to assist management in its analysis of the fair value of Tranzyme. All estimates, key assumptions, and forecasts were either provided by or reviewed by management. While the Company chose to utilize a third party valuation firm, the fair value analysis and related valuations represent the conclusions of management and not the conclusions or statements of any third party. | |||||||||||||
The following table summarizes the preliminary determination of the purchase price to the assets acquired and liabilities assumed (in thousands): | |||||||||||||
Purchase Price | |||||||||||||
Cash and cash equivalents | $ | 7,464 | |||||||||||
Accounts and investment tax credits receivable, net | 636 | ||||||||||||
Prepaid expenses and other assets | 159 | ||||||||||||
Fixed assets | 744 | ||||||||||||
Intangible assets | 5,940 | ||||||||||||
Goodwill | 917 | ||||||||||||
Accounts payable | (1,029 | ) | |||||||||||
Accrued and long-term liabilities | (1,307 | ) | |||||||||||
$ | 13,524 | ||||||||||||
The recorded amounts for assets and liabilities are provisional and subject to change. | |||||||||||||
Intangible assets are being amortized on a straight-line basis and include the following as of September 30, 2013 (in thousands, except for useful life): | |||||||||||||
Amount | Useful life | ||||||||||||
Customer relationships | $ | 4,180 | 2.5 to 5 years | ||||||||||
Developed technology | 1,760 | 5 years | |||||||||||
$ | 5,940 | ||||||||||||
The Company believes that the historical values of Tranzyme's current assets and current liabilities approximate their fair value based on the short-term nature of such items. Tranzyme's property and equipment consists of assets whose historical cost less depreciation is deemed to be its fair value. The identifiable intangible assets are Tranzyme’s technology, which consists primarily of its intellectual property related to Tranzyme’s MATCHTM technology, and the estimated net present value of future cash flows from collaborative agreements to be generated from the MATCHTM technology used in the development activities. | |||||||||||||
The collaboration agreements were valued using a risk adjusted multi-period excess earnings analysis, a form of the income approach, which incorporates the estimated future cash flows to be generated from these relationship assets. Excess earnings are the earnings remaining after deducting the market rates of return on the estimated values of contributory assets, including debt-free net working capital, tangible and intangible assets. The excess earnings are thereby calculated for each year of a multi-year projection period, factored for industry-wide probabilities of success and discounted to a present value. Accordingly, the primary components of this method consist of the determination of excess earnings and an appropriate rate of return. | |||||||||||||
The valuation of the Tranzyme's proprietary MATCHTM technology is based on replacement method of the cost approach that considers the cost to replace the acquired technology. The cost approach is based on the premise that a prudent investor would pay no more for an asset than its replacement or reproduction cost. The cost to replace the asset would include the cost of constructing a similar asset of equivalent utility at prices applicable at the time of the valuation analysis. The estimated fair value attributed to the developed technology is amortized over a weighted average useful life of approximately 5 years. | |||||||||||||
Goodwill is calculated as the difference between the fair value of the consideration expected to be transferred and the values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed. | |||||||||||||
The Company has included the results of operations of Tranzyme, Inc. in its consolidated financial statements subsequent to July 15, 2013, the date of the Merger. The unaudited financial information in the table below summarizes the combined results of operations of the Company and Tranzyme, on a pro forma basis, as though the companies had been combined as of the beginning of the period presented in thousands: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | |||||||||||||
Licensing and royalty revenue | $ | 200 | $ | 1,819 | $ | 1,692 | $ | 6,838 | |||||
Net loss | $ | (6,753 | ) | $ | (5,042 | ) | $ | (13,146 | ) | $ | (21,673 | ) | |
Net loss per share, basic and diluted | $ | (0.60 | ) | $ | (0.45 | ) | $ | (1.16 | ) | $ | (1.92 | ) |
Goodwill_and_acquired_intangib
Goodwill and acquired intangible assets (Notes) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||
Goodwill and acquired intangible assets | ' | ||||||||||||
Goodwill and acquired intangible assets | |||||||||||||
Goodwill of $0.9 million was recorded pursuant to the merger with Tranzyme in July, 2013. There were no impairments or other additions to goodwill during the periods presented. | |||||||||||||
The net book value of acquired intangible assets as of September 30, 2013 were as follows in thousands: | |||||||||||||
Accumulated | Weighted Average | ||||||||||||
Amortization | Remaining | ||||||||||||
and | Useful Life | ||||||||||||
Gross | Impairments | Net | (in years) | ||||||||||
Customer relationships | $ | 4,180 | $ | (1,768 | ) | $ | 2,412 | 2.25 - 4.75 | |||||
Developed technology | 1,760 | (73 | ) | 1,687 | 4.75 | ||||||||
$ | 5,940 | (1,841 | ) | $ | 4,099 | ||||||||
The estimated future amortization expense of purchased intangible assets as of September 30, 2013 is $0.2 million for the three months ended December 31, 2013 and $0.9 million, $0.9 million, $0.8 million, $0.8 million and $0.4 million for the years ended December 31, 2014, 2015, 2016, 2017 and 2018, respectively. |
Restructuring_of_Tranzyme_Phar
Restructuring of Tranzyme Pharma Inc. (Notes) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring of Tranzyme Pharma Inc. | ' | ||||||||||||
Restructuring of Tranzyme Pharma Inc. (Sherbrooke, Quebec) | |||||||||||||
In September 2013, Ocera approved a restructuring plan related to the operations of its Sherbrooke, Quebec facility (the "Sherbrooke Facility") in order to focus its management and resources on the clinical development of OCR-002. In connection with the restructuring, the Company will terminate employees at the Canadian location, exit its facility and terminate certain contractual obligations. The Company expects to incur cash expenses of approximately $900,000 to $1.1 million in connection with the restructuring plan. These expenses and charges include (i) an estimate of approximately $100,000 to $200,000 associated with the termination of operating activities in the leased office and laboratory space at the Sherbrooke Facility; (ii) an estimate of approximately $700,000 to $800,000 associated with the separation from employment of 17 employees at the Sherbrooke Facility; (iii) an estimate of approximately $100,000 in other liabilities related to the restructuring plan. | |||||||||||||
Restructuring charges of $742,000 were recorded during the three months ended September 30, 2013. The following table summarizes the Company’s restructuring activities during the three months ended September 30, 2013 in thousands: | |||||||||||||
Post- Employment Benefits | Operating Activities | Other liabilities | Total | ||||||||||
Restructuring charges | $ | 708 | $ | 34 | $ | — | $ | 742 | |||||
Cash payments and other settlements | — | — | — | — | |||||||||
Accrual balances at September 30, 2013 | $ | 708 | $ | 34 | $ | — | $ | 742 | |||||
Impairment_of_Intangible_Asset
Impairment of Intangible Asset (Notes) | 9 Months Ended |
Sep. 30, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Impairment of Intangible Asset | ' |
Impairment of Intangible Asset | |
During the third quarter review of the Bristol-Myers Squibb (BMS) collaboration agreement, the Company determined that BMS will terminate its efforts on the development of one of two macrocyclic compounds under development pursuant to the Company's on-going collaboration agreement. As a result, the Company concluded that the expected undiscounted cash flows from the terminated compound was zero and the Company had an impairment of 50% of the intangible asset value associated with the agreement. The Company expensed $1.6 million as a result of the impairment during the three months ended September 30, 2013. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
Securities Purchase Agreement | |
On November 8, 2013, the Company closed on the a private placement pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) by and among the Company and entities affiliated with Vivo Capital, Venrock, Deerfield Management, Great Point Partners, QVT Financial, RA Capital Management, InterWest Partners, Three Arch Opportunities Fund and certain other purchasers identified therein (collectively, the “Purchasers”). The Company sold and issued, and the Purchasers purchased, an aggregate of 3,940,887 units (“Units”) for an aggregate purchase price of $28.0 million. Each Unit consisted of one share of Common Stock and warrants to acquire 0.20 shares of Common Stock at an exercise price of $7.663 per share (“Warrants”). The Units consist of an aggregate of 3,940,887 shares of Common Stock (the “Shares”) and Warrants exercisable for an aggregate of 788,177 shares of Common Stock (the “Warrant Shares”). | |
Registration Rights Agreement | |
Pursuant to the terms of the Purchase Agreement, the Company and the Purchasers entered into the Registration Rights Agreement (the “Registration Rights Agreement”) concurrently with entering into the Purchase Agreement. Within 30 calendar days after November 8, 2013 (the “Closing”), the Company will be required to file with the Securities and Exchange Commission (the “SEC”) a registration statement covering the resale by the Purchasers or their permitted transferees the Shares, Warrant Shares and any securities issued or issuable with respect to the Shares or Warrant Shares as a result of a stock split, dividend or other distribution, recapitalization or similar event (collectively, the “Registrable Securities”), provided that with respect to a holder of Registrable Securities, such holder’s Shares or Warrant Shares shall cease to be Registrable Securities upon the earliest to occur of (x) any such securities are sold pursuant to a registration statement or Rule 144 under the Securities Act, and (y) two years from the date of the Closing. |
Commitments_and_Contingencies_
Commitments and Contingencies (Notes) | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
Commitments and Contingencies | |
From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of our business. Any of these claims could subject the Company to costly legal expenses and, while the Company generally believes that it has adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage or our policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the Company's consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of Ocera Therapeutics, Inc, and its subsidiaries, Ocera Subsidiary, Inc. and Tranzyme Pharma Inc. ("Tranzyme Pharma"). All significant intercompany balances and transactions have been eliminated. All amounts included in these notes to consolidated financial statements are reported in U.S. dollars, unless otherwise indicated. | |
Unaudited Interim Financial Information | ' |
Unaudited Interim Financial Information | |
The accompanying interim balance sheet as of September 30, 2013 and the statements of operations and comprehensive loss for the three and nine months ended September 30, 2013 and 2012 and the period from December 20, 2004 (inception) to September 30, 2013, and the statements of cash flows for the nine months ended September 30, 2013 and 2012 and period from December 20, 2004 (inception) to September 30, 2013, and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with GAAP. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2013 and its results of operations and comprehensive loss for the three and nine months ended September 30, 2013 and 2012 and the period from December 20, 2004 (inception) to September 30, 2013, and its cash flows for the nine months ended June 30, 2013 and 2012 and the period from December 20, 2004 (inception) to September 30, 2013. The results for the nine months ended September 30, 2013 are not necessarily indicative of the results expected for the full fiscal year or any other interim period. | |
Segment Reporting | ' |
Segment Reporting | |
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment operating in the United States and Canada. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Cash and cash equivalents are stated at cost, which approximates fair value. The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents include money market funds and various deposit accounts. | |
Investment Tax Credits Receivable | ' |
Investment Tax Credits Receivable | |
The Company participates in government assistance programs in Quebec, Canada that provide refundable investment tax credits for certain research and development expenditures. The receivable represents management’s estimate of amounts expected to be recovered and is subject to adjustment based upon audit by Canadian taxation authorities. The Company reported investment tax credits receivable of $585,000 as of September 30, 2013. | |
Business Combinations | ' |
Business Combinations | |
The Company accounted for the merger with Tranzyme as a reverse merger under the acquisition method of accounting. The consideration paid to acquire Tranzyme was measured at fair value and included the exchange of our common stock and assumption of vested stock options. This allocation of the purchase price resulted in recognition of intangible assets related to customer relationships and developed technology and goodwill. The allocation of purchase price requires the Company to make significant estimates and assumptions. The key assumptions in determining the fair value of intangible assets were the discount rate and the probability assigned to the milestone or royalty being achieved. Changes in the fair value may result from either the passage of time or events occurring after the acquisition date, such as changes in the estimate of the probability of achieving the milestone or royalty. | |
Intangible Assets | ' |
Intangible Assets and Goodwill | |
The Company recorded intangible assets and goodwill upon the acquisition of Tranzyme on July 15, 2013. Acquired intangible assets are amortized on a straight-line basis over the remaining estimated economic life of 2.5 to 5 years. The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of an asset is measured by comparing its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that the carrying amount is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset exceeds its fair value. | |
The Company performs an annual qualitative assessment of its goodwill to determine if any events or circumstances exist, such as an adverse change in business climate or adverse developmental or regulatory results of OCR-002, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. The determination of fair value requires significant judgment and estimates. For the purpose of impairment testing, the Company has determined that it has one reporting unit. There has been no impairment of goodwill for any periods presented. | |
Foreign Currency Translation | ' |
Foreign Currency Translation | |
The Company's consolidated financial statements are presented in U.S. dollars. The financial statements of Tranzyme Pharma are re-measured from the local currency to U.S. dollars, as follows: monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date and non-monetary items at exchange rates in effect when the assets were acquired or non-monetary liabilities incurred. Revenue and expenses are translated at the average exchange rates prevailing during the period of the transaction. The gains and losses resulting from the translation of foreign currency financial statements into U.S. dollars are reported in accumulated other comprehensive income (loss). | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company recognizes revenue when it is realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: (a) persuasive evidence of an arrangement exists; (b) delivery has occurred or services have been rendered; (c) the Company’s price to the buyer is fixed or determinable; and (d) collectability is reasonably assured. | |
Research and Development Expenses | ' |
Research and Development Expenses | |
Research and development costs are expensed as incurred and primarily consist of license fees, salaries and related employee benefits, costs associated with clinical trials, manufacturing control, quality assurance, medical affairs and regulatory activities. The Company uses external service providers and vendors to conduct clinical trials and to provide various other research and development and manufacturing related products and services. | |
Preferred Stock Warrant Liability | ' |
Preferred Stock Warrant Liability | |
Certain warrants to purchase the Company’s capital stock have historically been classified as liabilities and are recorded at estimated fair value. At each reporting period, any change in fair value of the freestanding warrants is recorded as other (expense) income. As a result of the Merger, the fair value of the preferred stock warrant liability was reclassified to additional paid in capital upon the conversion of warrants to purchase preferred stock into warrants to purchase common stock. | |
Stock Based Compensation | ' |
Stock Based Compensation | |
Share-based awards, including stock options, are recorded at their fair value as of the grant date and recognized to expense on a straight-line basis over the employee’s requisite service period, which is generally the vesting period of the award. Share-based compensation expense is based on awards ultimately expected to vest, and therefore the recorded expense includes an estimate of future forfeitures. Forfeitures are to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The measurement of nonemployee share-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period over which services are received. The Company estimates the fair value of share-based awards to employees, directors and non-employees using the Black-Scholes option-valuation model. The Black-Scholes model requires the input of subjective assumptions, including volatility, the expected term and the fair value of the underlying common stock on the date of grant, among other inputs. | |
Prior to the Merger the company granted stock options to purchase common stock to employees with exercise prices equal to the value of the underlying stock, as determined by the board of directors on the date the equity award was granted. The board of directors determined the fair value of the underlying common stock by considering a number of factors, including historical and projected financial results, the risks the Company faced at the time, the preferences of the Company’s preferred stockholders and the lack of liquidity of the Company’s common stock. | |
Income Taxes | ' |
Income Taxes | |
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities reflect the future tax consequences of the differences between the financial reporting and tax basis of assets and liabilities using current enacted tax rates. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. | |
The Company’s policy related to accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attributed criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. | |
Net Loss Per Share | ' |
Net Loss Per Share | |
Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities which include convertible preferred stock, warrants, convertible notes payable and outstanding stock options under the stock option plan have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
Occasionally, new accounting standards are issued or proposed by the Financial Accounting Standards Board (the | |
"FASB"), or other standards-setting bodies that Ocera adopts by the effective date specified within the standard. Unless | |
otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on | |
Ocera financial statements upon adoption. | |
In February 2013, the FASB issued a final rule related to the reporting of amounts reclassified out of accumulated | |
other comprehensive income that requires entities to report, either on their income statement or in a footnote to their financial statements, the effects on earnings from items that are reclassified out of other comprehensive income. The new accounting rules was effective for Ocera in the first quarter of 2013. The adoption of the new accounting rules did not have a material effect on Ocera's financial condition, results of operations or cash flows. Ocera chose to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in a single continuous statement of operations and comprehensive income. | |
In July 2013, the FASB issued Accounting Standards Update, or ASU, No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. The Company intends to adopt this guidance at the beginning of our first quarter of fiscal year 2014, and does not expect the adoption of this standard will have a material impact on the Company’s financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | ||||||||||||
The following table presents the computation of net loss per share (in thousands, except share and per share data): | |||||||||||||
Three Months | Nine Months | ||||||||||||
Ended September 30, | Ended September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Numerator | |||||||||||||
Net loss | $ | (7,404 | ) | $ | (820 | ) | $ | (10,222 | ) | $ | (2,882 | ) | |
Denominator | |||||||||||||
Weighted average common shares outstanding used to compute net loss per share, basic and diluted | 9,669,320 | 626,953 | 3,683,156 | 626,953 | |||||||||
Net loss per share, basic and diluted | $ | (0.77 | ) | $ | (1.31 | ) | $ | (2.78 | ) | $ | (4.60 | ) | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ||||||||||||
Potentially dilutive securities are not included in the calculation of dilutive net loss per share because to do so would be anti-dilutive are as follows (in common equivalent shares on a weighted-average basis): | |||||||||||||
Three Months ended | Nine Months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Convertible preferred stock | 736,570 | 4,840,324 | 3,472,405 | 4,840,324 | |||||||||
Convertible preferred stock warrants | 2,003 | 26,332 | 14,902 | 26,332 | |||||||||
Common stock warrants | 158,939 | 65,731 | 140,722 | 31,011 | |||||||||
Common stock options | 633,163 | 706,497 | 573,789 | 665,719 | |||||||||
Total | 1,530,675 | 5,638,884 | 4,201,818 | 5,563,386 | |||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||
Assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 are as follows (in thousands): | |||||||||||||
Balance as of | Quoted Prices | Significant | Significant | ||||||||||
September 30, | in Active | Other | Unobservable | ||||||||||
2013 | Markets for | Observable | Inputs | ||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets | |||||||||||||
Money market funds | $ | 18,437 | $ | 18,437 | $ | — | $ | — | |||||
Total assets | $ | 18,437 | $ | 18,437 | $ | — | $ | — | |||||
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 are as follows (in thousands): | |||||||||||||
Balance as of | Quoted Prices | Significant | Significant | ||||||||||
December 31, | in Active | Other | Unobservable | ||||||||||
2012 | Markets for | Observable | Inputs | ||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||
(Level 1) | (Level 2) | ||||||||||||
Assets | |||||||||||||
Money market funds | $ | 1,437 | $ | 1,437 | $ | — | $ | — | |||||
Total assets | $ | 1,437 | $ | 1,437 | $ | — | $ | — | |||||
Liabilities | |||||||||||||
Preferred stock warrant liability (1) | $ | 16 | $ | — | $ | — | $ | 16 | |||||
Total liabilities | $ | 16 | $ | — | $ | — | $ | 16 | |||||
(1) The Company estimated fair value of its preferred stock warrant liability at issuance and adjusts the carrying value | |||||||||||||
each reporting period utilizing the model based on the following significant unobservable inputs: risk-free rate of 0.08% and 0.13%; the expected dividend rates of 0%; the remaining expected life of the warrants 0.3 and 0.8 years; the expected volatility of 79% and 91% of the fair value of the underlying preferred stock. The estimates are based on subjective assumptions that could differ in the future. | |||||||||||||
The | |||||||||||||
Schedule of change in fair value of level 3 liabilities | ' | ||||||||||||
The following table provides the change in the fair value of Level 3 liabilities for the nine months ended September 30, 2013 (in thousands): | |||||||||||||
Convertible | |||||||||||||
Preferred Stock | |||||||||||||
Warrant Liability | |||||||||||||
Balance at December 31, 2012 | $ | (16 | ) | ||||||||||
Change in fair value of warrant liability (unaudited) | (15 | ) | |||||||||||
Conversion of preferred stock warrants into common stock warrants (unaudited) | (1 | ) | |||||||||||
Balance at September 30, 2013 (unaudited) | $ | — | |||||||||||
Convertible_Notes_Payable_Tabl
Convertible Notes Payable (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Debt Disclosure [Abstract] | ' | |||||
Schedule of Outstanding Convertible Preferred and Common Stock Warrants and Corresponding Excercise Price | ' | |||||
The following table summarizes the outstanding common stock warrants and the corresponding exercise price as of September 30, 2013: | ||||||
Number of Shares | Per-Share | |||||
Outstanding at | Exercise | |||||
Issuance Date | 30-Sep-13 | Price | Expiration | |||
11/1/06 | 13,166 | $ | 8.35 | 11/1/13 | ||
12/3/08 | 2,380 | 84 | 12/3/15 | |||
9/30/10 | 3,240 | 160.44 | 4/6/15 | |||
1/31/12 | 13,623 | 44.04 | 1/31/22 | |||
3/30/12 | 26,292 | 0.67 | 3/30/19 | |||
6/30/12 | 39,439 | 0.67 | 6/30/19 | |||
10/1/12 | 65,731 | 0.67 | 10/1/19 | |||
Total | 163,871 |
Stockholders_Deficit_Tables
Stockholders' Deficit (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Equity Transactions [Abstract] | ' | ||||||||||||
Schedule of convertible preferred stock | ' | ||||||||||||
The following summarizes our preferred stock balances at September 30, 2013 and December 31, 2012 (in thousands except share and per share amounts): | |||||||||||||
September 30, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Series A convertible preferred stock, $0.001 par value, | |||||||||||||
no shares authorized or outstanding at September 30, 2013 (unaudited) and 14,720,000 shares authorized and 1,735,565 shares issued and outstanding at December 31, 2012, respectively. Liquidation preference of $0 and $14,500 at September 30, 2013 (unaudited) and December 31, 2012, respectively. | — | 14,346 | |||||||||||
Series B convertible preferred stock, $0.001 par value, | |||||||||||||
no shares authorized, issued or outstanding at September 30, 2013 (unaudited) and 8,600,000 authorized, 1,029,369 issued and outstanding at December 31, 2012, respectively. Liquidation preference of $0 and $12,040 at September 30, 2013 (unaudited) and December 31, 2012, respectively. | — | 11,983 | |||||||||||
Series C convertible preferred stock, par value $0.001, | |||||||||||||
no shares authorized at September 30, 2013 (unaudited) and 17,350,000 shares authorized at December 31, 2012, respectively. No shares issued and outstanding at September 30, 2013 and 2,075,390 shares issued and outstanding December 31, 2012. Liquidation preference of $0 and $35,521 at September 30, 2013 (unaudited) and December 31, 2012, respectively. | — | 35,414 | |||||||||||
Stock based compensation expense recognized | ' | ||||||||||||
The Company recognized stock based compensation expense as follows (in thousands): | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | (unaudited) | ||||||||||||
Research and development | $ | 2 | $ | 4 | $ | 6 | $ | 22 | |||||
General and administrative | 200 | 26 | 228 | 106 | |||||||||
Total | $ | 202 | $ | 30 | $ | 234 | $ | 128 | |||||
Merger_with_Tranzyme_Tables
Merger with Tranzyme (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
Purchase price | ' | ||||||||||||
The purchase price for Tranzyme is as follows (in thousands): | |||||||||||||
Fair value of Tranzyme shares outstanding | $ | 13,249 | |||||||||||
Fair value of vested Tranzyme stock options | 275 | ||||||||||||
Purchase Price | $ | 13,524 | |||||||||||
Summary of the preliminary adjusted allocation of the purchase price | ' | ||||||||||||
The following table summarizes the preliminary determination of the purchase price to the assets acquired and liabilities assumed (in thousands): | |||||||||||||
Purchase Price | |||||||||||||
Cash and cash equivalents | $ | 7,464 | |||||||||||
Accounts and investment tax credits receivable, net | 636 | ||||||||||||
Prepaid expenses and other assets | 159 | ||||||||||||
Fixed assets | 744 | ||||||||||||
Intangible assets | 5,940 | ||||||||||||
Goodwill | 917 | ||||||||||||
Accounts payable | (1,029 | ) | |||||||||||
Accrued and long-term liabilities | (1,307 | ) | |||||||||||
$ | 13,524 | ||||||||||||
Schedule of intangible assets acquired | ' | ||||||||||||
Intangible assets are being amortized on a straight-line basis and include the following as of September 30, 2013 (in thousands, except for useful life): | |||||||||||||
Amount | Useful life | ||||||||||||
Customer relationships | $ | 4,180 | 2.5 to 5 years | ||||||||||
Developed technology | 1,760 | 5 years | |||||||||||
$ | 5,940 | ||||||||||||
Pro forma information | ' | ||||||||||||
The unaudited financial information in the table below summarizes the combined results of operations of the Company and Tranzyme, on a pro forma basis, as though the companies had been combined as of the beginning of the period presented in thousands: | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(unaudited) | |||||||||||||
Licensing and royalty revenue | $ | 200 | $ | 1,819 | $ | 1,692 | $ | 6,838 | |||||
Net loss | $ | (6,753 | ) | $ | (5,042 | ) | $ | (13,146 | ) | $ | (21,673 | ) | |
Net loss per share, basic and diluted | $ | (0.60 | ) | $ | (0.45 | ) | $ | (1.16 | ) | $ | (1.92 | ) |
Goodwill_and_acquired_intangib1
Goodwill and acquired intangible assets (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||
Schedule of acquired intangible assets | ' | ||||||||||||
The net book value of acquired intangible assets as of September 30, 2013 were as follows in thousands: | |||||||||||||
Accumulated | Weighted Average | ||||||||||||
Amortization | Remaining | ||||||||||||
and | Useful Life | ||||||||||||
Gross | Impairments | Net | (in years) | ||||||||||
Customer relationships | $ | 4,180 | $ | (1,768 | ) | $ | 2,412 | 2.25 - 4.75 | |||||
Developed technology | 1,760 | (73 | ) | 1,687 | 4.75 | ||||||||
$ | 5,940 | (1,841 | ) | $ | 4,099 | ||||||||
The estimated future amortization expense of purchased intangible assets as of September 30, 2013 is $0.2 million for the three months ended December 31, 2013 and $0.9 million, $0.9 million, $0.8 million, $0.8 million and $0.4 million for the years ended December 31, 2014, 2015, 2016, 2017 and 2018, respectively. |
Restructuring_of_Tranzyme_Phar1
Restructuring of Tranzyme Pharma Inc. (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Schedule of estimated expenses to be incurred and expensed | ' | ||||||||||||
Restructuring charges of $742,000 were recorded during the three months ended September 30, 2013. The following table summarizes the Company’s restructuring activities during the three months ended September 30, 2013 in thousands: | |||||||||||||
Post- Employment Benefits | Operating Activities | Other liabilities | Total | ||||||||||
Restructuring charges | $ | 708 | $ | 34 | $ | — | $ | 742 | |||||
Cash payments and other settlements | — | — | — | — | |||||||||
Accrual balances at September 30, 2013 | $ | 708 | $ | 34 | $ | — | $ | 742 | |||||
The_Company_Details
The Company (Details) (USD $) | 0 Months Ended | 0 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Jul. 15, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jul. 13, 2013 | Jul. 15, 2013 | Jul. 15, 2013 | Jul. 15, 2013 | Jul. 15, 2013 |
board_member | Private Ocera [Member] | Private Ocera [Member] | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | |||
board_member | ||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of board members | 9 | ' | ' | 6 | ' | ' | ' | ' |
Conversion price | $2.05 | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon conversion | ' | ' | ' | ' | ' | 1 | 1 | 1 |
Shares issued upon conversion | ' | ' | ' | ' | 8.354627887 | ' | ' | ' |
Losses incurred since inception | ' | ($74,194) | ($63,972) | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Investment Tax Credits Receivable and Intangible Assets) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
segment | |
Accounting Policies [Abstract] | ' |
Investment tax credits receivable | $585,000 |
Finite-Lived Intangible Assets [Abstract] | ' |
Number of reporting units | 1 |
Impairment of goodwill | $0 |
Minimum [Member] | ' |
Finite-Lived Intangible Assets [Abstract] | ' |
Useful life | '2 years 6 months |
Maximum [Member] | ' |
Finite-Lived Intangible Assets [Abstract] | ' |
Useful life | '5 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Schedule of Basic and Diluted Earnings Per Share) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 105 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 |
Numerator | ' | ' | ' | ' | ' |
Net loss | ($7,404) | ($820) | ($10,222) | ($2,882) | ($74,194) |
Denominator | ' | ' | ' | ' | ' |
Weighted average common shares outstanding used to compute net loss per share, basic and diluted | 9,669,320 | 626,953 | 3,683,156 | 626,953 | ' |
Net loss per share, basic and diluted | ($0.77) | ($1.31) | ($2.78) | ($4.60) | ' |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Schedule of Antidilutive Securities Excluded From Earnings Per Share) (Details) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 15, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share, amount | ' | 1,530,675 | 5,638,884 | 4,201,818 | 5,563,386 |
Conversion of notes payable and interest accrued excluded from diluted earnings per share | 186,217 | ' | ' | ' | ' |
Convertible Preferred Stock [Member] | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share, amount | ' | 736,570 | 4,840,324 | 3,472,405 | 4,840,324 |
Warrants [Member] | Common Stock [Member] | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share, amount | ' | 158,939 | 65,731 | 140,722 | 31,011 |
Warrants [Member] | Convertible Preferred Stock [Member] | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share, amount | ' | 2,003 | 26,332 | 14,902 | 26,332 |
Stock Options [Member] | Common Stock [Member] | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share, amount | ' | 633,163 | 706,497 | 573,789 | 665,719 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Value) (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Risk-free interest rate | 0.08% | 0.13% | |
Expected dividend rate | 0.00% | 0.00% | |
Expected term | '3 months 18 days | '9 months 18 days | |
Expected volatility rate | 79.00% | 91.00% | |
Recurring [Member] | Fair Value [Member] | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Money market funds | 18,437,000 | 1,437,000 | |
Total assets | 18,437,000 | 1,437,000 | |
Preferred stock warrant liability | ' | 16,000 | [1] |
Total liabilities | ' | 16,000 | |
Recurring [Member] | Level 1 [Member] | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Money market funds | 18,437,000 | 1,437,000 | |
Total assets | 18,437,000 | 1,437,000 | |
Preferred stock warrant liability | ' | 0 | [1] |
Total liabilities | ' | 0 | |
Recurring [Member] | Level 2 [Member] | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Money market funds | 0 | 0 | |
Total assets | 0 | 0 | |
Preferred stock warrant liability | ' | 0 | [1] |
Total liabilities | ' | 0 | |
Recurring [Member] | Level 3 [Member] | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Money market funds | 0 | 0 | |
Total assets | 0 | 0 | |
Preferred stock warrant liability | ' | 16,000 | [1] |
Total liabilities | ' | 16,000 | |
[1] | The Company estimated fair value of its preferred stock warrant liability at issuance and adjusts the carrying valueeach reporting period utilizing the model based on the following significant unobservable inputs: risk-free rate of 0.08% and 0.13%; the expected dividend rates of 0%; the remaining expected life of the warrants 0.3 and 0.8 years; the expected volatility of 79% and 91% of the fair value of the underlying preferred stock. The estimates are based on subjective assumptions that could differ in the future. |
Fair_Value_Measurements_Level_
Fair Value Measurements (Level 3 Liabilities) (Details) (Convertible Preferred Stock Warrants [Member], Level 3 [Member], USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Convertible Preferred Stock Warrants [Member] | Level 3 [Member] | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' |
Convertible preferred stock warrant liabilities, beginning of period | ($16) |
Change in fair value of warrant liability (unaudited) | -15 |
Conversion of preferred stock warrants into common stock warrants (unaudited) | -1 |
Convertible preferred stock warrant liabilities, end of period | $0 |
Convertible_Notes_Payable_Shor
Convertible Notes Payable (Short-term Debt) (Details) (USD $) | 9 Months Ended | 105 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jul. 15, 2013 | Oct. 02, 2012 | Jul. 15, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | Oct. 31, 2012 | Jul. 15, 2013 | Sep. 30, 2013 | Mar. 31, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Mar. 30, 2012 | Sep. 30, 2013 | Jun. 30, 2012 | Oct. 02, 2012 | Sep. 30, 2013 | |
Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Series C Convertible Preferred Stock [Member] | Common Stock [Member] | Special Conditions Met [Member] | Special Conditions Not Met [Member] | March 2012 Warrants [Member] | March 2012 Warrants [Member] | June 2012 Warrants [Member] | June 2012 Warrants [Member] | October 2012 Warrants [Member] | October 2012 Warrants [Member] | ||||||
March 2012 Notes [Member] | October 2012 Notes [Member] | Convertible Notes Payable [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Convertible Notes Payable [Member] | Common Stock [Member] | |||||||||||
Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||
March 2012 Notes [Member] | March 2012 Notes [Member] | ||||||||||||||||||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | $1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated interest rate | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of holders' written consent for prepayment of principal | ' | ' | ' | ' | ' | ' | 67.00% | ' | ' | ' | 67.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants as a percentage of notes outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30.00% | 75.00% | ' | ' | ' | ' | ' | ' |
Warrants issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,292 | ' | 39,439 | 65,731 | ' |
Term of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | 0.67 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.67 | ' | 0.67 | ' | ' | 0.67 |
Conversion price | ' | ' | ' | $2.05 | ' | ' | ' | ' | ' | ' | ' | $2.05 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest on convertible notes | ' | ' | ' | ' | ' | 187,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of promissory note and accrued interest | ' | ' | ' | ' | ' | 186,217 | ' | ' | ' | ' | ' | ' | 186,217 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt discount, net and noncash interest expense | $186,000 | $87,000 | $504,000 | ' | ' | ' | ' | $184,000 | $186,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_Notes_Payable_Long
Convertible Notes Payable (Long-term Debt) (Details) (USD $) | Jul. 15, 2013 | Oct. 02, 2012 | Mar. 31, 2006 | Apr. 24, 2013 | Mar. 31, 2006 | Jul. 15, 2013 |
In Millions, except Share data, unless otherwise specified | Notes Payable [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | ||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | $4 | ' | ' | ' |
Warrants issued | ' | ' | ' | ' | 26,332 | ' |
Exercise price of warrants | ' | 0.67 | ' | ' | 8.35 | ' |
Term of warrants | ' | ' | ' | ' | '7 years | ' |
Warrants expired | ' | ' | ' | 13,166 | ' | ' |
Warrants converted upon completion of merger | 19,243 | ' | ' | ' | ' | 13,166 |
Convertible_Notes_Payable_Warr
Convertible Notes Payable (Warrants) (Details) (USD $) | Jul. 15, 2013 | Oct. 02, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Oct. 31, 2012 | Mar. 31, 2012 | Nov. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
March 2012 Warrants [Member] | March 2012 Warrants [Member] | October 2012 Warrants [Member] | October 2012 Warrants [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||
November 2006 Warrants [Member] | December 2008 Warrants [Member] | September 2010 Warrants [Member] | January 2012 Warrants [Member] | March 2012 Warrants [Member] | June 2012 Warrants [Member] | October 2012 Warrants [Member] | |||||||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants outstanding, value | ' | ' | ' | $61,000 | $111,000 | $32,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassification of fair value to additional paid-in-capital | ' | ' | $93,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants converted upon completion of merger | 19,243 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants outstanding | ' | ' | ' | ' | ' | ' | ' | 163,871 | 13,166 | 2,380 | 3,240 | 13,623 | 26,292 | 39,439 | 65,731 |
Exercise price of warrants | ' | 0.67 | ' | ' | ' | ' | ' | ' | 8.35 | 84 | 160.44 | 44.04 | 0.67 | 0.67 | 0.67 |
Warrants expired | ' | ' | ' | ' | ' | ' | 13,166 | ' | ' | ' | ' | ' | ' | ' | ' |
License_Agreements_and_Acquire1
License Agreements and Acquired Development and Commericialization Rights (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | |||
Dec. 31, 2009 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2008 | Jul. 31, 2004 | Dec. 31, 2008 | Sep. 30, 2013 | Sep. 30, 2013 | |
Open Biosystems, Inc. [Member] | Open Biosystems, Inc. [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | ||||
Kuereha Corporation [Member] | Kuereha Corporation [Member] | UCL Business PLC [Member] | UCL Business PLC [Member] | Bristol-Myers Squibb Company [Member] | ||||||
compound | ||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Up-front fee for licensing | ' | ' | ' | ' | ' | ' | $1,500,000 | $1,000,000 | ' | ' |
Payment received in exchange for contract amendment | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' |
Maximum future milestone payments | ' | ' | ' | ' | ' | ' | ' | ' | 17,000,000 | ' |
Royalty revenue | ' | ' | ' | 33,000 | 33,000 | ' | ' | ' | ' | ' |
Long-Term Commitment, Term | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional development milestone receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,000,000 |
Additional sales milestone receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 |
Expected developments to be terminated | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Developments underway | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Revenues | ' | $167,000 | $167,000 | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Deficit_Convertib
Stockholders' Deficit (Convertible Preferred Stock) (Details) (USD $) | Jul. 15, 2013 | Jul. 15, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 |
Private Ocera [Member] | Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | ||
Temporary Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | $2.05 | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon conversion | ' | 8.354627887 | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, value (usd) | ' | ' | $0 | $14,346,000 | $0 | $11,983,000 | $0 | $35,414,000 |
Par value (usd per share) | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Shares authorized | ' | ' | 0 | 14,720,000 | 0 | 8,600,000 | 0 | 17,350,000 |
Shares issued | ' | ' | ' | 1,735,565 | 0 | 1,029,369 | 0 | 2,075,390 |
Shares outstanding | ' | ' | 0 | 1,735,565 | 0 | 1,029,369 | 0 | 2,075,390 |
Liquidation preference (usd) | ' | ' | $0 | $14,500 | $0 | $12,040 | $0 | $35,521 |
Stockholders_Deficit_Common_St
Stockholders' Deficit (Common Stock) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 105 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | |||
Jul. 15, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Apr. 23, 2013 | Jul. 13, 2013 | Apr. 23, 2013 | Jun. 30, 2005 | Sep. 30, 2013 | |
board_member | Private Ocera [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||||
board_member | |||||||||
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | ' | ' | ' | ' | ' | 3,317,796 | 574,531 | ' |
Shares issued, value | ' | ' | ' | ' | ' | ' | $20,000,000 | ' | ' |
Share price (usd per share) | ' | ' | ' | ' | ' | ' | $6.03 | $0.01 | ' |
Number of board members | 9 | ' | ' | ' | ' | 6 | ' | ' | ' |
Proceeds from issuance of common stock | ' | $23,000 | $0 | $113,000 | ' | ' | ' | $5,000 | ' |
Common stock, shares outstanding | ' | 626,593 | ' | ' | 11,287,943 | ' | ' | ' | 626,593 |
Conversion of promissory note and accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | 186,217 |
Conversion of convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | 4,840,324 |
Held by Tranzyme shareholders upon completion of merger | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,036 |
Issued pursuant to Financing Agreement | ' | ' | ' | ' | ' | ' | ' | ' | 3,317,976 |
Exercise of common stock options | ' | ' | ' | ' | ' | ' | ' | ' | 19,927 |
Common stock, shares outstanding | ' | 11,291,073 | ' | 11,291,073 | 11,287,943 | ' | ' | ' | 11,291,073 |
Stock_Based_Compensation_Detai
(Stock Based Compensation) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 105 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Aug. 30, 2013 | Apr. 19, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 13, 2013 | Mar. 03, 2011 |
Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total shares available for grant | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' |
Total shares authorized | ' | ' | ' | ' | ' | ' | ' | 302,328 | ' | ' | 2,302,328 | 218,995 |
Additional shares authorized | ' | ' | ' | ' | ' | ' | ' | 83,333 | ' | ' | ' | ' |
Stock options issued during period | 61,653 | ' | ' | ' | ' | ' | 1,454,200 | ' | ' | ' | ' | ' |
Aggregate options authorized for grant to non-employees | ' | ' | ' | ' | ' | ' | 140,000 | ' | ' | ' | ' | ' |
Shares outstanding | ' | 664,216 | ' | 664,216 | ' | 664,216 | ' | ' | ' | ' | ' | ' |
Weighted average exercise price | ' | $15.34 | ' | $15.34 | ' | $15.34 | ' | ' | ' | ' | ' | ' |
Vesting term for options | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated share-based compensation expense | ' | $202 | $30 | $234 | $128 | $1,115 | ' | ' | $153 | $153 | ' | ' |
Stockholders_Deficit_Allocatio
Stockholders' Deficit (Allocation of Share Based Compensation Expense) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 105 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Allocated share-based compensation expense | $202 | $30 | $234 | $128 | $1,115 |
Research and Development Expense [Member] | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Allocated share-based compensation expense | 2 | 4 | 6 | 22 | ' |
General and Administrative Expense [Member] | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Allocated share-based compensation expense | $200 | $26 | $228 | $106 | ' |
Merger_with_Tranzyme_Purchase_
Merger with Tranzyme (Purchase Price) (Details) (USD $) | 0 Months Ended | ||
In Thousands, unless otherwise specified | Jul. 15, 2013 | Jul. 13, 2013 | Apr. 23, 2013 |
board_member | Private Ocera [Member] | Tranzyme Inc. [Member] | |
board_member | |||
Business Acquisition [Line Items] | ' | ' | ' |
Number of board members | 9 | 6 | ' |
Fair value of Tranzyme shares outstanding | ' | ' | $13,249 |
Fair value of vested Tranzyme stock options | ' | ' | 275 |
Purchase Price | ' | ' | $13,524 |
Merger_with_Tranzyme_Recognize
Merger with Tranzyme (Recognized Identifiable Assets Acquired and Liabilities Assumed) (Details) (USD $) | Sep. 30, 2013 | Jul. 15, 2013 | Dec. 31, 2012 | Apr. 23, 2013 |
In Thousands, unless otherwise specified | Tranzyme Inc. [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | $7,464 |
Accounts and investment tax credits receivable, net | ' | ' | ' | 636 |
Prepaid expenses and other assets | ' | ' | ' | 159 |
Fixed assets | ' | ' | ' | 744 |
Intangible assets | ' | ' | ' | 5,940 |
Goodwill | 917 | 900 | 0 | 917 |
Accounts payable | ' | ' | ' | -1,029 |
Accrued and long-term liabilities | ' | ' | ' | -1,307 |
Total purchase price allocation | ' | ' | ' | $13,524 |
Merger_with_Tranzyme_Intangibl
Merger with Tranzyme (Intangible Assets Acquired) (Details) (USD $) | 9 Months Ended | 0 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 23, 2013 | Apr. 23, 2013 | Apr. 23, 2013 | Apr. 23, 2013 | Apr. 23, 2013 |
Customer Relationships [Member] | Customer Relationships [Member] | Developed Technology [Member] | Tranzyme Inc. [Member] | Tranzyme Inc. [Member] | Tranzyme Inc. [Member] | Tranzyme Inc. [Member] | Tranzyme Inc. [Member] | |
Minimum [Member] | Maximum [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Developed Technology [Member] | |||
Minimum [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | $5,940 | $4,180 | ' | ' | $1,760 |
Useful life | '2 years 3 months | '4 years 9 months | '4 years 9 months | ' | ' | '2 years 6 months | '5 years | '5 years |
Merger_with_Tranzyme_Pro_Forma
Merger with Tranzyme (Pro Forma Information) (Details) (Tranzyme Inc. [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Tranzyme Inc. [Member] | ' | ' | ' | ' |
Business Acquisition, Contingent Consideration [Line Items] | ' | ' | ' | ' |
Licensing and royalty revenue | $200 | $1,819 | $1,692 | $6,838 |
Net loss | ($6,753) | ($5,042) | ($13,146) | ($21,673) |
Net loss per share, basic and diluted (usd per share) | ($0.60) | ($0.45) | ($1.16) | ($1.92) |
Goodwill_and_acquired_intangib2
Goodwill and acquired intangible assets (Details) (USD $) | Sep. 30, 2013 | Jul. 15, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Customer Relationships [Member] | Customer Relationships [Member] | Customer Relationships [Member] | Developed Technology [Member] | ||||
Minimum [Member] | Maximum [Member] | ||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $917,000 | $900,000 | $0 | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Gross | 5,940,000 | ' | ' | 4,180,000 | ' | ' | 1,760,000 |
Accumulated Amortization and Impairments | -1,841,000 | ' | ' | -1,768,000 | ' | ' | -73,000 |
Net | 4,099,000 | ' | ' | 2,412,000 | ' | ' | 1,687,000 |
Useful life | ' | ' | ' | ' | '2 years 3 months | '4 years 9 months | '4 years 9 months |
Finite-Lived Intangible Assets Amortization Expense by Fiscal Year Maturity | ' | ' | ' | ' | ' | ' | ' |
Remainder of 2013 | 200,000 | ' | ' | ' | ' | ' | ' |
2014 | 900,000 | ' | ' | ' | ' | ' | ' |
2015 | 900,000 | ' | ' | ' | ' | ' | ' |
2016 | 800,000 | ' | ' | ' | ' | ' | ' |
2017 | 800,000 | ' | ' | ' | ' | ' | ' |
2018 | $400,000 | ' | ' | ' | ' | ' | ' |
Restructuring_of_Tranzyme_Phar2
Restructuring of Tranzyme Pharma Inc. (Details) (USD $) | 3 Months Ended | 9 Months Ended | 105 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
position | |||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Positions eliminated | ' | ' | 17 | ' | ' |
Restructuring charges | $742,000 | $0 | $742,000 | $0 | $742,000 |
Cash payments and other settlements | ' | ' | 0 | ' | ' |
Restructuring Reserve | 742,000 | ' | 742,000 | ' | 742,000 |
Minimum [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 900,000 | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 1,100,000 | ' | ' |
Post-Employment Benefits [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Restructuring charges | ' | ' | 708,000 | ' | ' |
Cash payments and other settlements | ' | ' | 0 | ' | ' |
Restructuring Reserve | 708,000 | ' | 708,000 | ' | 708,000 |
Post-Employment Benefits [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 700,000 | ' | ' |
Post-Employment Benefits [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 800,000 | ' | ' |
Operating Activities [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Restructuring charges | ' | ' | 34,000 | ' | ' |
Cash payments and other settlements | ' | ' | 0 | ' | ' |
Restructuring Reserve | 34,000 | ' | 34,000 | ' | 34,000 |
Operating Activities [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 100,000 | ' | ' |
Operating Activities [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 200,000 | ' | ' |
Other liabilities [Member] | ' | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' |
Estimated to be incurred | ' | ' | 100,000 | ' | ' |
Restructuring charges | ' | ' | 0 | ' | ' |
Cash payments and other settlements | ' | ' | 0 | ' | ' |
Restructuring Reserve | $0 | ' | $0 | ' | $0 |
Impairment_of_Intangible_Asset1
Impairment of Intangible Asset (Details) (Bristol-Myers Squibb Company [Member], Licensing Agreements [Member], USD $) | 3 Months Ended |
Sep. 30, 2013 | |
compound | |
Bristol-Myers Squibb Company [Member] | Licensing Agreements [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Expected developments to be terminated | 1 |
Developments underway | 2 |
Expected undiscounted cash flow | $0 |
Impairment rate of intangible | 50.00% |
Impairment charge | $1,600,000 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Oct. 02, 2012 | Nov. 08, 2013 | Nov. 08, 2013 | Nov. 08, 2013 | Nov. 08, 2013 |
In Millions, except Share data, unless otherwise specified | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |
Warrants [Member] | Common Stock [Member] | Common Stock [Member] | |||
Warrants [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Units issued for stock and warrants | ' | 3,940,887 | ' | 3,940,887 | ' |
Value of units issued | ' | $28 | ' | ' | ' |
Shares of common stock issued for each unit | ' | ' | ' | 1 | ' |
Shares of common stock issuable per warrant | ' | ' | ' | ' | 0.2 |
Exercise price of warrants | 0.67 | ' | 7.663 | ' | ' |
Aggregate shares of common stock issuable under warrants | ' | ' | ' | ' | 788,177 |