Ocera Therapeutics 10-Q 2 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Ocera Therapeutics, Inc.
Entity Central Index Key	1,274,644
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		23,143,938

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 29,215	$ 35,921
Short-term investments, available-for-sale	3,249	7,415
Prepaid expenses and other current assets	773	686
Total current assets	33,237	44,022
Property and equipment, net	63	94
Deposits	36	26
Goodwill	595	595
Total assets	33,931	44,737
Current liabilities:
Accounts payable	2,055	701
Accrued liabilities	3,255	3,133
Notes payable - short term	1,963	0
Total current liabilities	7,273	3,834
Notes payable - long term	7,689	9,508
Other liabilities	123	1
Total liabilities	15,085	13,343
Stockholders' equity:
Preferred stock - $0.00001 par value, 5,000,000 shares authorized and no shares issued or outstanding.	0	0
Common stock - $0.00001 par value, 100,000,000 shares authorized, 23,075,831 issued and outstanding at September 30, 2016 and 20,695,160 shares issued and outstanding at December 31, 2015.	0	0
Additional paid-in capital	172,022	162,832
Accumulated other comprehensive loss	(1)	(5)
Accumulated deficit	(153,175)	(131,433)
Total stockholders' equity	18,846	31,394
Total liabilities and stockholders' equity	$ 33,931	$ 44,737

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	23,075,831	20,695,160
Common stock, shares, outstanding (in shares)	23,075,831	20,695,160

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Royalty revenue	$ 38	$ 35	$ 97	$ 109
Operating expenses:
Research and development	4,283	4,235	12,939	12,050
General and administrative	2,618	2,372	8,142	7,460
Amortization of intangibles	0	41	0	123
Total operating expenses	6,901	6,648	21,081	19,633
Other (expense) income:
Interest and other income	20	23	83	71
Interest and other expense	(282)	(203)	(841)	(213)
Other (expense) income, net	(262)	(180)	(758)	(142)
Net loss from continuing operations	(7,125)	(6,793)	(21,742)	(19,666)
Net income from discontinued operations (See Note 8)	0	219	0	219
Net loss	$ (7,125)	$ (6,574)	$ (21,742)	$ (19,447)
Net loss per share:
Net loss per share from continuing operations, basic and diluted (in usd per share)	$ (0.32)	$ (0.34)	$ (1.01)	$ (0.99)
Net income per share from discontinued operations, basic and diluted (in usd per share)	0	0.01	0	0.01
Net loss per share, basic and diluted (in usd per share)	$ (0.32)	$ (0.33)	$ (1.01)	$ (0.98)
Weighted average number of shares used to compute net loss per share of common stock, basic and diluted (in shares)	22,096,610	20,183,939	21,532,953	19,902,815
Comprehensive loss:
Net loss	$ (7,125)	$ (6,574)	$ (21,742)	$ (19,447)
Unrealized (loss) gain on investments	(1)	4	4	30
Comprehensive loss	$ (7,126)	$ (6,570)	$ (21,738)	$ (19,417)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities
Net loss	$ (21,742)	$ (19,447)
Adjustments to reconcile net loss to net cash used in operating activities:
Net income from discontinued operations	0	(219)
Depreciation	34	23
Amortization of intangibles	0	123
Stock-based compensation	3,168	2,860
Amortization of premium on marketable securities	40	321
Amortization of debt discount	144	31
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(97)	354
Accounts payable	1,354	73
Accrued and other liabilities	244	531
Net cash used in continuing operating activities	(16,855)	(15,131)
Net cash provided by discontinued operating activities	0	219
Net cash used in continuing operating activities	(16,855)	(15,350)
Investing activities
Purchases of property and equipment	(3)	(71)
Purchases of marketable securities	(7,004)	(23,320)
Proceeds from maturities of marketable securities	11,134	38,952
Deposits on equipment	0	(18)
Net cash provided by investing activities	4,127	15,543
Financing activities
Proceeds from sale of common stock, net of underwriting discounts and issuance cost	5,996	2,480
Proceeds from notes payable, net	0	9,748
Proceeds from exercise of common stock options	26	0
Net cash provided by financing activities	6,022	12,228
Net (decrease) increase in cash and cash equivalents	(6,706)	12,640
Cash and cash equivalents—beginning of period	35,921	10,127
Cash and cash equivalents—end of period	29,215	22,767
Supplemental disclosures of cash flow information
Cash paid for interest	621	71
Supplemental schedule of noncash investing and financing activities
Fair value of warrants issued in connection with notes payable	0	317
Issuance costs related to at the market equity program in accounts payable and accrued expenses	0	23
Unrealized gain on investments	$ 4	$ 30

The Company

The Company	9 Months Ended
	Sep. 30, 2016
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 drug designation and Fast Track status by the U.S. Food and Drug Administration for the treatment of hyperammonemia and resultant hepatic encephalopathy in patients with liver cirrhosis, acute liver failure and acute-on-chronic liver disease. 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 was considered the acquiring company in the Merger for accounting purposes. 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. (“Ocera Subsidiary”). 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. The Company has a limited operating history and the sales and income potential of the Company's business and market are unproven. As of September 30, 2016 , the Company has incurred losses since inception of $ 153.2 million . The Company anticipates that it will continue to incur net losses into the foreseeable future as it continues its efforts to develop and commercialize OCR-002 and as it expands its corporate infrastructure. Based on the Company's current operating plan, the Company believes its working capital is sufficient to fund its operations through at least the next twelve months.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiary have been prepared in accordance with United States of America generally accepted accounting principles ("U.S. GAAP") for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. This quarterly report should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2015. Unaudited Interim Financial Information The accompanying condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. Use of Estimates The preparation of financial statements in conformity with U.S. 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. Investments in Marketable Securities All investments in marketable securities have been classified as "available-for-sale" and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Unrealized gains and losses are excluded from earnings and are reported as a component of accumulated comprehensive income. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on investments in marketable securities are included in interest and other income (expense), net. The cost of securities sold is based on the specific-identification method. Interest earned on investments in marketable securities is included in interest and other income. 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 the Company 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 the Company's condensed consolidated financial statements upon adoption. Recent Accounting Updates Not Yet Effective In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, Classification of Certain Cash Receipts and Cash Payments, which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments. This ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this ASU is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The new standard simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. This guidance should be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year in which the amendments are effective, and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation. The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will become effective for the Company beginning in the first quarter of 2018. Early adoption is permitted in 2017. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. In March and April 2016, the FASB issued ASU 2016-08 Revenue From Contracts With Customers : Principal vs. Agent Considerations and ASU 2016-10 Revenue From Contracts with Customers: Identifying Performance Obligations and Licensing to provide supplemental adoption guidance and clarification to ASU 2014-09. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amounts of certain of the Company's financial instruments, including cash and cash equivalents, prepaid expenses and other current assets, accounts payable, and accrued liabilities and deferred revenue, approximate their fair value due to their short maturities. Short-term and long-term debt are reported at their respective amortized cost on its condensed consolidated balance sheets. The remaining financial instruments are reported on its condensed consolidated balance sheets at amounts that approximate current fair values. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2016 , and December 31, 2015, 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: Inputs which include quoted prices in active markets for identical assets or liabilities; Level 2: Inputs, other than level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs that are supported by little or no market activity, which require the reporting entity to develop its own assumptions. None of the Company’s non-financial assets and liabilities are recorded at fair value on a non-recurring basis. No transfers between fair value hierarchy levels have occurred during the periods presented. Assets measured at fair value on a recurring basis as of September 30, 2016 consisted of the following (in thousands): Balance as of September 30, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds $ 28,599 $ 28,599 $ — $ — Commercial paper 1,493 — 1,493 — Corporate debt securities 3,008 — 3,008 — $ 33,100 $ 28,599 $ 4,501 $ — Assets measured at fair value on a recurring basis as of December 31, 2015 consisted of the following (in thousands): Balance as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds $ 34,806 $ 34,806 $ — $ — Corporate debt securities 7,415 — 7,415 — $ 42,221 $ 34,806 $ 7,415 $ — The Company estimates the fair value of commercial paper and corporate debt securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment or default projections based on historical data; and other observable inputs. The estimated fair value of the Company's notes payable, considering level 2 inputs, approximates their carrying value based upon the borrowing terms and conditions currently available to the Company.

Balance Sheet Components

Balance Sheet Components	9 Months Ended
	Sep. 30, 2016
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Balance Sheet Components Investments in Marketable Securities The following table summarizes the Company's available for sale investments as of September 30, 2016 (in thousands): Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Short-term investments: Commercial paper 1 or less $ 1,493 $ — $ — $ 1,493 Corporate debt securities 1 or less 1,757 — (1 ) 1,756 Total short-term investments $ 3,250 $ — $ (1 ) $ 3,249 The following table summarizes the Company's available for sale investments as of December 31, 2015 (in thousands): Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Short-term investments: Corporate debt securities 1 or less $ 7,420 $ — $ (5 ) $ 7,415 Total short-term investments $ 7,420 $ — $ (5 ) $ 7,415 At each reporting date, the Company reviews its investments for impairment to determine if unrealized losses are other-than-temporary. For debt securities, management determines whether it intends to sell the impaired securities, and if there is no intent or expected requirement to sell, management considers whether it is likely that the amortized cost will be recovered. The Company does not consider unrealized losses on its debt investment securities to be credit-related. These unrealized losses relate to changes in interest rates and market spreads subsequent to purchase. The Company has not made a decision to sell securities with unrealized losses and believes it is more likely than not that it would not be required to sell such securities before recovery of its amortized cost. There have been no other-than-temporary losses recognized in earnings in any of the periods presented. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): September 30, December 31, 2016 2015 Clinical trials $ 2,152 $ 1,666 Compensation and related expenses 832 993 Professional services 194 319 Interest expense and other 77 155 Total accrued liabilities $ 3,255 $ 3,133

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Notes Payable	Notes Payable On July 30, 2015, the Company and Ocera Subsidiary entered into a Loan and Security Agreement (the “Loan Agreement”) with Oxford Finance LLC (“Oxford”) and Silicon Valley Bank (“SVB”) (collectively, the “Lenders”). The Loan Agreement provides for up to $20.0 million in new term loans (the “Term Loan Facility”), $ 10.0 million of which was funded on July 30, 2015. The remaining $10.0 million is available for draw until December 31, 2016 at the Company’s discretion, subject to achievement of certain financial and clinical milestones. The milestones will be satisfied if the Company (a) has raised proceeds of at least $15.0 million from the sale of equity securities or upfront payments from a partnership agreement and (b) achieved positive data from its ongoing Phase 2b clinical trial of OCR-002. The annual interest rate for the initial $10.0 million funding is 8.275% , and the interest rate for the second tranche will be fixed upon drawdown at an annual rate that is greater of 8.275% or 8.085% plus the 30-day U.S. LIBOR rate. Loan payments are interest-only until February 1, 2017, followed by 30 equal monthly payments of principal and interest through the scheduled maturity date of August 1, 2019 if the second tranche is not drawn. If the second tranche is drawn, the interest-only period continues to August 1, 2017, followed by 24 equal monthly payments. In addition, a final payment equal to 3% of the aggregate amount drawn will be due at maturity or on earlier repayment. If the Company prepays all or a portion of the loans, a prepayment fee of between 1% and 3 % of the principal amount prepaid will also be due depending on the timing of the prepayment. At the initial funding, the Company received net proceeds of $9.7 million after fees and expenses. These fees and expenses are being accounted for as a debt discount and classified within notes payable on the Company’s condensed consolidated balance sheet. Legal and consulting fees are presented in the condensed consolidated balance sheet as a direct deduction from the carrying amount of the notes liability, consistent with debt discounts. Debt discounts, issuance costs and the final payment are being amortized or accreted as interest expense over the term of the loan using the effective interest method. In connection with the Loan Agreement, the Company issued the Lenders warrants to purchase an aggregate of 97,680 shares of the Company's common stock at an exercise price of $4.095 per share. The Company recorded $0.3 million for the warrants as debt discount within notes payable and an increase to additional paid-in capital on the Company’s condensed consolidated balance sheet. As of September 30, 2016, the warrants remained outstanding and exercisable. The debt discount is being amortized as interest expense over the term of the Term Loan Facility using the effective interest method. The Term Loan Facility is secured by substantially all of the assets of the Company and its subsidiaries, except that the collateral does not include any intellectual property held by the Company or its subsidiary. However, the Company has agreed not to encumber any of the intellectual property of the Company or its subsidiary. The Loan Agreement contains customary representations, warranties and covenants by the Company, and customary indemnification obligations and events of default. The Company was in compliance with all covenants set forth in the Loan Agreement as of September 30, 2016 . The Company recorded interest expense related to the Term Loan Facility of $0.3 million for the three months ended September 30, 2016 , and $0.8 million for the nine months ended September 30, 2016 . The Company recorded $0.2 million of interest expense for the three and the nine months ended September 30, 2015. The annual effective interest rate on the note payable, including the amortization of the debt discounts and accretion of the final payments, is 11.72% . Future minimum payments under the Loan Agreement as of September 30, 2016 are as follows ( in thousands): Years ending December 31: 2016 (remaining three months) $ 207 2017 3,839 2018 4,442 2019 3,261 Total future minimum payments 11,749 Less amount representing interest 1,749 Notes payable, gross 10,000 Unamortized discount on notes payable (348 ) Notes payable, balance 9,652 Less current portion of notes payable 1,963 Non-current portion of notes payable $ 7,689

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity On May 15, 2015, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company may issue and sell shares of its common stock having aggregate sales proceeds of up to $25.0 million from time to time through an “at the market” equity program under which Cowen acts as sales agent. During the nine months ended September 30, 2016 , the Company sold an aggregate of 2,340,980 shares of common stock under the Sales Agreement, at an average price of approximately $2.68 per share, for gross proceeds of $6.3 million and net proceeds of $6.0 million after deducting commissions and other transactions costs. During the nine months ended September 30, 2015, proceeds from issuance of common stock under the Sales Agreement were $2.5 million after deducting commissions and other transaction costs. As of September 30, 2016 , $15.0 million of common stock remained available to be sold under the Sales Agreement, subject to certain conditions specified therein. In September 2016, the Company issued 15,753 shares of common stock pursuant to the cashless exercise of certain warrants at an exercise price of $0.67 price per share.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company’s stock option awards activity and related information for the nine months ended September 30, 2016 were as follows (in thousands, except share and per share data): Weighted-avg. Shares Weighted-avg. Remaining Aggregate Available Stock Options Exercise Price Contractual Intrinsic for Grant Outstanding Per Share Life (in Years) Value Balance at December 31, 2015 1,299,301 2,429,511 $ 7.00 8.01 $ 287 Additional shares authorized 1,400,000 — Stock options granted (1,537,000 ) 1,537,000 $ 2.94 Stock options canceled 354,951 (354,951 ) $ 7.00 Stock options exercised — (23,938 ) $ 1.09 Balance at September 30, 2016 1,517,252 3,587,622 $ 5.30 7.88 $ 230 At September 30, 2016: Vested and expected to vest 3,474,777 $ 5.36 7.84 $ 228 Exercisable 1,532,114 $ 7.16 6.48 $ 187 The aggregate intrinsic value of options exercised under all option plans was $42,000 for the nine months ended September 30, 2016 determined as of the date of option exercise. No options were exercised during the nine months ended September 30, 2015. The Company recognized stock-based compensation expense within the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Research and development $ 139 $ 192 $ 516 $ 456 General and administrative 864 766 2,652 2,404 Total $ 1,003 $ 958 $ 3,168 $ 2,860 At September 30, 2016 , there were 111,000 unvested options outstanding with performance conditions related to the achievement of certain clinical milestones. During the three and nine months ended September 30, 2016 , stock-based compensation expense recorded for theses performance-based options was insignificant to the interim condensed consolidated financial statements. In April 2016, the Company’s board of directors approved an amendment and restatement of the Company’s Fourth Amended and Restated 2011 Stock Option and Incentive Plan (the “2011 Plan”) to, among other things, increase the maximum number of shares that may be issued under the 2011 Plan from 3,602,328 to 5,002,328 shares. The amendment and restatement of the 2011 Plan was approved by the Company’s stockholders on June 14, 2016 . As of September 30, 2016 , there was unrecognized stock-based compensation expense of $6.2 million related to stock options. The Company expects to recognize those costs over a weighted average period of 2.16 years. Stock-based compensation expense for stock options is estimated at the grant date based on the fair value using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of all stock options granted was estimated using the following ranges of weighted-average assumptions: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Expected dividend yield — — — — Risk-free interest rates 0.59% - 1.39% 1.59% - 1.64% 0.59% - 1.97% 1.52% - 2.08% Expected term in years 0.95 - 4.43 5.52 - 6.08 0.95 - 8.14 5.49 - 8.06 Expected volatility 73% - 87% 78% - 80% 73% - 94% 78% - 92% On January 6, 2016 , the Company granted certain of its executive officers non-qualified stock options to purchase 206,625 shares of the Company’s common stock that vest on a monthly basis in equal installments over 48 months following the grant date if the Company's stock price equals or exceeds $6.00 for 20 consecutive trading days on or before June 30, 2017 . The options expire ten years from the date of the grant. The fair values of these options were determined using a Monte Carlo simulation model incorporating the following ranges of weighted-average assumptions: Nine Months Ended Expected dividend yield — Risk-free interest rates 1.82% - 2.05% Expected term in years 6.02 - 8.00 Expected volatility 77% - 89% Weighted-average fair value per share 1.33 - 1.42 The estimated expense for these awards is being recognized on an accelerated basis over the estimated requisite service period, with no adjustments in the future periods based upon the Company's actual common stock price. The Company recorded $0.1 million in stock-based compensation expense during the nine months ended September 30, 2016 in connection with such awards. Stock-based compensation expense related to these awards was insignificant during the three months ended September 30, 2016 .

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Discontinued Operations On September 11, 2013, the Company announced a restructuring plan related to the operations of Tranzyme Pharma Inc. (“Tranzyme Pharma”). On December 13, 2013, the Company entered into a Technology Transfer and License Agreement with Genentech, Inc. ("Genentech"), and F. Hoffman-La Roche, Ltd. ("Roche") to sell certain Canadian fixed assets and materials, the MATCH technology and rights to the Genentech and Roche customer agreements and related intellectual property through licensing of patents for $4.0 million . The Company concluded that the operations of Tranzyme Pharma and related asset groups sold to Genentech and Roche would be accounted for as discontinued operations as the operations and cash flows of the discontinued component or asset group would be eliminated from ongoing operations of the Company and there would not be significant involvement in the component or asset group after the disposal transaction. In 2014, the Company completed its obligations under the Technology Transfer and License Agreement with Genentech and Roche and recognized a gain on disposal of assets of $1.1 million within discontinued operations. There was $0.2 million in income recorded in discontinued operations for the three and nine months ended September 30, 2015 that relates to certain foreign research credits received.

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
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. Potentially dilutive securities which include warrants and outstanding stock options have been excluded from the computation of diluted net loss per share as the effect of their inclusion would be anti-dilutive. For all periods presented, diluted and basic net loss per share were identical due to the Company’s net loss position. The following table presents the computation of net loss per share (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerator Net loss from continuing operations $ (7,125 ) $ (6,793 ) $ (21,742 ) $ (19,666 ) Net income from discontinued operations — 219 — 219 Net loss $ (7,125 ) $ (6,574 ) $ (21,742 ) $ (19,447 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 22,096,610 20,183,939 21,532,953 19,902,815 Net loss per share of common stock, basic and diluted Net loss per share from continuing operations $ (0.32 ) $ (0.34 ) $ (1.01 ) $ (0.99 ) Net income per share from discontinued operations — 0.01 — 0.01 Net loss per share $ (0.32 ) $ (0.33 ) $ (1.01 ) $ (0.98 ) The following weighted average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as the effect of their inclusion would have been anti-dilutive: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Common stock warrants 1,021,651 997,839 1,024,705 954,345 Common stock options 3,646,426 2,340,054 3,652,762 2,134,428 Total 4,668,077 3,337,893 4,677,467 3,088,773 The Company has utilized the control number concept in the computation of diluted earnings per share to determine whether potential common stock instruments are dilutive. The control number used is loss from continuing operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories. Therefore, no dilutive effect has been recognized in the calculation of income from discontinued operations per share for the three and nine months ended September 30, 2015.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Pursuant to the Company's "at the market" equity program, since September 30, 2016, the Company has sold an aggregate of 68,107 shares of common stock under the Sales Agreement at an average price of approximately $2.60 per share for gross proceeds of approximately $0.2 million . In September 2014, the Company entered into an asset license and purchase agreement for the sale and license of ulimorelin (the “Lyric Agreement”), the former lead compound of Tranzyme, to Lyric Pharmaceuticals, Inc. (“Lyric”). In October 2016, Lyric achieved a milestone under the Lyric Agreement, and accordingly, the Company will record $0.1 million in related milestone revenue during the fourth quarter of 2016. In October 2016, the Company assigned its rights to certain non-core intellectual property acquired in the Merger with Tranzyme to GE Healthcare Dharmacon, Inc. (“GE”), formerly known as Open Biosystems, Inc. In connection with the assignment, the Company’s existing license and marketing agreement with GE terminated and all future royalty payments payable from GE to the Company will cease. In consideration for the assignment, the Company will receive a one-time payment of $0.5 million from GE.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiary have been prepared in accordance with United States of America generally accepted accounting principles ("U.S. GAAP") for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. This quarterly report should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2015.
Consolidation	Unaudited Interim Financial Information The accompanying condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. 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.
Short-term investments	Investments in Marketable Securities All investments in marketable securities have been classified as "available-for-sale" and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Unrealized gains and losses are excluded from earnings and are reported as a component of accumulated comprehensive income. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on investments in marketable securities are included in interest and other income (expense), net. The cost of securities sold is based on the specific-identification method. Interest earned on investments in marketable securities is included in interest and other income
New 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 the Company 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 the Company's condensed consolidated financial statements upon adoption. Recent Accounting Updates Not Yet Effective In August 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-15, Classification of Certain Cash Receipts and Cash Payments, which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments. This ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this ASU is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The new standard simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. This guidance should be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year in which the amendments are effective, and is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), Compensation - Stock Compensation. The new guidance simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees' maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will become effective for the Company beginning in the first quarter of 2018. Early adoption is permitted in 2017. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. In March and April 2016, the FASB issued ASU 2016-08 Revenue From Contracts With Customers : Principal vs. Agent Considerations and ASU 2016-10 Revenue From Contracts with Customers: Identifying Performance Obligations and Licensing to provide supplemental adoption guidance and clarification to ASU 2014-09. The Company is currently evaluating the impact that the adoption of this standard will have on its condensed consolidated financial statements.
Earnings 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. Potentially dilutive securities which include warrants and outstanding stock options have been excluded from the computation of diluted net loss per share as the effect of their inclusion would be anti-dilutive.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	Assets measured at fair value on a recurring basis as of September 30, 2016 consisted of the following (in thousands): Balance as of September 30, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds $ 28,599 $ 28,599 $ — $ — Commercial paper 1,493 — 1,493 — Corporate debt securities 3,008 — 3,008 — $ 33,100 $ 28,599 $ 4,501 $ — Assets measured at fair value on a recurring basis as of December 31, 2015 consisted of the following (in thousands): Balance as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds $ 34,806 $ 34,806 $ — $ — Corporate debt securities 7,415 — 7,415 — $ 42,221 $ 34,806 $ 7,415 $ —

Balance Sheet Components (Table

Balance Sheet Components (Tables)	9 Months Ended
	Sep. 30, 2016
Balance Sheet Related Disclosures [Abstract]
Available-for-sale Securities	The following table summarizes the Company's available for sale investments as of September 30, 2016 (in thousands): Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Short-term investments: Commercial paper 1 or less $ 1,493 $ — $ — $ 1,493 Corporate debt securities 1 or less 1,757 — (1 ) 1,756 Total short-term investments $ 3,250 $ — $ (1 ) $ 3,249 The following table summarizes the Company's available for sale investments as of December 31, 2015 (in thousands): Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Short-term investments: Corporate debt securities 1 or less $ 7,420 $ — $ (5 ) $ 7,415 Total short-term investments $ 7,420 $ — $ (5 ) $ 7,415
Schedule of Accrued Liabilities	Accrued liabilities consisted of the following (in thousands): September 30, December 31, 2016 2015 Clinical trials $ 2,152 $ 1,666 Compensation and related expenses 832 993 Professional services 194 319 Interest expense and other 77 155 Total accrued liabilities $ 3,255 $ 3,133

Notes Payable (Tables)

Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Future minimum payments under the Loan Agreement as of September 30, 2016 are as follows ( in thousands): Years ending December 31: 2016 (remaining three months) $ 207 2017 3,839 2018 4,442 2019 3,261 Total future minimum payments 11,749 Less amount representing interest 1,749 Notes payable, gross 10,000 Unamortized discount on notes payable (348 ) Notes payable, balance 9,652 Less current portion of notes payable 1,963 Non-current portion of notes payable $ 7,689

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of stock option activity	The Company’s stock option awards activity and related information for the nine months ended September 30, 2016 were as follows (in thousands, except share and per share data): Weighted-avg. Shares Weighted-avg. Remaining Aggregate Available Stock Options Exercise Price Contractual Intrinsic for Grant Outstanding Per Share Life (in Years) Value Balance at December 31, 2015 1,299,301 2,429,511 $ 7.00 8.01 $ 287 Additional shares authorized 1,400,000 — Stock options granted (1,537,000 ) 1,537,000 $ 2.94 Stock options canceled 354,951 (354,951 ) $ 7.00 Stock options exercised — (23,938 ) $ 1.09 Balance at September 30, 2016 1,517,252 3,587,622 $ 5.30 7.88 $ 230 At September 30, 2016: Vested and expected to vest 3,474,777 $ 5.36 7.84 $ 228 Exercisable 1,532,114 $ 7.16 6.48 $ 187
Stock-based compensation expense	The Company recognized stock-based compensation expense within the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Research and development $ 139 $ 192 $ 516 $ 456 General and administrative 864 766 2,652 2,404 Total $ 1,003 $ 958 $ 3,168 $ 2,860
Stock option valuation assumptions	The fair values of these options were determined using a Monte Carlo simulation model incorporating the following ranges of weighted-average assumptions: Nine Months Ended Expected dividend yield — Risk-free interest rates 1.82% - 2.05% Expected term in years 6.02 - 8.00 Expected volatility 77% - 89% Weighted-average fair value per share 1.33 - 1.42 The fair value of all stock options granted was estimated using the following ranges of weighted-average assumptions: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Expected dividend yield — — — — Risk-free interest rates 0.59% - 1.39% 1.59% - 1.64% 0.59% - 1.97% 1.52% - 2.08% Expected term in years 0.95 - 4.43 5.52 - 6.08 0.95 - 8.14 5.49 - 8.06 Expected volatility 73% - 87% 78% - 80% 73% - 94% 78% - 92%

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [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 Ended Nine Months Ended 2016 2015 2016 2015 Numerator Net loss from continuing operations $ (7,125 ) $ (6,793 ) $ (21,742 ) $ (19,666 ) Net income from discontinued operations — 219 — 219 Net loss $ (7,125 ) $ (6,574 ) $ (21,742 ) $ (19,447 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 22,096,610 20,183,939 21,532,953 19,902,815 Net loss per share of common stock, basic and diluted Net loss per share from continuing operations $ (0.32 ) $ (0.34 ) $ (1.01 ) $ (0.99 ) Net income per share from discontinued operations — 0.01 — 0.01 Net loss per share $ (0.32 ) $ (0.33 ) $ (1.01 ) $ (0.98 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Common stock warrants 1,021,651 997,839 1,024,705 954,345 Common stock options 3,646,426 2,340,054 3,652,762 2,134,428 Total 4,668,077 3,337,893 4,677,467 3,088,773

The Company (Details)

The Company (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (153,175)	$ (131,433)

Fair Value Measurements (Fair V

Fair Value Measurements (Fair Value) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 33,100	$ 42,221
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	28,599	34,806
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	4,501	7,415
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	28,599	34,806
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	28,599	34,806
Money market funds | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Money market funds | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,493
Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0
Commercial paper | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,493
Commercial paper | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	3,008	7,415
Corporate debt securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Corporate debt securities | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	3,008	7,415
Corporate debt securities | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 0	$ 0

Balance Sheet Components (Avail

Balance Sheet Components (Available For Sale Investments) (Details) - Short-term Investments - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 3,250	$ 7,420
Unrealized Gains	0	0
Unrealized Losses	(1)	(5)
Estimated Fair Value	3,249	7,415
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,493
Unrealized Gains	0
Unrealized Losses	0
Estimated Fair Value	1,493
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,757	7,420
Unrealized Gains	0	0
Unrealized Losses	(1)	(5)
Estimated Fair Value	$ 1,756	$ 7,415

Balance Sheet Components (Accru

Balance Sheet Components (Accrued Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Balance Sheet Related Disclosures [Abstract]
Clinical trials	$ 2,152	$ 1,666
Compensation and related expenses	832	993
Professional services	194	319
Interest expense and other	77	155
Total accrued liabilities	$ 3,255	$ 3,133

Notes Payable (Narrative) (Deta

Notes Payable (Narrative) (Details) - USD ($)	Jul. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Oxford Finance LLC and Silicon Valley Bank
Debt Instrument [Line Items]
Interest expense		$ 300,000	$ 200,000	$ 800,000	$ 200,000
Effective interest rate (in percentage)		11.72%		11.72%
Notes Payable | Secured Debt | Oxford Finance LLC and Silicon Valley Bank
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity	$ 20,000,000
Notes payable, gross	10,000,000	$ 10,000,000		$ 10,000,000
Remaining borrowing capacity	10,000,000
Proceeds from sale of equity	$ 15,000,000
Stated interest rate ( in percentage)	8.275%
Periodic payment terms, balloon payment to be paid, percentage of funded borrowings (in percentage)	3.00%
Proceeds from debt, net of issuance costs	$ 9,700,000
Notes Payable | Secured Debt | Oxford Finance LLC and Silicon Valley Bank | Minimum
Debt Instrument [Line Items]
Early extinguishment of debt, prepayment fee (in percentage)	1.00%
Notes Payable | Secured Debt | Oxford Finance LLC and Silicon Valley Bank | Maximum
Debt Instrument [Line Items]
Early extinguishment of debt, prepayment fee (in percentage)	3.00%
Notes Payable | Secured Debt | Oxford Finance LLC and Silicon Valley Bank | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate (in percentage)	8.085%
Common stock warrants
Debt Instrument [Line Items]
Warrants issued (in shares)	97,680
Exercise price of warrants (usd per share)	$ 4.095
Warrants outstanding		$ 300,000		$ 300,000

Notes Payable (Schedule of Long

Notes Payable (Schedule of Long Term Debt Instruments) (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Jul. 30, 2015
Debt Instrument [Line Items]
Less amount representing interest	$ 77,000	$ 155,000
Oxford Finance LLC and Silicon Valley Bank | Secured Debt | Notes Payable
Debt Instrument [Line Items]
2016 (remaining three months)	207,000
2,017	3,839,000
2,018	4,442,000
2,019	3,261,000
Total future minimum payments	11,749,000
Less amount representing interest	1,749,000
Notes payable, gross	10,000,000		$ 10,000,000
Unamortized discount on notes payable	(348,000)
Notes payable, balance	9,652,000
Less current portion of notes payable	1,963,000
Non-current portion of notes payable	$ 7,689,000

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	1 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	May 15, 2015
Class of Stock [Line Items]
Stock issued during period, shares, new issues (in shares)		2,340,980
Common stock, par value, average (usd per share)	$ 2.68	$ 2.68
Proceeds from issuance of common stock		$ 6,300,000
Proceeds from sale of common stock, net of underwriting discounts and issuance cost		5,996,000	$ 2,480,000
At the Market Issuance Sales Agreement [Member] | Cowen [Member]
Class of Stock [Line Items]
Common stock remained available to be sold under the sales agreement	$ 15,000,000	$ 15,000,000		$ 25,000,000
Common stock
Class of Stock [Line Items]
Stock issued during period, shares, new issues (in shares)	15,753
Exercise price of warrants (usd per share)	$ 0.67	$ 0.67

Stock-Based Compensation (Stock

Stock-Based Compensation (Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Shares available for grant (in shares)	1,299,301
Additional shares authorized (in shares)	1,400,000
Stock options granted (in shares)	(1,537,000)
Stock options canceled (in shares)	354,951
Shares available for grant (in shares)	1,517,252	1,299,301
Stock Options Outstanding
Beginning balance, options (in shares)	2,429,511
Stock options granted (in shares)	1,537,000
Stock options canceled (in shares)	(354,951)
Stock options exercised (in shares)	(23,938)
Ending balance, options (in shares)	3,587,622	2,429,511
Stock options vested and expected to vest (in shares)	3,474,777
Stock options exercisable (in shares)	1,532,114
Weighted-average Exercise Price Per Share
Weighted-average exercise price, options outstanding (in usd per share)	$ 7
Grants in period (in usd per share)	2.94
Canceled in period (in usd per share)	7
Exercises in period (in usd per share)	1.09
Weighted-average exercise price, options outstanding (in usd per share)	5.30	$ 7
Weighted-average exercise price, options exercisable (in usd per share)	5.36
Weighted-average exercise price, options vested and expected to vest (in usd per share)	$ 7.16
Weighted-average remaining contractual life, options outstanding (in years)	7 years 10 months 17 days	8 years 4 days
Weighted-average remaining contractual life, options vested and expected to vest (in years)	7 years 10 months 2 days
Weighted-average remaining contractual life, options exercisable (in years)	6 years 5 months 23 days
Aggregate Intrinsic value, options outstanding	$ 230	$ 287
Aggregate Intrinsic value, options vested and expected to vest	228
Aggregate Intrinsic value, options exercisable	$ 187

Stock-Based Compensation (Sto30

Stock-Based Compensation (Stock-based compensation expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,003	$ 958	$ 3,168	$ 2,860
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	139	192	516	456
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 864	$ 766	$ 2,652	$ 2,404

Stock-Based Compensation (Valua

Stock-Based Compensation (Valuation Assumptions) (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Common stock options
Fair Value Assumptions and Methodology [Abstract]
Expected dividend yield (in percentage)	0.00%	0.00%	0.00%	0.00%
Risk free interest rate (in percentage)	0.59%	1.59%	0.59%	1.52%
Risk free interest rate, maximum (in percentage)	1.39%	1.64%	1.97%	2.08%
Expected volatility, minimum (in percentage)	73.00%	78.00%	73.00%	78.00%
Expected volatility, maximum (in percentage)	87.00%	80.00%	94.00%	92.00%
Common stock options | Minimum
Fair Value Assumptions and Methodology [Abstract]
Expected life in years (in years)	11 months 12 days	5 years 6 months 7 days	11 months 12 days	5 years 5 months 27 days
Common stock options | Maximum
Fair Value Assumptions and Methodology [Abstract]
Expected life in years (in years)	4 years 5 months 5 days	6 years 29 days	8 years 1 month 21 days	8 years 22 days
Vest On Market Condition [Member] | Non Qualified Stock Option [Member]
Fair Value Assumptions and Methodology [Abstract]
Expected dividend yield (in percentage)			0.00%
Risk free interest rate (in percentage)			1.82%
Risk free interest rate, maximum (in percentage)			2.05%
Expected volatility, minimum (in percentage)			77.00%
Expected volatility, maximum (in percentage)			89.00%
Vest On Market Condition [Member] | Non Qualified Stock Option [Member] | Minimum
Fair Value Assumptions and Methodology [Abstract]
Expected life in years (in years)			6 years 7 days
Weighted average fair vale per share (in usd per share)			$ 1.33
Vest On Market Condition [Member] | Non Qualified Stock Option [Member] | Maximum
Fair Value Assumptions and Methodology [Abstract]
Expected life in years (in years)			8 years
Weighted average fair vale per share (in usd per share)			$ 1.42

Stock-Based Compensation (Addit

Stock-Based Compensation (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands	Jan. 06, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Apr. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options exercised				$ 42
Stock-based compensation expense		$ 1,003	$ 958	$ 3,168	$ 2,860
Number of shares authorized (in shares)						3,602,328
Stock options granted (in shares)				1,537,000
Common stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs not yet recognized		$ 6,200		$ 6,200
Period for recognizing costs (in years)				2 years 1 month 28 days
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested options granted (in shares)		111,000		111,000
Vest On Market Condition [Member] | Non Qualified Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense				$ 138
Stock options granted (in shares)	206,625
Minimum stock price for the options to vest (in usd per share)	$ 6
Minimum stock price for the options to vest, number of consecutive trading days (in days)	20 days
Expiration period (in years)	10 years
2011 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)							5,002,328

Discontinued Operations (Detail

Discontinued Operations (Details) - Tranzyme Pharma Inc - Discontinued Operations, Disposed of by Sale - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014	Dec. 13, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale price for discontinued operations				$ 4
Net gain on disposal of assets			$ 1.1
Income recorded in discontinued operations	$ 0.2	$ 0.2

Net Loss Per Share (Schedule of

Net Loss Per Share (Schedule of Basic and Diluted Loss Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerator
Net loss from continuing operations	$ (7,125)	$ (6,793)	$ (21,742)	$ (19,666)
Net income from discontinued operations	0	219	0	219
Net loss	$ (7,125)	$ (6,574)	$ (21,742)	$ (19,447)
Denominator
Weighted average common shares outstanding used to compute net loss per share, basic and diluted (in shares)	22,096,610	20,183,939	21,532,953	19,902,815
Net loss per share of common stock, basic and diluted
Net loss per share from continuing operations (in usd per share)	$ (0.32)	$ (0.34)	$ (1.01)	$ (0.99)
Net income per share from discontinued operations (in usd per share)	0	0.01	0	0.01
Net loss per share, basic and diluted (in usd per share)	$ (0.32)	$ (0.33)	$ (1.01)	$ (0.98)

Net Loss Per Share (Schedule 35

Net Loss Per Share (Schedule of Antidilutive Securities Excluded From Earnings Per Share) (Details) - Common stock - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,668,077	3,337,893	4,677,467	3,088,773
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,021,651	997,839	1,024,705	954,345
Common stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,646,426	2,340,054	3,652,762	2,134,428

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended	9 Months Ended
	Nov. 03, 2016	Oct. 31, 2016	Dec. 31, 2016	Sep. 30, 2016
Subsequent Event [Line Items]
Stock issued during period, shares, new issues (in shares)				2,340,980
Common stock, par value, average (usd per share)				$ 2.68
Proceeds from issuance of common stock				$ 6.3
Subsequent Event
Subsequent Event [Line Items]
Stock issued during period, shares, new issues (in shares)	68,107
Common stock, par value, average (usd per share)	$ 2.60
Proceeds from issuance of common stock	$ 0.2
Royalty income		$ 0.5
Scenario, Forecast | Subsequent Event
Subsequent Event [Line Items]
Revenue recognized related to milestone			$ 0.1