Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | true | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,369,694 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 17,798 | $ 56,901 |
Prepaid expenses and other current assets | 1,263 | 1,220 |
Total current assets | 19,061 | 58,121 |
Property and equipment, net | 890 | 2,155 |
Other assets | 37 | 108 |
Total assets | 19,988 | 60,384 |
Current liabilities: | ||
Accounts payable | 1,131 | 1,049 |
Accrued expenses | 4,552 | 9,141 |
Other current liabilities | 8 | 91 |
Total current liabilities | 5,691 | 10,281 |
Long-term liabilities | 45 | 59 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 20,000,000 authorized and no shares issued or outstanding at September 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.0001 par value; 130,000,000 shares authorized at September 30, 2018 and December 31, 2017; 42,369,694 and 42,368,864 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 4 | 4 |
Additional paid-in capital | 349,132 | 345,915 |
Accumulated other comprehensive income | 80 | 78 |
Accumulated deficit | (334,964) | (295,953) |
Total stockholders’ equity | 14,252 | 50,044 |
Total liabilities and stockholders’ equity | $ 19,988 | $ 60,384 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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) | 42,369,694 | 42,368,864 |
Common stock, shares outstanding (in shares) | 42,369,694 | 42,368,864 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating expenses: | ||||
Research and development | $ 5,989 | $ 9,689 | $ 24,805 | $ 29,151 |
General and administrative | 2,461 | 2,950 | 11,054 | 8,724 |
Severance Costs | 2,395 | 0 | 2,395 | 0 |
Impairment loss | 1,219 | 0 | 1,219 | 0 |
Total operating expenses | 12,064 | 12,639 | 39,473 | 37,875 |
Loss from operations | (12,064) | (12,639) | (39,473) | (37,875) |
Other income (expense): | ||||
Interest income | 114 | 187 | 445 | 453 |
Other income (expense), net | 9 | (29) | 17 | (68) |
Total other income | 123 | 158 | 462 | 385 |
Net loss | $ (11,941) | $ (12,481) | $ (39,011) | $ (37,490) |
Net loss per share, basic and diluted (in USD per share) | $ (0.28) | $ (0.30) | $ (0.92) | $ (0.96) |
Weighted-average common shares outstanding, basic and diluted (in shares) | 42,369,437 | 42,207,376 | 42,369,093 | 39,054,978 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (11,941) | $ (12,481) | $ (39,011) | $ (37,490) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on cash equivalents | 0 | (3) | 2 | 4 |
Foreign currency translation | 0 | 1 | 0 | 1 |
Total comprehensive loss | $ (11,941) | $ (12,483) | $ (39,009) | $ (37,485) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (39,011) | $ (37,490) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 628 | 780 |
Impairment loss | 1,219 | 0 |
Stock-based compensation | 3,097 | 3,643 |
Common stock issued for services | 115 | 0 |
Other | 218 | 3 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (191) | (125) |
Accounts payable | 94 | 211 |
Accrued expenses | (4,583) | 2,512 |
Other liabilities | (98) | (11) |
Net cash used in operating activities | (38,512) | (30,477) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (597) | (574) |
Proceeds from sale of equipment | 2 | 7 |
Net cash used in investing activities | (595) | (567) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 0 | 37,529 |
Deferred financing costs | 0 | (86) |
Proceeds from exercise of stock options | 4 | 1 |
Net cash provided by financing activities | 4 | 37,444 |
Net change in cash and cash equivalents | (39,103) | 6,400 |
Cash and cash equivalents, beginning of period | 56,901 | 59,991 |
Cash and cash equivalents, end of period | 17,798 | 66,391 |
Supplemental disclosure of noncash investing and financing activities: | ||
Stock issuance costs included in liabilities | 0 | 10 |
Purchases of property and equipment included in liabilities | $ 0 | $ 21 |
Description of Business and Bas
Description of Business and Basis of Financial Statements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Financial Statements | Description of Business and Basis of Financial Statements Description of Business We are a biotherapeutic company that has been developing a cell-based therapy targeting the treatment of acute forms of liver failure. Our initial product candidate, the ELAD ® System, or ELAD, is a human-cell-based, bio-artificial liver, which was being developed to improve rates of survival among patients with acute forms of liver failure. 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 September 2018, we reported top-line data from our phase 3 clinical trial of ELAD, VTL-308, in 151 subjects with severe alcoholic hepatitis. Although there was a numerical improvement in survival in the ELAD-treated group between three months and one year following randomization, the study failed to meet the primary endpoint of a significant improvement in overall survival through at least ninety-one days. The secondary endpoint of the proportion of survivors at study day ninety-one also showed no statistically significant difference between the groups. Considering these results, we do not believe the ELAD System can be approved in the United States or the European Union without additional clinical trials, if ever, and that such clinical trials would require substantial capital and time to complete. Consequently, we have ceased any further development of the ELAD System for the United States and Europe, substantially reduced our workforce, discontinued most of our supply and service agreements, and have shifted our strategic focus to identifying and exploring strategic alternatives including a merger, an acquisition or sale of assets or even a dissolution and liquidation of the company. Our business, operating results, financial condition and prospects are subject to significant risks and uncertainties. As we currently have no commercial products or products in later stage development, it may be difficult to secure additional funding in light of these risks and circumstances. There can be no assurance any transaction will result from our evaluation of strategic alternatives. Liquidity We have a history of incurring losses and negative cash flows from operations and have an accumulated deficit of $335.0 million through September 30, 2018 . In conjunction with our review of strategic alternatives and our decision to cease the further development of ELAD, we significantly reduced our projected monthly cash usage. Based on these actions, we believe that our existing cash and cash equivalents of $17.8 million would be sufficient to meet our known liabilities and commitments as of September 30, 2018 ; however, we expect our resource requirements to change materially to the extent we identify and enter into any strategic transactions. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. The timing and amount of our actual expenditures will be based on many factors, including, but not limited to, future research and development efforts if any, the strategic options that we pursue, and any unforeseen cash needs which may deplete current cash and cash equivalents sooner than planned. We currently have an effective shelf registration statement on Form S-3 on file with the Securities and Exchange Commission, or SEC, which expires June 2021. The shelf registration statement currently permits the offering, issuance and sale by us of up to an aggregate offering price of $200.0 million of common stock, preferred stock, warrants, debt securities or units in one or more offerings and in any combination, of which $60.0 million may be offered, issued and sold under an “at-the-market” sales agreement with Cantor Fitzgerald & Co. However, we expect the amounts available under the shelf registration statement to be significantly limited in the future if our public float remains below $75.0 million as measured on December 31, 2018, although we could use a registration statement on Form S-1 or private placements. Funding, however, is likely to be more difficult to secure due to our past clinical trials not meeting their primary or secondary endpoints. There is no assurance that we will be able to obtain additional funding if needed on acceptable terms or at all. These factors described above and our history of ongoing losses, raise substantial doubt over whether we will continue as a going concern for one year from the date of the issuance of our condensed consolidated financial statements for the nine months ended September 30, 2018 . 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, 2017 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. In addition, our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The condensed consolidated financial statements for the nine months ended September 30, 2018 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result from uncertainties related to whether we continue as a going concern. Unaudited Interim Financial Information The results for the nine months ended September 30, 2018 are not indicative of results to be expected for the year ending December 31, 2018 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, 2017, included in our Annual Report on Form 10-K filed with the SEC on March 13, 2018. 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, 2018 | |
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 have measured the fair value of certain of our property and equipment using level 3 unobservable inputs. We had no Level 3 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, accrued expenses and other current liabilities 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 We evaluate long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such events or changes in circumstances include, but are not limited to, a significant decrease in the fair value of the underlying asset or asset group, a significant decrease in the benefits realized from the acquired assets, difficulty and delays in integrating the business, or a significant change in the operations of the acquired assets or use of an asset or asset group. A long-lived asset is considered impaired if its carrying amount exceeds the estimated future undiscounted cash flows the asset or asset group is expected to generate. If a long-lived asset is considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset or asset group. Determining the fair value of an asset or asset group is highly judgmental in nature and involves the use of significant estimates and assumptions for market participants. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. We recognized an impairment charge of 1.2 million on our property and equipment in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 . We did not recognize any impairment loss for the three and nine months ended September 30, 2017. Clinical Trial Accruals As part of the process of preparing our condensed consolidated 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. As our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary, reported 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. Research and Development Research and development costs have consisted 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. If performance-based milestones are later determined not to be probable of achievement, then all previously recorded stock-based compensation expense associated with such options is reversed in the period that we make this determination. 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 held by consultants, we record stock-based compensation expense only when the performance-based milestone is achieved unless there is a performance commitment. 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 historical 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 research, manufacturing and 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, 2018 and December 31, 2017 , 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, 2018 2017 Options to purchase common stock 7,454,266 6,071,707 Warrants to purchase common stock 240,620 240,620 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 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 requires 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. We adopted this standard in the first quarter of 2018, and the adoption did not have any impact on our condensed consolidated financial statements. 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. We adopted this standard in the first quarter of 2018, and the adoption did not have a significant impact on our condensed consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, " Improvements to Non-employee Share-Based Payment Accounting, " or ASU 2018-07. ASU 2018-07, which simplifies the accounting for non-employee share-based payment transactions, specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, and early adoption is permitted. We currently expect to adopt ASU 2018-07 in the first quarter of 2019. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, " Fair Value Measurement - Disclosure Framework, " or ASU 2018-13. ASU 2018-13, modifies the disclosure requirements for fair value measurements. The amendments relate to disclosures regarding unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty and are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. |
Other Financial Information
Other Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
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 $ 6,805 $ 7,500 Leasehold improvements 4,764 4,727 Office furniture and equipment 268 234 Construction in progress — 17 11,837 12,478 Less: accumulated depreciation and amortization (10,947 ) (10,323 ) Total $ 890 $ 2,155 Depreciation and amortization expense was $204,000 and $216,000 for the three months ended September 30, 2018 and 2017 , respectively, and $628,000 and $780,000 for the nine months ended September 30, 2018 and 2017 , respectively. In September 2018, we ceased substantially all of our development efforts related to ELAD. This resulted in a substantial change in the expected use of our long-lived assets and a significant decrease in the benefits expected to be realized from these assets. Accordingly, we recognized an impairment charge of 1.2 million on our property and equipment in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 reflecting the difference in the carrying value of such property and equipment and its estimated fair value. The impairment charge is reflected as a reduction in the cost of the related assets. Accrued Expenses Accrued expenses consist of (in thousands): September 30, December 31, Accrued clinical and related costs $ 3,289 $ 5,377 Accrued compensation and related taxes 1,081 3,591 Accrued other 182 173 Total $ 4,552 $ 9,141 As a result of the completion of our VTL-308 clinical trial, we gained access to subject-specific information for estimating our clinical accruals as of September 30, 2018. This enabled us to further analyze the clinical trial accrual against the actual services performed and to adjust our clinical trial accrual based on such information. As a result of this analysis, we reduced our clinical trial accrual as of September 30, 2018 and reduced research and development expense for the three and nine months ended September 30, 2018 by $ 356,000 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
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. Leases for our office and research and development facilities expire in January 31, 2019 and the lease on our manufacturing facility expires in June 2022. Our manufacturing facility lease provides for periodic rent increases and an option to extend the term for five years. 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 $270,000 and $253,000 for the three months ended September 30, 2018 and 2017 , respectively, and $844,000 and $736,000 for the nine months ended September 30, 2018 and 2017 , respectively. Current and long-term deferred rent totaled $8,000 and $45,000 at September 30, 2018 , and $91,000 and $59,000 at December 31, 2017 , respectively. We have not estimated the contract termination costs associated with any of our leases as we have not yet reached the cease-use date. 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, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The following fair value hierarchy tables present information about each major category of our financial assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at September 30, 2018 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 14,940 $ 14,940 $ — $ — Fair Value Measurement at December 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 55,245 $ 55,245 $ — $ — There were no liabilities measured at fair value on a recurring basis as of September 30, 2018 or as of December 31, 2017 . 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. We estimated the fair value of certain property and equipment based on third-party market value appraisals, and classified the fair value of such property and equipment as a Level 3 measurement due to the significance of the unobservable inputs. 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, 2018 | |
Equity [Abstract] | |
Common Stock and Stock Warrants | Common Stock and Stock Warrants Shelf Registration Statement In May 2018 we filed a shelf registration statement on Form S-3, or the 2018 Shelf Registration Statement, which became effective in June 2018. The 2018 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 $60.0 million of our common stock that may be issued and sold under an “at-the-market” sales agreement, or ATM, with Cantor Fitzgerald & Co. No shares have been sold under the 2018 Shelf Registration Statement. We expect the amounts available under the shelf registration statement to be significantly limited in the future if our our public float remains below $75.0 million as measured on December 31, 2018. Under our prior registration statement filed on Form S-3 in May 2015, or the 2015 Shelf Registration Statement, we completed a follow-on public offering raising gross proceeds of $40.3 million in March 2017 with net proceeds to us of $37.5 million . We did not sell any shares under the 2015 Shelf Registration Statement during the nine months ended September 30, 2018 . The 2015 Shelf Registration Statement was replaced by the 2018 Shelf Registration Statement in June 2018. Common Stock Issued for Services In October 2017, we entered into an independent consulting agreement, or the Consulting Agreement, with two consulting groups, or the Consultants, pursuant to which we issued 60,000 restricted shares of our common stock to the Consultants as partial consideration for investor relations services to be rendered. The restricted shares have not been registered based on a specific exemption from the registration requirements of the Securities Act. We had the right to terminate this agreement for any reason within 180 days following the effective date, whereby each of the Consultants would have been required to promptly surrender to us 40% of the number of restricted shares issued to it. In connection with this transaction, we valued 36,000 shares, or 60% of the shares, at the quoted market price of $207,000 , or $5.75 , per share, on the date of the agreement. The remaining 24,000 shares were adjusted to fair value based on the closing price at the end of each reporting period with the expense being recorded ratably over the 180 -day period. We recognized expense in connection with these consulting shares of $115,000 during the nine months ended September 30, 2018 in general and administrative expenses. Stock Warrants We issued warrants in connection with financing activities and for consulting services prior to our initial public offering. As of September 30, 2018 , warrants for 240,620 shares of common stock were outstanding and exercisable at an exercise price of $92.99 . The warrants expire in September 2019. Stock Reserved for Future Issuance Shares reserved for future issuance at September 30, 2018 are as follows: Number of Shares Common stock reserved for issuance for outstanding options 7,454,266 Common stock options available for future grant: 2014 Equity Incentive Plan 1,548,678 2017 Inducement Equity Incentive Plan 254,708 Common stock reserved for issuance for outstanding warrants 240,620 Total common shares reserved for future issuance 9,498,272 |
Stock Compensation Plans
Stock Compensation Plans | 9 Months Ended |
Sep. 30, 2018 | |
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. 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. 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, or the Board, 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, 2018. Shares available for grant under the 2014 Plan totaled 1,548,678 shares as of September 30, 2018 . In September 2017, our board of directors approved the 2017 Inducement Equity Incentive Plan, or the Inducement Plan, and amended and restated the Inducement Plan in November 2017, or the Inducement Plan, which has terms and conditions substantially similar to our 2014 Plan. Under the Inducement Plan, 1,850,000 shares of our common stock were reserved to be used exclusively for non-qualified 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. During the nine months ended September 30, 2018 , we granted options to purchase 1,699,636 shares of our common stock under the Inducement Plan and 104,344 shares were forfeited or cancelled, leaving 254,708 shares available for grant under the Inducement Plan. Option grants made under the 2014 Plan and the 2012 Plan generally vest over one year or ratably over four years except for performance-based stock options. Our performance-based stock options were set to become fully vested and exercisable only on achievement of the performance conditions while the participant was a continuing service provider. Options currently outstanding under the Inducement Plan become 25% vested on the one year anniversary of the grant date and then vest ratably over an additional three years or ratably over four years. 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. In 2015, the Board approved grants for performance-based stock options to certain employees and consultants under the 2014 Plan. Performance-based stock options that were not forfeited would have fully vested on the third anniversary of the grant date if (i) our VTL-308 clinical trial had achieved statistical significance in its primary efficacy endpoint and (ii) the participant was a continuing service provider through the third anniversary of the grant date (as such terms are defined in the 2014 Plan). Prior to the announcement of the VTL-308 clinical trial results, we deemed the performance conditions as being probable and recorded stock-based compensation expense over the requisite service period for all performance-based stock options held by employees of $119,000 and $357,000 for the three and nine months ended September 30, 2018 , respectively. In September 2018, we announced that the VTL-308 clinical trial failed to achieve its primary efficacy endpoint. Accordingly, the performance conditions of the performance-based stock options were not met. In connection with this determination, we recorded a reversal of stock-based compensation expense of $1.7 million , including $873,000 to research and development expense and $862,000 to general and administrative expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 . The following table summarizes stock option activity under the 2012 Plan, the 2014 Plan and the Inducement Plan: Options Weighted- Weighted- Aggregate Outstanding as of January 1, 2018 6,083,482 $ 6.76 Granted 2,815,900 $ 6.05 Exercised (830 ) $ 5.35 Forfeited or expired (1,444,286 ) $ 5.33 Outstanding as of September 30, 2018 7,454,266 $ 6.77 6.5 $ — Options vested and expected to vest as of September 30, 2018 6,744,346 $ 6.87 6.2 $ — Options exercisable as of September 30, 2018 4,473,207 $ 7.34 4.7 $ — Stock-Based Compensation Expense The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2018 and 2017 was $4.18 and $2.29 , 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 under all stock plans: Nine Months Ended September 30, 2018 2017 Employees: Risk-free interest rate 2.0% - 2.5% 1.5% - 1.9% Expected dividend yield 0% 0% Expected volatility 79.7% - 82.0% 82.6% - 85.4% Expected term of options (years) 5.9 - 6.2 5.9 - 6.1 Fair value of common stock $0.45 - $8.00 $2.75 - $5.05 Non-employees: Risk-free interest rate 1.0% - 3.0% 1.0% - 1.9% Expected dividend yield 0% 0% Expected volatility 70.7% - 82.3% 71.6% - 83.9% Expected term of options (years) 0.1 - 9.3 0.8 - 4.5 Fair value of common stock $0.28 - $6.85 $2.90 - $5.05 Net 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 2018 2017 2018 2017 Employees: Research and development $ (474 ) $ 414 $ 299 $ 1,244 General and administrative 233 777 2,592 2,343 Total $ (241 ) $ 1,191 $ 2,891 $ 3,587 Non-employees: Research and development $ (11 ) $ 33 $ 80 $ 56 General and administrative (11 ) — 126 — Total $ (22 ) $ 33 $ 206 $ 56 As of September 30, 2018 , there was $9.2 million and $11,000 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 2.8 years and 2.6 years, respectively. |
Severance Costs
Severance Costs | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Severance Costs | Severance Costs In September 2018, we announced a staff reduction plan in order to reduce operating expenses and to conserve cash resources. The plan reduced our workforce by approximately 85% . As a result, we estimate we will incur approximately $2.4 million in costs for the affected employees, including severance payments, limited reimbursement of medical insurance premiums and outplacement services. The staff reduction plan was completed by the end of September 2018. During the three months ended September 30, 2018, we paid $1.7 million in severance benefits to separating employees related to the staff reduction plan. At September 30, 2018, unpaid severance costs of $704,000 are included in current liabilities in the condensed consolidated balance sheet and are expected to be paid by the end of the first quarter of 2019. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 10, 2018, Jean-Jacques Bienaimé, Douglas E. Godshall, Errol R. Halperin, J. Michael Millis, M.D. and Muneer A. Satter tendered their resignations from the Board, and as a member of each committee on which such director served in order to reduce expenses. The Board has accepted each such resignation. The decision of each of Messrs. Bienaimé, Godshall, Halperin, Satter and Dr. Millis did not result from any disagreement with the company on any matter related to our operations, policies or practices. Following the resignation of Messrs. Bienaimé, Godshall, Halperin, Satter and Dr. Millis, the size of the Board was reduced its size to four members in accordance with the provisions of our Certificate of Incorporation and bylaws. On October 11, 2018, we entered into an investment banking agreement, or the Engagement Agreement, with Ladenburg Thalmann & Co. Inc., or Ladenburg, pursuant to which Ladenburg will act as our strategic financial advisor to assist in the review of our business and assets and exploration of strategic opportunities for enhancing stockholder value, including the potential sale or merger of the company. Under the Engagement Agreement, as compensation for the services provided by Landenburg, the Company shall pay, or cause to be paid, to Ladenburg, the following nonrefundable fees: (i) if the Company consummates a Transaction, it shall pay to Ladenburg a transaction fee of $1,000,000 (the “Transaction Fee”) at the closing of the Transaction, (ii) a retainer fee of $75,000 , which is creditable against the Transaction Fee, and (iii) an opinion fee of $250,000 . While we have commenced evaluating our available options, no conclusion as to any specific option or transaction has been reached, nor has any specific timetable been fixed for this effort, and there can be no assurance that any strategic or financial option or transaction will be presented, implemented or consummated. On October 25, 2018, we received a letter from the staff of Nasdaq providing notification that, for the previous 30 consecutive business days, the closing bid price for our common stock was below the minimum $1.00 per share requirement, or the Bid Price Requirement, for continued listing on the Nasdaq Global Select Market. The notification had no immediate effect on the listing of our common stock. In accordance with Nasdaq listing rules, we are afforded 180 calendar days, or until April 23, 2019, to regain compliance with the Bid Price Requirement. If our common stock is delisted, this would, among other things, substantially impair our ability to raise additional funds to sustain our operations and our ability to successfully enter into strategic transactions, and could result in the loss of investor interest. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
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, 2017 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. In addition, our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The condensed consolidated financial statements for the nine months ended September 30, 2018 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that could result from uncertainties related to whether we continue as a going concern. Unaudited Interim Financial Information The results for the nine months ended September 30, 2018 are not indicative of results to be expected for the year ending December 31, 2018 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, 2017, included in our Annual Report on Form 10-K filed with the SEC on March 13, 2018. 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 have measured the fair value of certain of our property and equipment using level 3 unobservable inputs. We had no Level 3 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, accrued expenses and other current liabilities 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 We evaluate long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such events or changes in circumstances include, but are not limited to, a significant decrease in the fair value of the underlying asset or asset group, a significant decrease in the benefits realized from the acquired assets, difficulty and delays in integrating the business, or a significant change in the operations of the acquired assets or use of an asset or asset group. A long-lived asset is considered impaired if its carrying amount exceeds the estimated future undiscounted cash flows the asset or asset group is expected to generate. If a long-lived asset is considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset or asset group. Determining the fair value of an asset or asset group is highly judgmental in nature and involves the use of significant estimates and assumptions for market participants. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. |
Clinical Trial Accruals | Clinical Trial Accruals As part of the process of preparing our condensed consolidated 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. As our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary, reported 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. |
Research and Development | Research and Development Research and development costs have consisted 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. If performance-based milestones are later determined not to be probable of achievement, then all previously recorded stock-based compensation expense associated with such options is reversed in the period that we make this determination. 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 held by consultants, we record stock-based compensation expense only when the performance-based milestone is achieved unless there is a performance commitment. 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 historical 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 research, manufacturing and 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, 2018 and December 31, 2017 , 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 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 requires 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. We adopted this standard in the first quarter of 2018, and the adoption did not have any impact on our condensed consolidated financial statements. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 2017 Options to purchase common stock 7,454,266 6,071,707 Warrants to purchase common stock 240,620 240,620 |
Other Financial Information (Ta
Other Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 $ 6,805 $ 7,500 Leasehold improvements 4,764 4,727 Office furniture and equipment 268 234 Construction in progress — 17 11,837 12,478 Less: accumulated depreciation and amortization (10,947 ) (10,323 ) Total $ 890 $ 2,155 |
Schedule of Accrued Expenses | Accrued expenses consist of (in thousands): September 30, December 31, Accrued clinical and related costs $ 3,289 $ 5,377 Accrued compensation and related taxes 1,081 3,591 Accrued other 182 173 Total $ 4,552 $ 9,141 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | The following fair value hierarchy tables present information about each major category of our financial assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at September 30, 2018 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 14,940 $ 14,940 $ — $ — Fair Value Measurement at December 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 55,245 $ 55,245 $ — $ — |
Common Stock and Stock Warran_2
Common Stock and Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Shares Reserved for Future Issuance | Shares reserved for future issuance at September 30, 2018 are as follows: Number of Shares Common stock reserved for issuance for outstanding options 7,454,266 Common stock options available for future grant: 2014 Equity Incentive Plan 1,548,678 2017 Inducement Equity Incentive Plan 254,708 Common stock reserved for issuance for outstanding warrants 240,620 Total common shares reserved for future issuance 9,498,272 |
Stock Compensation Plans (Table
Stock Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity under the 2012 Plan, the 2014 Plan and the Inducement Plan: Options Weighted- Weighted- Aggregate Outstanding as of January 1, 2018 6,083,482 $ 6.76 Granted 2,815,900 $ 6.05 Exercised (830 ) $ 5.35 Forfeited or expired (1,444,286 ) $ 5.33 Outstanding as of September 30, 2018 7,454,266 $ 6.77 6.5 $ — Options vested and expected to vest as of September 30, 2018 6,744,346 $ 6.87 6.2 $ — Options exercisable as of September 30, 2018 4,473,207 $ 7.34 4.7 $ — |
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 under all stock plans: Nine Months Ended September 30, 2018 2017 Employees: Risk-free interest rate 2.0% - 2.5% 1.5% - 1.9% Expected dividend yield 0% 0% Expected volatility 79.7% - 82.0% 82.6% - 85.4% Expected term of options (years) 5.9 - 6.2 5.9 - 6.1 Fair value of common stock $0.45 - $8.00 $2.75 - $5.05 Non-employees: Risk-free interest rate 1.0% - 3.0% 1.0% - 1.9% Expected dividend yield 0% 0% Expected volatility 70.7% - 82.3% 71.6% - 83.9% Expected term of options (years) 0.1 - 9.3 0.8 - 4.5 Fair value of common stock $0.28 - $6.85 $2.90 - $5.05 |
Schedule of Stock-based Compensation Expense for Stock Awards Recognized | 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 2018 2017 2018 2017 Employees: Research and development $ (474 ) $ 414 $ 299 $ 1,244 General and administrative 233 777 2,592 2,343 Total $ (241 ) $ 1,191 $ 2,891 $ 3,587 Non-employees: Research and development $ (11 ) $ 33 $ 80 $ 56 General and administrative (11 ) — 126 — Total $ (22 ) $ 33 $ 206 $ 56 |
Description of Business and B_2
Description of Business and Basis of Financial Statements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | May 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||||
Accumulated deficit | $ 334,964 | $ 295,953 | |||
Cash and cash equivalents | 17,798 | $ 56,901 | $ 66,391 | $ 59,991 | |
Amount available for issuance | 200,000 | ||||
Class of Stock [Line Items] | |||||
Entity public float | 75,000 | $ 75,000 | |||
At-The-Market Sales Agreement | |||||
Class of Stock [Line Items] | |||||
Maximum aggregate offering price of securities | $ 60,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Line Items] | ||||
Impairment loss | $ 1,219 | $ 0 | $ 1,219 | $ 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 |
Summary of Significant Accoun_5
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, 2018 | Sep. 30, 2017 | |
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) | 7,454,266 | 6,071,707 |
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 | 240,620 |
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, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 11,837 | $ 12,478 |
Less: accumulated depreciation and amortization | (10,947) | (10,323) |
Property and equipment, net | 890 | 2,155 |
Manufacturing, clinical and laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,805 | 7,500 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,764 | 4,727 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 268 | 234 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 0 | $ 17 |
Other Financial Information - A
Other Financial Information - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Depreciation and amortization expense | $ 204,000 | $ 216,000 | $ 628,000 | $ 780,000 |
Impairment loss | 1,219,000 | $ 0 | 1,219,000 | $ 0 |
Reduction in clinical trial accrual | 356,000 | 356,000 | ||
Reduction in research and development expense | $ 356,000 | $ 356,000 |
Other Financial Information -_2
Other Financial Information - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued clinical and related costs | $ 3,289 | $ 5,377 |
Accrued compensation and related taxes | 1,081 | 3,591 |
Accrued other | 182 | 173 |
Total | $ 4,552 | $ 9,141 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Total rent, property taxes and routine maintenance expense under operating leases | $ 270 | $ 253 | $ 844 | $ 736 | |
Current deferred rent | 8 | 8 | $ 91 | ||
Long-term deferred rent | $ 45 | $ 45 | $ 59 |
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, 2018 | Dec. 31, 2017 |
Assets | ||
Assets | $ 14,940 | $ 55,245 |
Level 1 | ||
Assets | ||
Assets | 14,940 | 55,245 |
Level 2 | ||
Assets | ||
Assets | 0 | 0 |
Level 3 | ||
Assets | ||
Assets | $ 0 | $ 0 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value on a recurring basis | $ 0 | $ 0 |
Common Stock and Stock Warran_3
Common Stock and Stock Warrants - Shelf Registration Statement and Private Placement of Common Stock (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | May 31, 2018 | |
Class of Stock [Line Items] | ||||
Maximum aggregate offering price of common stock, preferred stock, warrants, debt securities, and/or units | $ 200,000,000 | |||
Maximum common stock shares authorized (in shares) | 2,500,000 | |||
Maximum aggregate offering price of common stock under ATM agreement | $ 60,000,000 | |||
Entity public float | $ 75,000,000 | $ 75,000,000 | ||
Gross proceeds from additional offering | $ 40,300,000 | |||
Net proceeds from additional offering | $ 37,500,000 | $ 0 | $ 37,529,000 |
Common Stock and Stock Warran_4
Common Stock and Stock Warrants Common Stock and Stock Warrants - Common Stock Issued for Services (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Class of Stock [Line Items] | ||||
Common stock issued for services, expense recognized in general and administrative | $ 115 | $ 0 | ||
Restricted Stock | ||||
Class of Stock [Line Items] | ||||
Common stock issued for services (in shares) | 60,000 | |||
Expense recognition period | 180 days | 180 days | ||
Percent of shares to be surrendered at termination | 40.00% | |||
Shares quoted at market price (in shares) | 36,000 | |||
Percent of shares quoted at market price | 60.00% | |||
Common stock issued for services | $ 207 | |||
Market price of shares (in usd per share) | $ 5.75 | |||
Shares adjusted to fair value (in shares) | 24,000 |
Common Stock and Stock Warran_5
Common Stock and Stock Warrants - Warrants (Details) | Sep. 30, 2018$ / sharesshares |
Class of Stock [Line Items] | |
Exercise price of warrants (in USD per share) | $ / shares | $ 92.99 |
Common stock reserved for issuance for outstanding warrants | |
Class of Stock [Line Items] | |
Number of warrants outstanding (in shares) | shares | 240,620 |
Common Stock and Warrants - Sha
Common Stock and Warrants - Shares Reserved for Future Issuance (Details) | Sep. 30, 2018shares |
Class of Stock [Line Items] | |
Total common shares reserved for future issuance (in shares) | 9,498,272 |
Common stock reserved for issuance for outstanding options | |
Class of Stock [Line Items] | |
Total common shares reserved for future issuance (in shares) | 7,454,266 |
Common stock reserved for issuance for outstanding warrants | |
Class of Stock [Line Items] | |
Total common shares reserved for future issuance (in shares) | 240,620 |
2014 Equity Incentive Plan | Common stock options available for future grant: | |
Class of Stock [Line Items] | |
Total common shares reserved for future issuance (in shares) | 1,548,678 |
2017 Inducement Equity Incentive Plan | Common stock options available for future grant: | |
Class of Stock [Line Items] | |
Total common shares reserved for future issuance (in shares) | 254,708 |
Stock Compensation Plans - Addi
Stock Compensation Plans - Additional Information (Detail) - USD ($) | Apr. 16, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Nov. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 2,815,900 | |||||
Forfeited or expired (in shares) | 1,444,286 | |||||
Expiration period from grant date | 10 years | |||||
Performance-based stock options outstanding (in shares) | 7,454,266 | 7,454,266 | 6,083,482 | |||
Stock based compensation expense (reversal) | $ (119,000) | $ (357,000) | ||||
Weighted-average grant date fair value of stock options granted (usd per share) | $ 4.18 | $ 2.29 | ||||
Reversal of stock-based compensation | 1,700,000 | $ (1,700,000) | ||||
Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation cost related to unvested employee stock option awards | 9,200,000 | $ 9,200,000 | ||||
Remaining weighted-average vesting period | 2 years 9 months 18 days | |||||
Non-Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation cost related to unvested employee stock option awards | $ 11,000 | $ 11,000 | ||||
Remaining weighted-average vesting period | 2 years 7 months 6 days | |||||
Inducement Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for grant | 254,708 | 254,708 | 1,850,000 | |||
Granted (in shares) | 1,699,636 | |||||
Forfeited or expired (in shares) | 104,344 | |||||
2012 Stock Option Plan And 2014 Equity Incentive Plan | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options vesting period | 1 year | |||||
2012 Stock Option Plan And 2014 Equity Incentive Plan | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options vesting period | 4 years | |||||
2014 Equity Incentive 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 | |||||
Percentage of outstanding shares of common stock for annual increase in shares available for issuance | 3.00% | |||||
Shares available for grant | 1,548,678 | 1,548,678 | ||||
Share-based Compensation Award, Tranche One | Inducement Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 25.00% | |||||
Share-based Compensation Award, Tranche Two | Inducement Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 25.00% | |||||
Share-based Compensation Award, Tranche Three | Inducement Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 25.00% | |||||
Share-Based Compensation Award, Tranche Four | Inducement Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage | 25.00% | |||||
Research and Development | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Reversal of stock-based compensation | $ 873,000 | $ (873,000) | ||||
General and Administrative | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Reversal of stock-based compensation | $ 862,000 | $ (862,000) |
Stock Compensation Plans - Summ
Stock Compensation Plans - Summary of Stock Option Activity (Detail) | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Options | |
Outstanding, Beginning balance (in shares) | shares | 6,083,482 |
Granted (in shares) | shares | 2,815,900 |
Exercised (in shares) | shares | (830) |
Forfeited or expired (in shares) | shares | (1,444,286) |
Outstanding, Ending balance (in shares) | shares | 7,454,266 |
Options vested and expected to vest, Ending balance (in shares) | shares | 6,744,346 |
Options exercisable, Ending balance (in shares) | shares | 4,473,207 |
Weighted- Average Exercise Price | |
Outstanding, Beginning balance (usd per share) | $ / shares | $ 6.76 |
Granted (usd per share) | $ / shares | 6.05 |
Exercised (usd per share) | $ / shares | 5.35 |
Forfeited or expired (usd per share) | $ / shares | 5.33 |
Outstanding, Ending balance (usd per share) | $ / shares | 6.77 |
Options vested and expected to vest, Weighted-Average Exercise Price, Ending balance (usd per share) | $ / shares | 6.87 |
Options exercisable, Weighted-Average Exercise Price, Ending balance (usd per share) | $ / shares | $ 7.34 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, Weighted-Average Remaining Contractual Term, Ending balance | 6 years 5 months 23 days |
Options vested and expected to vest , Weighted-Average Remaining Contractual Term, Ending balance | 6 years 2 months 12 days |
Options exercisable, Weighted-Average Remaining Contractual Term, Ending balance | 4 years 8 months 19 days |
Outstanding, Aggregate Intrinsic Value, Ending balance | $ | $ 0 |
Options vested and expected to vest , Aggregate Intrinsic Value, Ending balance | $ | 0 |
Options exercisable, Aggregate Intrinsic Value, Ending balance | $ | $ 0 |
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, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | |
Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 2.00% | 1.50% |
Risk-free interest rate, maximum | 2.50% | 1.90% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 79.70% | 82.60% |
Expected volatility, maximum | 82.00% | 85.40% |
Employees | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (years) | 5 years 10 months 24 days | 5 years 10 months 24 days |
Fair value of common stock | $ 0.45 | $ 2.75 |
Employees | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (years) | 6 years 2 months 12 days | 6 years 1 month 6 days |
Fair value of common stock | $ 8 | $ 5.05 |
Non-Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.00% | 1.00% |
Risk-free interest rate, maximum | 3.00% | 1.90% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 70.70% | 71.60% |
Expected volatility, maximum | 82.30% | 83.90% |
Non-Employees | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (years) | 1 month 6 days | 9 months 18 days |
Fair value of common stock | $ 0.28 | $ 2.90 |
Non-Employees | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term of options (years) | 9 years 3 months 18 days | 4 years 6 months |
Fair value of common stock | $ 6.85 | $ 5.05 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 3,097 | $ 3,643 | ||
Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ (241) | $ 1,191 | 2,891 | 3,587 |
Employees | Research and Development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | (474) | 414 | 299 | 1,244 |
Employees | General and Administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 233 | 777 | 2,592 | 2,343 |
Non-Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | (22) | 33 | 206 | 56 |
Non-Employees | Research and Development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | (11) | 33 | 80 | 56 |
Non-Employees | General and Administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ (11) | $ 0 | $ 126 | $ 0 |
Severance Costs - Additional In
Severance Costs - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||
Severance Costs | $ 2,395 | $ 0 | $ 2,395 | $ 0 | |
Staff Reduction Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Approximate reduction in workforce, percent | 85.00% | ||||
Severance Costs | 1,700 | ||||
Staff Reduction Plan | Employee Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expected cost for staff reduction plan | $ 2,400 | 2,400 | 2,400 | ||
Unpaid severance costs included in other current liabilities | $ 704 | $ 704 | $ 704 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - Subsequent Event $ in Thousands | Oct. 11, 2018USD ($) |
Subsequent Event [Line Items] | |
Transaction fee on investment banking agreement | $ 1,000 |
Retainer fee on investment banking agreement | 75 |
Opinion fee on investment banking agreement | $ 250 |