Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 20, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | VITAL THERAPIES INC | |
Entity Central Index Key | 1,280,776 | |
Trading Symbol | VTL | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,207,376 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 66,391 | $ 59,991 |
Prepaid expenses and other current assets | 1,569 | 1,472 |
Total current assets | 67,960 | 61,463 |
Property and equipment, net | 2,272 | 2,505 |
Other assets | 126 | 58 |
Total assets | 70,358 | 64,026 |
Current liabilities: | ||
Accounts payable | 981 | 780 |
Accrued expenses | 7,167 | 4,656 |
Other current liabilities | 86 | 44 |
Total current liabilities | 8,234 | 5,480 |
Long-term liabilities | 46 | 100 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 20,000,000 authorized and no shares issued or outstanding at September 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.0001 par value; 130,000,000 shares authorized at September 30, 2017 and December 31, 2016; 42,207,376 and 32,143,475 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 4 | 3 |
Additional paid-in capital | 343,351 | 302,185 |
Accumulated other comprehensive income | 88 | 83 |
Accumulated deficit | (281,365) | (243,825) |
Total stockholders’ equity | 62,078 | 58,446 |
Total liabilities and stockholders’ equity | $ 70,358 | $ 64,026 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 130,000,000 | 130,000,000 |
Common stock, shares issued (in shares) | 42,207,376 | 32,143,475 |
Common stock, shares outstanding (in shares) | 42,207,376 | 32,143,475 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating expenses: | ||||
Research and development | $ 9,689 | $ 7,469 | $ 29,151 | $ 21,184 |
General and administrative | 2,950 | 2,770 | 8,724 | 8,257 |
Total operating expenses | 12,639 | 10,239 | 37,875 | 29,441 |
Loss from operations | (12,639) | (10,239) | (37,875) | (29,441) |
Other income (expense): | ||||
Interest income | 187 | 79 | 453 | 214 |
Other income (expense), net | (29) | (18) | (68) | (8) |
Total other income | 158 | 61 | 385 | 206 |
Net loss | $ (12,481) | $ (10,178) | $ (37,490) | $ (29,235) |
Net loss per share, basic and diluted (in USD per share) | $ (0.30) | $ (0.32) | $ (0.96) | $ (0.94) |
Weighted-average common shares outstanding, basic and diluted (in shares) | 42,207,376 | 31,645,838 | 39,054,978 | 31,153,801 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (12,481) | $ (10,178) | $ (37,490) | $ (29,235) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale cash equivalents | (3) | 0 | 4 | 0 |
Foreign currency translation | 1 | 0 | 1 | 0 |
Total comprehensive loss | $ (12,483) | $ (10,178) | $ (37,485) | $ (29,235) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (37,490) | $ (29,235) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 780 | 1,404 |
Stock-based compensation | 3,643 | 3,391 |
Other | 3 | 0 |
Changes in operating assets and liabilities: | ||
Other current assets and prepaid expenses | (125) | (144) |
Accounts payable | 211 | (120) |
Accrued expenses | 2,512 | (1,890) |
Other liabilities | (11) | (78) |
Net cash used in operating activities | (30,477) | (26,672) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (574) | (437) |
Proceeds from sale of equipment | 7 | 2 |
Change in restricted cash | 0 | 515 |
Net cash (used in) provided by investing activities | (567) | 80 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 37,529 | 11,249 |
Deferred financing costs | (86) | (15) |
Proceeds from exercise of stock options | 1 | 32 |
Net cash provided by financing activities | 37,444 | 11,266 |
Effect of exchange rate changes on cash and cash equivalents | 0 | (2) |
Net change in cash and cash equivalents | 6,400 | (15,328) |
Cash and cash equivalents, beginning of period | 59,991 | 83,416 |
Cash and cash equivalents, end of period | 66,391 | 68,088 |
Supplemental disclosure of noncash investing and financing activities: | ||
Stock offering costs included in liabilities | 10 | 25 |
Purchases of property and equipment included in liabilities | 21 | 92 |
Change in stock option early exercise repurchase liability | $ 0 | $ 23 |
Description of Business and Bas
Description of Business and Basis of Financial Statements | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Financial Statements | Description of Business and Basis of Financial Statements We are a biotherapeutic company focused on developing a cell-based therapy targeting the treatment of acute forms of liver failure. Our product candidate, the ELAD ® System, or ELAD, is an extracorporeal human allogeneic cellular liver therapy designed to allow the patient’s own liver to regenerate to a healthy state, or to stabilize the patient until transplant. Since inception, we have devoted essentially all of our efforts to product development, clinical testing and pilot manufacturing and have not recognized revenues from our planned principal operations. In August 2015, we reported that our VTI-208 phase 3 clinical trial of ELAD primarily in severe alcoholic hepatitis, or sAH, failed to reach its primary or secondary endpoints, although medically pertinent pre-specified subsets based on age and disease severity did show trends toward efficacy. We are currently enrolling subjects in our new phase 3 clinical trial of ELAD, known as VTL-308, in severe alcoholic hepatitis based on our analysis of the results of the VTI-208 clinical trial. Our business, operating results, financial condition and growth prospects are subject to significant risks and uncertainties including the failure of our clinical trial to meet its endpoint, failure to obtain regulatory approval to commercialize ELAD and failure to secure adequate funding to complete the clinical testing, development and commercialization of ELAD. Unaudited Interim Financial Information The results for the three and nine months ended September 30, 2017 are not necessarily indicative of results to be expected for the year ending December 31, 2017 or any other future interim period or year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016 , included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 7, 2017. Basis of Presentation and Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP, and the rules and regulations of the SEC related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The condensed consolidated balance sheet as of December 31, 2016 included in this report has been derived from the audited consolidated financial statements included in our Annual Report on Form 10-K. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments that are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. All such adjustments are of a normal and recurring nature. The unaudited interim condensed consolidated financial statements include the accounts of Vital Therapies, Inc. and its wholly-owned subsidiaries located in the United Kingdom and China, both of which are currently inactive. All intercompany accounts and transactions have been eliminated in consolidation. We manage our operations as a single reportable segment for the purposes of assessing performance and making operating decisions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly-liquid investments with original maturities of three months or less when acquired. Cash equivalents are stated at cost unless they are securities, in which case they are recorded at fair value, which approximates original cost. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Our Level 1 assets consisted of money market funds for the periods presented. We had no Level 1 liabilities for the periods presented. Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. We had no Level 2 assets or liabilities for the periods presented. Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We had no Level 3 assets or liabilities for the periods presented. Any transfers into and out of levels within the fair value hierarchy will be recognized at the end of the reporting period in which the actual event or change in circumstances that caused the transfer occurs. The carrying value of cash and cash equivalents, other current assets and prepaid expenses, accounts payable and accrued expenses approximates fair value due to the short period of time to maturity. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally three to five years). Leasehold improvements are stated at cost and depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Construction in progress is not depreciated until the underlying asset is available to be placed in service. Repairs and maintenance costs are charged to expense as incurred. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. We have not recognized any impairment losses through September 30, 2017 . Clinical Trial Accruals As part of the process of preparing our financial statements, we are required to estimate our accrued expenses. Our clinical trial accrual process seeks to account for expenses resulting from our obligations under agreements with clinical sites, clinical research organizations, or CROs, vendors, and consultants in connection with conducting our clinical trials. We account for these expenses according to the progress of each trial as measured by subject enrollment, the timing of various aspects of the trial and if available, information from our service providers. During the course of a clinical trial, we adjust our rate of clinical expense recognition if actual results differ from our estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary, and could result in us reporting amounts that may later be determined to be higher or lower than our estimates for a particular period and adjustments to our research and development expenses may be necessary in future periods. Research and Development Research and development costs consist primarily of employee-related expenses, costs of contractors, clinical trial sites and CROs engaged in the development of ELAD, costs related to our investigation of the mechanism of action of ELAD, expenses associated with obtaining regulatory approvals, and the cost of acquiring and manufacturing clinical trial materials. All research and development costs are expensed as incurred. Stock-Based Compensation We measure and recognize compensation expense for all stock-based compensation for employees and directors based on the estimated fair value at the date of grant, and to consultants based on the ongoing estimated fair value. Currently, our stock-based awards consist only of stock options; however, future grants under our equity compensation plan may also consist of shares of restricted stock, restricted stock units, stock appreciation rights, performance awards and performance units. We estimate the fair value of stock options using the Black-Scholes-Merton, or BSM, option pricing model, which requires the use of estimates. We recognize stock-based compensation cost for employees and directors for ratably vesting stock options on a straight-line basis over the requisite service period of the award. For performance-based stock options to employees and directors, we record stock-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative and qualitative criteria to judge whether milestones are probable of achievement. The fair value of options granted to consultants is estimated using the BSM option pricing model and is re-measured at each reporting date with changes in fair value prior to vesting recognized as expense in the condensed consolidated statements of operations across the applicable vesting period. For performance-based stock options to consultants, we record stock-based compensation expense only when the performance-based milestone is achieved unless there is a performance commitment. Effective in the first quarter of 2017, we began recognizing forfeitures as they occur (see "Recently Issued and/or Adopted Accounting Standards" below). In 2016 and earlier periods, stock-based compensation expense was recognized only for those awards that were ultimately expected to vest. Through 2016, we estimated forfeitures based on an analysis of our historical employee turnover. We revised the forfeiture estimate in subsequent periods if actual forfeitures differed from those estimates. Changes in estimated forfeitures, which were not material, impacted compensation cost in the period in which the change in estimate occurred. The BSM option pricing model requires the input of highly-subjective assumptions, including the risk-free interest rate, the expected dividend yield of our common stock, the expected volatility of the price of our common stock, and the expected term of the option. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. These assumptions are estimated as follows: Risk-free Interest Rate We base the risk-free interest rate assumption on zero-coupon U.S. treasury instruments appropriate for the expected term of the stock option grants. Expected Dividend Yield We base the expected dividend yield assumption on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Consequently, we used an expected dividend yield of zero . Expected Volatility The expected stock price volatility for our common stock is estimated based on volatilities of a peer group of similar publicly-traded, biotechnology companies by taking the average historic price volatility for the peers for a period equivalent to the expected term of the stock option grants. We do not use our average historic price volatility as we have only been a publicly-traded company since April 2014. Expected Term The expected term represents the period of time that options are expected to be outstanding. As we do not have sufficient historical experience for determining the expected term of the stock option awards granted, we have determined the expected life assumption for employee and director stock options using the comparable average expected term utilizing those companies in the peer group as noted above. For consultant stock options, we estimate the expected term based on the period we expect each consultant to provide services to us. Leases We lease all of our office space and enter into various other operating lease agreements in conducting our business. At the inception of each lease, we evaluate the lease agreement to determine whether the lease is an operating or capital lease. Some of our lease agreements may contain renewal options, tenant improvement allowances, rent holidays or rent escalation clauses. When such items are included in a lease agreement, we record a deferred rent asset or liability equal to the difference between the rent expense and future minimum lease payments due. The rent expense related to operating leases is recognized on a straight-line basis in the statements of operations over the term of each lease. In cases where our lessor grants us leasehold improvement allowances that reduce our rent expense, we capitalize the improvements as incurred and recognize deferred rent, which is amortized over the shorter of the lease term or the expected useful life of the improvements. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income has been reflected as a separate component of stockholders’ equity in the accompanying condensed consolidated balance sheets. Foreign Currency Translation and Transactions The functional currency of each of our subsidiaries in the United Kingdom and China, both of which are currently inactive, is the local currency. Assets and liabilities of the subsidiaries are translated at the rate of exchange at the balance sheet date. Expenses are translated at the average exchange rates in effect during the reporting period. Gains and losses resulting from foreign currency translation are included in accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations, which to date have not been significant. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of September 30, 2017 and December 31, 2016 , we maintained a full valuation allowance against our entire balance of deferred tax assets. We record uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits, if any, within income tax expense, and any accrued interest and penalties are included within the related tax liability line. Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares and, if dilutive, common stock equivalents outstanding for the period determined using the treasury-stock method. Common stock equivalents are comprised of options outstanding under our stock option plan and warrants for the purchase of common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to our net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive are as follows: As of September 30, 2017 2016 Options to purchase common stock 6,071,707 4,847,744 Warrants to purchase common stock 240,620 250,539 Recently Issued and/or Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, "Leases," or ASU 2016-02. ASU 2016-02 will require that lease arrangements longer than 12 months result in an entity recognizing an asset and liability equal to the present value of the lease payments in the statement of financial position. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods therein. This standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We expect to adopt ASU 2016-02 in 2019. The adoption of this guidance is expected to result in a significant increase in the total assets and liabilities reported on our consolidated balance sheets. In March 2016, the FASB issued ASU No. 2016-09, " Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting, " or ASU 2016-09. ASU 2016-09 changes how companies account for certain aspects of share-based payments to employees . The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover employee income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. Effective in the first quarter of 2017, we adopted the provisions of ASU 2016-09 to recognize forfeitures as they occur. Upon the adoption of this standard, we recorded a cumulative-effect adjustment of $50,000 to increase additional paid-in capital and accumulated deficit reversing our estimate of forfeitures as of December 31, 2016. In November 2016, the FASB issued ASU No. 2016-18, " Statement of Cash Flows: Restricted Cash ," or ASU 2016-18. ASU 2016-18 provides guidance on the classification of restricted cash in the statements of cash flows. This ASU will require that our statements of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this ASU are effective for interim periods beginning after December 15, 2017, with early adoption permitted. We will adopt this standard in 2018 and do not currently expect ASU 2016-18 to have a significant impact on our consolidated financial statements at the time of adoption. In May 2017, the FASB issued ASU No. 2017-09, “ Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting,” or ASU 2017-09. The amendments in this update provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We expect to adopt ASU 2017-09 for fiscal year 2018. The amendments will be applied on a prospective basis to any award modified on or after the adoption date. We do not expect ASU 2017-09 to have a significant impact on our consolidated financial statements at the time of adoption. |
Other Financial Information
Other Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Financial Information | Other Financial Information Property and Equipment Property and equipment, leasehold improvements, and related accumulated depreciation and amortization were as follows (in thousands): September 30, December 31, Manufacturing, clinical and laboratory equipment $ 7,491 $ 7,325 Leasehold improvements 4,723 4,450 Office furniture and equipment 246 220 Construction in progress 165 111 12,625 12,106 Less: accumulated depreciation and amortization (10,353 ) (9,601 ) Total $ 2,272 $ 2,505 Depreciation and amortization expense was $216,000 and $420,000 for the three months ended September 30, 2017 and 2016 , respectively, and $780,000 and $1.4 million for the nine months ended September 30, 2017 and 2016 , respectively. Accrued Expenses Accrued expenses consist of (in thousands): September 30, December 31, Accrued clinical and related costs $ 4,556 $ 2,316 Accrued compensation and related taxes 2,381 2,154 Accrued other 230 186 Total $ 7,167 $ 4,656 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases We lease office, manufacturing and research and development facilities and equipment under various non-cancellable operating lease agreements with expiration dates into 2022 . In August 2016, we entered into amendments to extend certain leases for office and research and development space to January 2019. These amended leases do not include renewal options. Our facility leases generally provide for periodic rent increases and many contain escalation clauses. In May 2017, we entered into a new lease, or the Lease, extending the term of our existing manufacturing and research and development facility lease from June 2017 to June 2022. The Lease includes a renewal option and requires the payment of our proportionate share of the facility’s operating expenses. Future minimum annual obligations under all non-cancellable operating lease commitments including the Lease at September 30, 2017 were (in thousands): Operating Lease Obligations Three months ending December 31, 2017 $ 223 2018 1,051 2019 467 2020 387 2021 434 Thereafter 222 Total $ 2,784 We recognize rent expense for our facility operating leases on a straight-line basis. We account for the difference between the minimum lease payments and the straight-line amount as deferred rent. Total rent, property taxes and routine maintenance expense under our operating leases was $253,000 and $208,000 for the three months ended September 30, 2017 and 2016 , respectively and $736,000 and $655,000 for the nine months ended September 30, 2017 and 2016 , respectively. Current and long-term deferred rent totaled $86,000 and $46,000 at September 30, 2017 , and $44,000 and $99,000 at December 31, 2016 , respectively. Legal Proceedings We are not currently a party to any litigation, nor are we aware of any pending or threatened litigation against us, that we believe would materially affect our business, operating results, financial condition or cash flows. However, our industry is characterized by frequent claims and litigation including securities litigation, claims regarding patent and other intellectual property rights and claims for product liability. As a result, in the future, we may be involved in various legal proceedings from time to time. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The following fair value hierarchy tables present information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurement at September 30, 2017 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 64,247 $ 64,247 $ — $ — Fair Value Measurement at December 31, 2016 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 57,715 $ 57,715 $ — $ — There were no liabilities measured at fair value on a recurring basis as of September 30, 2017 or as of December 31, 2016 . The carrying amounts of other current assets and prepaid expenses, accounts payable, accrued expenses, and other current liabilities approximate their fair values due to their short-term nature. For our money market funds, unrealized gains and losses are reported as accumulated other comprehensive income (loss), and realized gains and losses are included in interest income on the condensed consolidated statements of operations. There were no transfers between Level 1, Level 2 or Level 3 for our assets during the periods presented. |
Common Stock and Stock Warrants
Common Stock and Stock Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Common Stock and Stock Warrants | Common Stock and Stock Warrants Shelf Registration Statement We currently have an effective shelf registration statement on Form S-3 on file. The shelf registration statement permits: (i) the offering, issuance and sale by us of up to a maximum aggregate offering price of $200.0 million of common stock, preferred stock, warrants, debt securities, and/or units in one or more offerings and in any combination; (ii) sales of up to 2.5 million shares of common stock by certain selling stockholders; and (iii) the offering, issuance and sale by us of up to a maximum aggregate offering price of $75.0 million of our common stock that may be issued and sold under an “at-the-market” sales agreement, or ATM, with Cantor Fitzgerald & Co. In October 2015, we completed a follow-on public offering raising gross proceeds of $34.5 million under the shelf registration statement. During the year ended December 31, 2016, we raised gross proceeds of $12.2 million pursuant to the ATM selling 1.5 million shares of our common stock at a weighted average price of $7.90 per share. The net proceeds to us from the ATM were $11.7 million after deducting underwriter commissions of $366,000 and estimated offering expenses of $173,000 . We did not sell any shares under the ATM during the nine months ended September 30, 2017 . In March 2017, we completed an additional follow-on public offering under the shelf registration statement raising gross proceeds of $40.3 million . Under this follow-on public offering, we sold 10.1 million shares of our common stock at a price of $4.00 per share. The net proceeds to us from the March 2017 follow-on offering were $37.5 million , after deducting underwriting discounts and commissions of $2.4 million and offering expenses of approximately $362,000 . At September 30, 2017 , $113.1 million remains available for issuance and sale under the shelf registration statement, $62.8 million of which may be offered, issued and sold under the ATM. Private Placement of Common Stock In August 2016, we entered into a securities purchase agreement, or the Securities Purchase Agreement, with a newly-appointed board member pursuant to which we agreed to issue and sell an aggregate of $700,000 of our common stock in a private placement of shares that have not been registered under the Securities Act of 1933, or the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act. On August 12, 2016, we sold 118,243 shares of common stock under the Securities Purchase Agreement at a price of $5.92 per share. Stock Reserved for Future Issuance Shares reserved for future issuance at September 30, 2017 are as follows: Number of Shares Common stock options outstanding 6,071,707 Common stock options available for future grant 388,263 Common stock warrants 240,620 Total common shares reserved for future issuance 6,700,590 Stock Warrants We issued warrants to purchase redeemable convertible preferred stock in connection with financing activities and for consulting services. In connection with the junior preferred stock financing in February 2012, all warrants to purchase preferred stock converted to common stock warrants. As of September 30, 2017 and December 31, 2016, warrants for 240,620 shares of common stock were outstanding and exercisable at an exercise price of $92.99 and expire in September 2019. |
Stock Compensation Plans
Stock Compensation Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Plans | Stock Compensation Plans Equity Incentive Plans Our 2014 Equity Incentive Plan, or the 2014 Plan, became effective in April 2014 and replaced our 2012 Stock Option Plan, or the 2012 Plan, with respect to future awards. The 2014 Plan provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards and performance units to employees, directors and consultants. Shares available for grant under the 2014 Plan include any shares remaining available or becoming available in the future under the 2012 Plan due to cancellation or forfeiture. In addition, the 2014 Plan provides for annual increases in the number of shares available for issuance thereunder beginning upon its effective date in April 2014, and on each annual anniversary, equal to the lower of: • 1,200,000 shares of our common stock; • 3% of the outstanding shares of our common stock on the second-to-the-last day prior to each anniversary date of the effectiveness date of our initial public offering; or • an amount as our board of directors may determine. Pursuant to such provisions, the number of shares available for issuance under the 2014 Plan was increased by 1,200,000 shares effective April 16, 2017. Shares available for grant under the 2014 Plan totaled 138,263 shares as of September 30, 2017 . In September 2017, our board of directors approved the 2017 Inducement Equity Incentive Plan, or the Inducement Plan, which has terms and conditions substantially similar to our 2014 Plan. Under the Inducement Plan, 250,000 shares of our common stock were reserved to be used exclusively for grants to individuals who were not previously our employees or directors, as an inducement material to the individual’s entry into employment with us within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. As of September 30, 2017 , we had not made any grants under the Inducement Plan. Option grants made under the 2014 Plan and the 2012 Plan generally vest over one or four years except for performance-based stock options. Our performance-based stock options will fully vest and become exercisable only on achievement of the performance conditions while the participant is a continuing service provider. Options generally expire ten years from the grant date or earlier in accordance with the terms of the plans and the related stock option agreement. The 2012 Plan provided for the grant of stock options, restricted stock, restricted stock units, stock purchase rights, and performance awards to employees, directors, and consultants. Option grants under our 2012 Plan are exercisable immediately, subject to a repurchase right that lapses as the option vests. As of September 30, 2017 , all options exercised under the 2012 Plan have vested. To date, we have not repurchased any shares related to early exercises. The following table summarizes stock option activity under the 2012 and 2014 Plans: Options Weighted- Weighted- Aggregate Outstanding as of January 1, 2017 4,841,274 $ 7.78 Granted 1,382,327 $ 3.24 Exercised (1,401 ) $ 0.43 Forfeited or expired (150,493 ) $ 7.51 Outstanding as of September 30, 2017 6,071,707 $ 6.76 7.19 $ 4,564,825 Options vested and expected to vest as of September 30, 2017 5,946,803 $ 6.80 7.15 $ 4,430,789 Options exercisable as of September 30, 2017 3,437,892 $ 7.95 5.84 $ 1,933,842 Stock-Based Compensation Expense The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2017 and 2016 was $2.29 and $5.73 , respectively. The following are the ranges of underlying assumptions used in the BSM option pricing model to determine the fair value of stock options granted to employees and to non-employees: Nine Months Ended September 30, 2017 2016 Employees: Risk-free interest rate 1.5% - 1.9% 1.6% - 1.7% Expected dividend yield 0% 0% Expected volatility 82.6% - 85.4% 77.1% - 86.2% Expected term of options (years) 5.9 - 6.1 6.0 Fair value of common stock $2.75 - $5.05 $5.92 - $8.97 Non-employees: Risk-free interest rate 1.0% - 1.9% 0.5% - 1.4% Expected dividend yield 0% 0% Expected volatility 71.6% - 83.9% 76.9% - 97.0% Expected term of options (years) 0.8 - 4.5 0.2 - 5.5 Fair value of common stock $2.90 - $5.05 $6.12 - $9.07 Total stock-based compensation expense for all stock awards recognized in our condensed consolidated statements of operations is as follows (in thousands): Three Months Nine Months 2017 2016 2017 2016 Employees: Research and development $ 414 $ 492 $ 1,244 $ 1,291 General and administrative 777 835 2,343 1,934 Total $ 1,191 $ 1,327 $ 3,587 $ 3,225 Non-employees: Research and development $ 33 $ 56 $ 56 $ 150 General and administrative — 1 — 16 Total $ 33 $ 57 $ 56 $ 166 As of September 30, 2017 , there was $7.3 million and $440,000 of total compensation cost related to unvested employee and non-employee stock option awards, respectively, not yet recognized. The fair value of the non-employee stock options is re-measured at each reporting date and, accordingly, the expense to be recognized will change, primarily with changes in the market value of our common stock. Stock-based compensation expense for employee and non-employee stock option awards is expected to be recognized over a remaining weighted-average vesting period of 1.99 years and 2.39 years, respectively. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The results for the three and nine months ended September 30, 2017 are not necessarily indicative of results to be expected for the year ending December 31, 2017 or any other future interim period or year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016 , included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 7, 2017. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP, and the rules and regulations of the SEC related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The condensed consolidated balance sheet as of December 31, 2016 included in this report has been derived from the audited consolidated financial statements included in our Annual Report on Form 10-K. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments that are necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. All such adjustments are of a normal and recurring nature. The unaudited interim condensed consolidated financial statements include the accounts of Vital Therapies, Inc. and its wholly-owned subsidiaries located in the United Kingdom and China, both of which are currently inactive. All intercompany accounts and transactions have been eliminated in consolidation. We manage our operations as a single reportable segment for the purposes of assessing performance and making operating decisions. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly-liquid investments with original maturities of three months or less when acquired. Cash equivalents are stated at cost unless they are securities, in which case they are recorded at fair value, which approximates original cost. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Our Level 1 assets consisted of money market funds for the periods presented. We had no Level 1 liabilities for the periods presented. Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. We had no Level 2 assets or liabilities for the periods presented. Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We had no Level 3 assets or liabilities for the periods presented. Any transfers into and out of levels within the fair value hierarchy will be recognized at the end of the reporting period in which the actual event or change in circumstances that caused the transfer occurs. The carrying value of cash and cash equivalents, other current assets and prepaid expenses, accounts payable and accrued expenses approximates fair value due to the short period of time to maturity. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally three to five years). Leasehold improvements are stated at cost and depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Construction in progress is not depreciated until the underlying asset is available to be placed in service. Repairs and maintenance costs are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. |
Clinical Trial Accruals | Clinical Trial Accruals As part of the process of preparing our financial statements, we are required to estimate our accrued expenses. Our clinical trial accrual process seeks to account for expenses resulting from our obligations under agreements with clinical sites, clinical research organizations, or CROs, vendors, and consultants in connection with conducting our clinical trials. We account for these expenses according to the progress of each trial as measured by subject enrollment, the timing of various aspects of the trial and if available, information from our service providers. During the course of a clinical trial, we adjust our rate of clinical expense recognition if actual results differ from our estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary, and could result in us reporting amounts that may later be determined to be higher or lower than our estimates for a particular period and adjustments to our research and development expenses may be necessary in future periods. |
Research and Development | Research and Development Research and development costs consist primarily of employee-related expenses, costs of contractors, clinical trial sites and CROs engaged in the development of ELAD, costs related to our investigation of the mechanism of action of ELAD, expenses associated with obtaining regulatory approvals, and the cost of acquiring and manufacturing clinical trial materials. All research and development costs are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation We measure and recognize compensation expense for all stock-based compensation for employees and directors based on the estimated fair value at the date of grant, and to consultants based on the ongoing estimated fair value. Currently, our stock-based awards consist only of stock options; however, future grants under our equity compensation plan may also consist of shares of restricted stock, restricted stock units, stock appreciation rights, performance awards and performance units. We estimate the fair value of stock options using the Black-Scholes-Merton, or BSM, option pricing model, which requires the use of estimates. We recognize stock-based compensation cost for employees and directors for ratably vesting stock options on a straight-line basis over the requisite service period of the award. For performance-based stock options to employees and directors, we record stock-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative and qualitative criteria to judge whether milestones are probable of achievement. The fair value of options granted to consultants is estimated using the BSM option pricing model and is re-measured at each reporting date with changes in fair value prior to vesting recognized as expense in the condensed consolidated statements of operations across the applicable vesting period. For performance-based stock options to consultants, we record stock-based compensation expense only when the performance-based milestone is achieved unless there is a performance commitment. Effective in the first quarter of 2017, we began recognizing forfeitures as they occur (see "Recently Issued and/or Adopted Accounting Standards" below). In 2016 and earlier periods, stock-based compensation expense was recognized only for those awards that were ultimately expected to vest. Through 2016, we estimated forfeitures based on an analysis of our historical employee turnover. We revised the forfeiture estimate in subsequent periods if actual forfeitures differed from those estimates. Changes in estimated forfeitures, which were not material, impacted compensation cost in the period in which the change in estimate occurred. The BSM option pricing model requires the input of highly-subjective assumptions, including the risk-free interest rate, the expected dividend yield of our common stock, the expected volatility of the price of our common stock, and the expected term of the option. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. These assumptions are estimated as follows: Risk-free Interest Rate We base the risk-free interest rate assumption on zero-coupon U.S. treasury instruments appropriate for the expected term of the stock option grants. Expected Dividend Yield We base the expected dividend yield assumption on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Consequently, we used an expected dividend yield of zero . Expected Volatility The expected stock price volatility for our common stock is estimated based on volatilities of a peer group of similar publicly-traded, biotechnology companies by taking the average historic price volatility for the peers for a period equivalent to the expected term of the stock option grants. We do not use our average historic price volatility as we have only been a publicly-traded company since April 2014. Expected Term The expected term represents the period of time that options are expected to be outstanding. As we do not have sufficient historical experience for determining the expected term of the stock option awards granted, we have determined the expected life assumption for employee and director stock options using the comparable average expected term utilizing those companies in the peer group as noted above. For consultant stock options, we estimate the expected term based on the period we expect each consultant to provide services to us. |
Leases | Leases We lease all of our office space and enter into various other operating lease agreements in conducting our business. At the inception of each lease, we evaluate the lease agreement to determine whether the lease is an operating or capital lease. Some of our lease agreements may contain renewal options, tenant improvement allowances, rent holidays or rent escalation clauses. When such items are included in a lease agreement, we record a deferred rent asset or liability equal to the difference between the rent expense and future minimum lease payments due. The rent expense related to operating leases is recognized on a straight-line basis in the statements of operations over the term of each lease. In cases where our lessor grants us leasehold improvement allowances that reduce our rent expense, we capitalize the improvements as incurred and recognize deferred rent, which is amortized over the shorter of the lease term or the expected useful life of the improvements. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income has been reflected as a separate component of stockholders’ equity in the accompanying condensed consolidated balance sheets. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currency of each of our subsidiaries in the United Kingdom and China, both of which are currently inactive, is the local currency. Assets and liabilities of the subsidiaries are translated at the rate of exchange at the balance sheet date. Expenses are translated at the average exchange rates in effect during the reporting period. Gains and losses resulting from foreign currency translation are included in accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations, which to date have not been significant. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of September 30, 2017 and December 31, 2016 , we maintained a full valuation allowance against our entire balance of deferred tax assets. We record uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits, if any, within income tax expense, and any accrued interest and penalties are included within the related tax liability line. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares and, if dilutive, common stock equivalents outstanding for the period determined using the treasury-stock method. Common stock equivalents are comprised of options outstanding under our stock option plan and warrants for the purchase of common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to our net loss position. |
Recently Issued and/or Adopted Accounting Standards | Recently Issued and/or Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, "Leases," or ASU 2016-02. ASU 2016-02 will require that lease arrangements longer than 12 months result in an entity recognizing an asset and liability equal to the present value of the lease payments in the statement of financial position. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods therein. This standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We expect to adopt ASU 2016-02 in 2019. The adoption of this guidance is expected to result in a significant increase in the total assets and liabilities reported on our consolidated balance sheets. In March 2016, the FASB issued ASU No. 2016-09, " Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting, " or ASU 2016-09. ASU 2016-09 changes how companies account for certain aspects of share-based payments to employees . The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover employee income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. Effective in the first quarter of 2017, we adopted the provisions of ASU 2016-09 to recognize forfeitures as they occur. Upon the adoption of this standard, we recorded a cumulative-effect adjustment of $50,000 to increase additional paid-in capital and accumulated deficit reversing our estimate of forfeitures as of December 31, 2016. In November 2016, the FASB issued ASU No. 2016-18, " Statement of Cash Flows: Restricted Cash ," or ASU 2016-18. ASU 2016-18 provides guidance on the classification of restricted cash in the statements of cash flows. This ASU will require that our statements of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this ASU are effective for interim periods beginning after December 15, 2017, with early adoption permitted. We will adopt this standard in 2018 and do not currently expect ASU 2016-18 to have a significant impact on our consolidated financial statements at the time of adoption. In May 2017, the FASB issued ASU No. 2017-09, “ Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting,” or ASU 2017-09. The amendments in this update provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We expect to adopt ASU 2017-09 for fiscal year 2018. The amendments will be applied on a prospective basis to any award modified on or after the adoption date. We do not expect ASU 2017-09 to have a significant impact on our consolidated financial statements at the time of adoption. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss per Share | Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive are as follows: As of September 30, 2017 2016 Options to purchase common stock 6,071,707 4,847,744 Warrants to purchase common stock 240,620 250,539 |
Other Financial Information (Ta
Other Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment, Leasehold Improvements, and Related Accumulated Depreciation and Amortization | Property and equipment, leasehold improvements, and related accumulated depreciation and amortization were as follows (in thousands): September 30, December 31, Manufacturing, clinical and laboratory equipment $ 7,491 $ 7,325 Leasehold improvements 4,723 4,450 Office furniture and equipment 246 220 Construction in progress 165 111 12,625 12,106 Less: accumulated depreciation and amortization (10,353 ) (9,601 ) Total $ 2,272 $ 2,505 |
Schedule of Accrued Expenses | Accrued expenses consist of (in thousands): September 30, December 31, Accrued clinical and related costs $ 4,556 $ 2,316 Accrued compensation and related taxes 2,381 2,154 Accrued other 230 186 Total $ 7,167 $ 4,656 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Annual Obligations | Future minimum annual obligations under all non-cancellable operating lease commitments including the Lease at September 30, 2017 were (in thousands): Operating Lease Obligations Three months ending December 31, 2017 $ 223 2018 1,051 2019 467 2020 387 2021 434 Thereafter 222 Total $ 2,784 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following fair value hierarchy tables present information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands): Fair Value Measurement at September 30, 2017 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 64,247 $ 64,247 $ — $ — Fair Value Measurement at December 31, 2016 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 57,715 $ 57,715 $ — $ — |
Common Stock and Stock Warran19
Common Stock and Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Shares Reserved for Future Issuance | Shares reserved for future issuance at September 30, 2017 are as follows: Number of Shares Common stock options outstanding 6,071,707 Common stock options available for future grant 388,263 Common stock warrants 240,620 Total common shares reserved for future issuance 6,700,590 |
Stock Compensation Plans (Table
Stock Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity under the 2012 and 2014 Plans: Options Weighted- Weighted- Aggregate Outstanding as of January 1, 2017 4,841,274 $ 7.78 Granted 1,382,327 $ 3.24 Exercised (1,401 ) $ 0.43 Forfeited or expired (150,493 ) $ 7.51 Outstanding as of September 30, 2017 6,071,707 $ 6.76 7.19 $ 4,564,825 Options vested and expected to vest as of September 30, 2017 5,946,803 $ 6.80 7.15 $ 4,430,789 Options exercisable as of September 30, 2017 3,437,892 $ 7.95 5.84 $ 1,933,842 |
Ranges of Underlying Assumptions Used in BSM Option Pricing Model to Determine Fair Value of Stock Options Granted to Employees and Nonemployees | The following are the ranges of underlying assumptions used in the BSM option pricing model to determine the fair value of stock options granted to employees and to non-employees: Nine Months Ended September 30, 2017 2016 Employees: Risk-free interest rate 1.5% - 1.9% 1.6% - 1.7% Expected dividend yield 0% 0% Expected volatility 82.6% - 85.4% 77.1% - 86.2% Expected term of options (years) 5.9 - 6.1 6.0 Fair value of common stock $2.75 - $5.05 $5.92 - $8.97 Non-employees: Risk-free interest rate 1.0% - 1.9% 0.5% - 1.4% Expected dividend yield 0% 0% Expected volatility 71.6% - 83.9% 76.9% - 97.0% Expected term of options (years) 0.8 - 4.5 0.2 - 5.5 Fair value of common stock $2.90 - $5.05 $6.12 - $9.07 |
Schedule of Stock-based Compensation Expense for Stock Awards Recognized | Total stock-based compensation expense for all stock awards recognized in our condensed consolidated statements of operations is as follows (in thousands): Three Months Nine Months 2017 2016 2017 2016 Employees: Research and development $ 414 $ 492 $ 1,244 $ 1,291 General and administrative 777 835 2,343 1,934 Total $ 1,191 $ 1,327 $ 3,587 $ 3,225 Non-employees: Research and development $ 33 $ 56 $ 56 $ 150 General and administrative — 1 — 16 Total $ 33 $ 57 $ 56 $ 166 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Impairment losses | $ 0 | |
Expected dividend yield | 0.00% | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Additional Paid-in Capital | Accounting Standards Update 2016-09 | ||
Property, Plant and Equipment [Line Items] | ||
Cumulative effect of new accounting principle | $ (50,000) | |
Retained Earnings | Accounting Standards Update 2016-09 | ||
Property, Plant and Equipment [Line Items] | ||
Cumulative effect of new accounting principle | $ 50,000 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss per Share (Detail) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in the calculation of diluted net loss per share (in shares) | 6,071,707 | 4,847,744 |
Warrants to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in the calculation of diluted net loss per share (in shares) | 240,620 | 250,539 |
Other Financial Information - S
Other Financial Information - Schedule of Property and Equipment, Leasehold Improvements, and Related Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,625 | $ 12,106 |
Less: accumulated depreciation and amortization | (10,353) | (9,601) |
Property and equipment, net | 2,272 | 2,505 |
Manufacturing, clinical and laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,491 | 7,325 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,723 | 4,450 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 246 | 220 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 165 | $ 111 |
Other Financial Information - A
Other Financial Information - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Depreciation and amortization expense | $ 216 | $ 420 | $ 780 | $ 1,404 |
Other Financial Information -25
Other Financial Information - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued clinical and related costs | $ 4,556 | $ 2,316 |
Accrued compensation and related taxes | 2,381 | 2,154 |
Accrued other | 230 | 186 |
Total | $ 7,167 | $ 4,656 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Total rent, property taxes and routine maintenance expense under operating leases | $ 253 | $ 208 | $ 736 | $ 655 | |
Current deferred rent | 86 | 86 | $ 44 | ||
Long-term deferred rent | $ 46 | $ 46 | $ 99 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies - Future Minimum Annual Obligations (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Three months ending December 31, 2017 | $ 223 |
2,018 | 1,051 |
2,019 | 467 |
2,020 | 387 |
2,021 | 434 |
Thereafter | 222 |
Total | $ 2,784 |
Fair Value - Schedule of Financ
Fair Value - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - Money market funds - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Assets | $ 64,247 | $ 57,715 |
Level 1 | ||
Assets | ||
Assets | 64,247 | 57,715 |
Level 2 | ||
Assets | ||
Assets | 0 | 0 |
Level 3 | ||
Assets | ||
Assets | $ 0 | $ 0 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 0 | $ 0 |
Common Stock and Stock Warran30
Common Stock and Stock Warrants - Shelf Registration Statement and Private Placement of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | Aug. 12, 2016 | Mar. 31, 2017 | Aug. 31, 2016 | Oct. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | May 31, 2015 |
Class of Stock [Line Items] | ||||||||
Aggregate offering price | $ 113,100 | $ 200,000 | ||||||
Maximum common stock shares authorized (in shares) | 2,500,000 | |||||||
Gross proceeds from additional offering | $ 34,500 | |||||||
Proceeds from issuance of common stock | 37,529 | $ 11,249 | ||||||
At-The-Market Sales Agreement | ||||||||
Class of Stock [Line Items] | ||||||||
Amount remaining to be offered | $ 75,000 | |||||||
Gross proceeds from additional offering | $ 12,200 | |||||||
Shares sold in offering (in shares) | 1,500,000 | |||||||
Proceeds from issuance of common stock | $ 11,700 | |||||||
Payments for commissions | 366 | |||||||
Estimated offering expenses | $ 173 | |||||||
Maximum aggregate offering price of securities | $ 62,800 | |||||||
At-The-Market Sales Agreement | Weighted Average | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in USD per share) | $ 7.90 | |||||||
Additional Follow-On Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Gross proceeds from additional offering | $ 40,300 | |||||||
Shares sold in offering (in shares) | 10,100,000 | |||||||
Share price (in USD per share) | $ 4 | |||||||
Proceeds from issuance of common stock | $ 37,500 | |||||||
Payments for commissions | 2,400 | |||||||
Estimated offering expenses | $ 362 | |||||||
Private Placement | ||||||||
Class of Stock [Line Items] | ||||||||
Shares sold in offering (in shares) | 118,243 | |||||||
Share price (in USD per share) | $ 5.92 | |||||||
Aggregate amount of common stock to sell in private placement | $ 700 |
Common Stock and Warrants - Sha
Common Stock and Warrants - Shares Reserved for Future Issuance (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||
Total common shares reserved for future issuance (in shares) | 6,700,590 | |
Common stock warrants (in shares) | 240,620 | |
Common stock options outstanding | ||
Class of Stock [Line Items] | ||
Total common shares reserved for future issuance (in shares) | 6,071,707 | |
Common stock options available for future grant | ||
Class of Stock [Line Items] | ||
Total common shares reserved for future issuance (in shares) | 388,263 | |
Common stock warrants | ||
Class of Stock [Line Items] | ||
Common stock warrants (in shares) | 240,620 |
Common Stock and Stock Warran32
Common Stock and Stock Warrants - Warrants (Details) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Number of warrants outstanding (in shares) | 240,620 | |
Exercise price of warrants (in USD per share) | $ 92.99 | $ 92.99 |
Stock Compensation Plans - Addi
Stock Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Apr. 16, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period from grant date | 10 years | ||
Weighted-average grant date fair value of stock options granted (usd per share) | $ 2.29 | $ 5.73 | |
Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost related to unvested employee stock option awards | $ 7,300 | ||
Remaining weighted-average vesting period | 1 year 11 months 27 days | ||
Non-Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost related to unvested employee stock option awards | $ 440 | ||
Remaining weighted-average vesting period | 2 years 4 months 21 days | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vesting period | 1 year | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vesting period | 4 years | ||
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of common stock for annual increase in shares available for issuance | 1,200,000 | 1,200,000 | |
Percentage of outstanding shares of common stock for annual increase in shares available for issuance | 3.00% | ||
Shares available for grant | 138,263 | ||
Inducement Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for grant | 250,000 | ||
2012 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares repurchased | 0 |
Stock Compensation Plans - Summ
Stock Compensation Plans - Summary of Stock Option Activity (Detail) | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Options | |
Outstanding, Beginning balance (in shares) | shares | 4,841,274 |
Granted (in shares) | shares | 1,382,327 |
Exercised (in shares) | shares | (1,401) |
Forfeited or expired (in shares) | shares | (150,493) |
Outstanding, Ending balance (in shares) | shares | 6,071,707 |
Options vested and expected to vest, Ending balance (in shares) | shares | 5,946,803 |
Options exercisable, Ending balance (in shares) | shares | 3,437,892 |
Weighted- Average Exercise Price | |
Outstanding, Beginning balance (usd per share) | $ / shares | $ 7.78 |
Granted (usd per share) | $ / shares | 3.24 |
Exercised (usd per share) | $ / shares | 0.43 |
Forfeited or expired (usd per share) | $ / shares | 7.51 |
Outstanding, Ending balance (usd per share) | $ / shares | 6.76 |
Options vested and expected to vest, Weighted-Average Exercise Price, Ending balance (usd per share) | $ / shares | 6.80 |
Options exercisable, Weighted-Average Exercise Price, Ending balance (usd per share) | $ / shares | $ 7.95 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, Weighted-Average Remaining Contractual Term, Ending balance | 7 years 2 months 9 days |
Options vested and expected to vest , Weighted-Average Remaining Contractual Term, Ending balance | 7 years 1 month 24 days |
Options exercisable, Weighted-Average Remaining Contractual Term, Ending balance | 5 years 10 months 2 days |
Outstanding, Aggregate Intrinsic Value, Ending balance | $ | $ 4,564,825 |
Options vested and expected to vest , Aggregate Intrinsic Value, Ending balance | $ | 4,430,789 |
Options exercisable, Aggregate Intrinsic Value, Ending balance | $ | $ 1,933,842 |
Stock Compensation Plans - Rang
Stock Compensation Plans - Ranges of Underlying Assumptions Used in BSM Option Pricing Model to Determine Fair Value of Stock Options Granted to Employees and Nonemployees (Detail) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Expected term of options (years) | 6 years | |
Employees | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.50% | 1.60% |
Expected volatility, minimum | 82.60% | 77.10% |
Expected term of options (years) | 5 years 10 months 24 days | |
Fair value of common stock | $ 2.75 | $ 5.92 |
Employees | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, maximum | 1.90% | 1.70% |
Expected volatility, maximum | 85.40% | 86.20% |
Expected term of options (years) | 6 years 1 month 6 days | |
Fair value of common stock | $ 5.05 | $ 8.97 |
Non-Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Non-Employees | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.00% | 0.50% |
Expected volatility, minimum | 71.60% | 76.90% |
Expected term of options (years) | 9 months 18 days | 2 months 12 days |
Fair value of common stock | $ 2.9 | $ 6.12 |
Non-Employees | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, maximum | 1.90% | 1.40% |
Expected volatility, maximum | 83.90% | 97.00% |
Expected term of options (years) | 4 years 6 months | 5 years 6 months |
Fair value of common stock | $ 5.05 | $ 9.07 |
Stock Compensation Plans - Sche
Stock Compensation Plans - Schedule of Stock-based Compensation Expense for Stock Awards Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 3,643 | $ 3,391 | ||
Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 1,191 | $ 1,327 | 3,587 | 3,225 |
Employees | Research and Development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 414 | 492 | 1,244 | 1,291 |
Employees | General and Administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 777 | 835 | 2,343 | 1,934 |
Non-Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 33 | 57 | 56 | 166 |
Non-Employees | Research and Development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 33 | 56 | 56 | 150 |
Non-Employees | General and Administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 1 | $ 0 | $ 16 |