Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 06, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | Xencor Inc | ||
Entity Central Index Key | 1326732 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $151,512,499 | ||
Entity Common Stock, Shares Outstanding | 31,472,763 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash | $54,649 | $77,975 |
Accounts receivable | 2,966 | 59 |
Prepaid expenses and other current assets | 134 | 60 |
Total current assets | 57,749 | 78,094 |
Property and equipment | ||
Computers, software and equipment | 4,270 | 3,514 |
Furniture and fixtures | 97 | 89 |
Leasehold improvements | 3,086 | 3,081 |
Less accumulated depreciation and amortization | -6,554 | -6,377 |
Property and equipment, net | 899 | 307 |
Other assets | ||
Patents, licenses, and other intangible assets, net | 9,116 | 8,814 |
Other assets | 59 | 100 |
Total other assets | 9,175 | 8,914 |
Total assets | 67,823 | 87,315 |
Current liabilities | ||
Accounts payable | 1,691 | 2,633 |
Accrued expenses | 2,251 | 1,393 |
Current portion of deferred revenue | 2,254 | 3,444 |
Current portion of capital lease obligations | 9 | |
Total current liabilities | 6,196 | 7,479 |
Deferred revenue, less current portion | 2,337 | 6,302 |
Capital lease obligations, less current portion | 1 | |
Total liabilities | 8,533 | 13,782 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.01 par value: 200,000,000 authorized shares; 31,434,272 issued and outstanding shares at December 31, 2014 and 31,354,467 issued and outstanding at December 31, 2013 | 314 | 314 |
Additional paid-in capital | 302,969 | 300,790 |
Accumulated deficit | -243,993 | -227,571 |
Total stockholders' equity | 59,290 | 73,533 |
Total liabilities and stockholders' equity | $67,823 | $87,315 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Condensed Balance Sheets | ||
Common Stock, par value (in dollars per share) | $0.01 | $0.01 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 31,434,272 | 31,354,467 |
Common Stock, shares outstanding | 31,434,272 | 31,354,467 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue | |||
Collaborations, licenses and milestones, (including related party revenue of zero for 2014 and 2013 and $0.75 million for 2012, respectively) | $9,520 | $10,172 | $9,524 |
Operating expenses | |||
Research and development (including equity-based compensation of $1,013, $158 and $11 for 2014, 2013 and 2012, respectively) | 18,516 | 17,000 | 12,668 |
General and administrative (including equity-based compensation of $848, $40 and $18 for 2014, 2013 and 2012, respectively) | 7,461 | 3,692 | 3,086 |
Total operating expenses | 25,977 | 20,692 | 15,754 |
Loss from operations | -16,457 | -10,520 | -6,230 |
Other income (expenses) | |||
Interest income | 33 | 14 | 11 |
Interest expense | -9 | -1,213 | -2,461 |
Other (expense) income | 11 | 16 | 86 |
Loss on settlement of notes | -48,556 | ||
Total other income (expense), net | 35 | -49,739 | -2,364 |
Net loss | -16,422 | -60,259 | -8,594 |
Deemed contribution (distribution) on exchange of preferred stock | 144,765 | ||
Net income (loss) attributable to common stockholders | ($16,422) | $84,506 | ($8,594) |
Net income (loss) per share attributable to common shareholders: | |||
Basic (in dollars per share) | ($0.52) | $34.18 | ($118.86) |
Diluted (in dollars per share) | ($0.52) | ($3.85) | ($118.86) |
Weighted average shares used to compute net loss per share attributable to common stockholders: | |||
Basic (in shares) | 31,390,631 | 2,472,581 | 72,302 |
Diluted (in shares) | 31,390,631 | 15,645,789 | 72,302 |
Condensed_Statements_of_Operat1
Condensed Statements of Operations (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related party revenue | $0 | $0 | $750,000 |
Equity-based compensation | 1,861,000 | 198,000 | 29,000 |
Research and development | |||
Equity-based compensation | 1,013,000 | 158,000 | 11,000 |
General and administrative | |||
Equity-based compensation | $848,000 | $40,000 | $18,000 |
Statements_of_Mezzanine_Equity
Statements of Mezzanine Equity and Stockholdersb Equity (USD $) | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Series E Convertible Preferred Stock | Series A-1 Convertible Preferred Stock | Series A-2 Convertible Preferred Stock | Total |
In Thousands, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2012 | $3,550 | $12,375 | $50,000 | $20,000 | $60,841 | |||
Balance (in shares) at Dec. 31, 2012 | 857,792 | 1,328,941 | 2,416,281 | 7,936,483 | 25,245,566 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | -60,259 | |||||||
Stock-based compensation expense | 198 | |||||||
Series A-1 shares issued in exchange of convertible notes | 70,689 | |||||||
Series A-1 shares issued in exchange of convertible notes (in shares) | 45,902,321 | |||||||
Sale of Series A-1 preferred stock | 13,355 | |||||||
Sale of Series A-1 preferred stock (in shares) | 7,352,940 | |||||||
Exchange of Series A-1 and A-2 preferred for common stock | -78,526 | -1,075 | ||||||
Exchange of Series A-1 and A-2 preferred for common stock (in shares) | -49,671,392 | -1,851,814 | ||||||
Exchange of Series A-E Preferred for Series A-1 preferred stock | -3,550 | -12,375 | -50,000 | -20,000 | -60,841 | 3,045 | ||
Exchange of Series A-E Preferred for Series A-1 preferred stock (in shares) | -857,792 | -1,328,941 | -2,416,281 | -7,936,483 | -25,245,566 | 1,977,137 | ||
Exchange of Series A-1 preferred for Series A-2 preferred stock | ($8,563) | $1,075 | ||||||
Exchange of Series A-1 preferred for Series A-2 preferred stock (in shares) | -5,561,006 | 1,851,814 | ||||||
Balance at Dec. 31, 2013 |
Statements_of_Mezzanine_Equity1
Statements of Mezzanine Equity and Stockholdersb Equity (Deficit) (USD $) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
In Thousands, except Share data, unless otherwise specified | ||||
Balance at Dec. 31, 2011 | $1 | $1,014 | ($158,718) | ($157,703) |
Balance (in shares) at Dec. 31, 2011 | 72,302 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | -8,594 | -8,594 | ||
Stock-based compensation expense | 29 | 29 | ||
Balance at Dec. 31, 2012 | 1 | 1,043 | -167,312 | -166,268 |
Balance (in shares) at Dec. 31, 2012 | 72,302 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Deemed contribution on exchange of Series A-E Preferred Stock for Series A-1 | 143,681 | 143,681 | ||
Deemed contribution on exchange of Series A-1 preferred for Series A-2 preferred stock | 7,489 | 7,489 | ||
Deemed dividend on sale of Series A-1 preferred | -3,429 | -3,429 | ||
Exchange of Series A-1 and A-2 preferred for common stock | 166 | 79,435 | 79,601 | |
Exchange of Series A-1 and A-2 preferred for common stock (in shares) | 16,620,274 | |||
Sale of common stock, net of issuance cost | 146 | 72,361 | 72,507 | |
Sale of common stock, net of issuance cost (in shares) | 14,639,500 | |||
Issuance of common stock upon exercise and vesting of stock awards | 1 | 12 | 13 | |
Issuance of common stock upon exercise and vesting of stock awards (in shares) | 22,391 | |||
Net loss | -60,259 | -60,259 | ||
Stock-based compensation expense | 198 | 198 | ||
Balance at Dec. 31, 2013 | 314 | 300,790 | -227,571 | 73,533 |
Balance (in shares) at Dec. 31, 2013 | 31,354,467 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise and vesting of stock awards | 11 | 11 | ||
Issuance of common stock upon exercise and vesting of stock awards (in shares) | 15,941 | |||
Issuance of common stock under the Employee Stock Purchase Plan | 307 | 307 | ||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 63,864 | |||
Net loss | -16,422 | -16,422 | ||
Stock-based compensation expense | 1,861 | 1,861 | ||
Balance at Dec. 31, 2014 | $314 | $302,969 | ($243,993) | $59,290 |
Balance (in shares) at Dec. 31, 2014 | 31,434,272 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net loss | ($16,422) | ($60,259) | ($8,594) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 882 | 711 | 527 |
Stock-based compensation | 1,861 | 198 | 29 |
Abandonment of capitalized intangible assets | 509 | 205 | 388 |
Gain from non-monetary exchange | -754 | ||
Gain on disposal of assets | -2 | -16 | -86 |
Loss on exchange of notes for preferred stock | 48,556 | ||
Accrued interest on convertible promissory notes (See Note 3) | 1,211 | 2,456 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | -2,907 | 293 | -325 |
Prepaid expenses and other assets | -73 | 115 | -90 |
Other assets | 41 | -20 | 15 |
Accounts payable | -943 | 1,319 | -522 |
Accrued expenses | 859 | 109 | 460 |
Deferred revenue | -5,156 | 2,125 | -4,556 |
Net cash used in operating activities | -21,351 | -5,453 | -11,052 |
Cash flows from investing activities | |||
Purchase of intangible assets | -1,505 | -1,158 | -1,217 |
Purchase of property and equipment | -780 | -136 | -41 |
Proceeds from sale of property and equipment | 2 | 16 | 97 |
Net cash used in investing activities | -2,283 | -1,278 | -1,161 |
Cash flows from financing activities | |||
Preferred stock issuance cost | -116 | ||
Proceeds from the sale of Series A-1 preferred | 10,000 | ||
Proceeds from issuance of common stock upon exercise of stock awards | 9 | 13 | |
Proceeds from issuance of common stock under the Employee Stock Purchase Plan | 307 | ||
Proceeds from sale of common stock | 80,517 | ||
Payments of Initial Public Offering costs | -8,010 | ||
Payments on capital lease obligations | -8 | -10 | -12 |
Net cash provided by financing activities | 308 | 82,394 | -12 |
Net increase (decrease) in cash | -23,326 | 75,663 | -12,225 |
Cash, beginning of period | 77,975 | 2,312 | 14,537 |
Cash, end of period | 54,649 | 77,975 | 2,312 |
Cash paid for: | |||
Interest | 9 | 1 | 3 |
Taxes | 1 | ||
Supplemental Schedule of Noncash Investing and Financing Activities | |||
Capitalization of licensing rights acquired in non-monetary exchange | 754 | ||
Equipment acquired under capital lease | 22 | ||
Settlement of notes payable for preferred stock | $22,134 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies | |||||||||||||
Description of Business | ||||||||||||||
Xencor, Inc. (we, us, our, or the Company) was incorporated in California in 1997 and reincorporated in Delaware in September 2004. We are a clinical‑stage biopharmaceutical company focused on discovering and developing engineered monoclonal antibodies to treat severe and life‑threatening diseases with unmet medical needs. We use our proprietary XmAb technology platform to create next‑generation antibody product candidates designed to treat autoimmune and allergic diseases, cancer, and other conditions. We focus on the portion of the antibody that interacts with multiple segments of the immune system, referred to as the Fc domain, which is constant and interchangeable among antibodies. Our engineered Fc domains, the XmAb technology, are applied to our pipeline of antibody‑based drug candidates to increase immune inhibition, improve cytotoxicity, extend half‑life and most recently bispecific antibodies. | ||||||||||||||
Our operations are based in Monrovia and San Diego, California. We operate in one segment. | ||||||||||||||
Basis of Presentation | ||||||||||||||
The Company’s financial statements as of December 31, 2014, and 2013 and for the years then‑ended have been prepared in accordance with accounting principles generally accepted in the United States. | ||||||||||||||
Reverse Stock Split and Conversion of Preferred Stock | ||||||||||||||
On November 1, 2013, our board of directors and the requisite holders of our voting stock authorized the filing of a certificate of amendment to our amended and restated certificate of incorporation for the purposes of effecting a 3.1‑for‑1 reverse split of the common stock. The certificate of amendment was filed on November 1, 2013 and the stock split became effective as of that date. Accordingly, all references to numbers of common shares, including the number of common shares on an as‑if‑converted basis, per‑share data and share prices and exercise prices in the accompanying financial statements have been adjusted to reflect the reverse stock split on a retroactive basis. | ||||||||||||||
Each 3.1 shares of convertible preferred stock was convertible, at the stockholder’s option, into one share of common stock. Additionally, each share of convertible preferred stock was automatically converted into common stock, at the then‑effective conversion rate upon the effective date of a registration statement filed with the SEC under the Securities Act or Exchange act. | ||||||||||||||
On December 3, 2013, our registration statement on Form S‑1 related to our initial public offering became effective and 49,671,392 shares of Series A‑1 preferred stock converted into 16,022,915 shares of common stock and 1,851,814 shares of Series A‑2 preferred stock converted into 597,359 shares of common stock. | ||||||||||||||
Use of Estimates | ||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. The new pronouncement is effective for reporting periods beginning after December 15, 2016 and will replace most of the existing revenue recognition guidance within the United States GAAP. The new pronouncement permits the use of either the retroactive or cumulative effect transition method. Early adoption is not permitted. | ||||||||||||||
The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures. | ||||||||||||||
Revenue Recognition | ||||||||||||||
We have, to date, earned revenue from research collaborations, which may include research and development services, licenses of our internally‑developed technologies, or a combination of both. We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; transfer or access of technology has been completed or services have been rendered; our price to the customer is fixed or determinable and collectability is reasonably assured. | ||||||||||||||
The terms of our license and research and development agreements generally include nonrefundable upfront payments, research funding, license fees and, milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain clinical, regulatory and sales‑based events, as well as royalties on sales of any commercialized products. | ||||||||||||||
The terms of our licensing agreements include non‑refundable upfront fees, annual licensing fees, and contractual payment obligations for the achievement of pre‑defined preclinical, clinical, regulatory and sales‑based events by our partners. The licensing agreements also include royalties on sales of any commercialized products by our partners. | ||||||||||||||
Multiple‑Element Revenue Arrangements. Certain of our collaboration and license agreements represent multiple‑element revenue arrangements. To account for such transactions, we determine the elements, or deliverables, included in the arrangement and determine which deliverables are separate units for accounting purposes. We consider delivered items to be separate units of accounting if the delivered items have stand‑alone value to the customer. If the delivered items are separate units we allocate the consideration received or due under the arrangement to the various elements based on each elements’ relative selling price. The identification of individual elements in a multiple‑element arrangement and the estimation of the selling price of each element involve significant judgment, including consideration as to whether each delivered element has standalone value to the customer. We determine the estimated selling price for deliverables within each arrangement using vendor‑specific objective evidence (VSOE) of selling price, if available, or third‑party evidence of selling price if VSOE is not available, or our best evidence of selling price if neither VSOE nor third‑party evidence is available. | ||||||||||||||
Determining the best estimate of selling price for a deliverable requires significant judgment. We use our best estimate of selling price to estimate the selling price for licenses to our technologies and product candidates, since we do not have VSOE or third‑party evidence of selling for these deliverables. The basis of our estimate of selling price is the arm’s length negotiation with the licensee that occurs in each transaction. The potential value of our technology to a licensee in a transaction depends on a variety of factors unique to each transaction. Factors that impact the negotiation and hence that we consider in our estimates center on the specific product candidate and include: the product candidate’s potential market size, the product candidate’s stage of development, the existence of competitive technologies that could be substituted for ours by the licensee and the scientific assessment of the product candidate’s likelihood of success at various development stages. The most common deliverable is the commercial license for our technology in the product candidate, and frequently a research license with an option for commercial license. The upfront payments, annual license fees, contingent payments, milestones and royalties relate to these licenses and/or options and depend on the product‑specific factors described above. The other significant deliverable is research and development services and the price for these depends on estimates for our personnel and supply costs and the costs of third‑party contract research organizations necessary to support the services. | ||||||||||||||
We recognize consideration allocated to an individual element when all other revenue recognition criteria are met for that element. Our multiple‑element revenue arrangements may include the following: | ||||||||||||||
· | License arrangements. The deliverables under our collaboration and license agreements generally include exclusive or non‑exclusive licenses to one or more of our technologies. The technologies can be applied to a collaborator’s product candidates for discovery, development, manufacturing and commercialization. We will also enter into agreements for the exclusive or non‑exclusive licenses to our internally developed product candidates. To account for this element of the arrangement, we evaluate whether the exclusive or non‑exclusive license has standalone value apart from the undelivered elements to the collaboration partner, which may include research and development services or options for commercial licenses, based on the consideration of the facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and other market participants. We recognize arrangement consideration allocated to licenses upon delivery of the license, if the facts and circumstances indicate the license has standalone value apart from the undelivered elements. If facts and circumstances indicate that the delivered license does not have standalone value from the undelivered elements, we recognize the revenue as a combined unit of accounting. In those circumstances we recognize revenue from non‑refundable upfront fees in the same manner as the undelivered item(s), which is generally the period over which we provide research and developments services. | |||||||||||||
· | Research and Development Services. The deliverables under our collaboration and license arrangements may include research and development services we perform on behalf of or with the collaboration partner. As the provision of research and development services is an integral part of our operations and we may be principally responsible for the performance of these services under the agreements, we recognize revenue on a gross basis for research and development services as we perform those services. Additionally, we recognize research related funding under collaboration research and development efforts as revenue as we perform or deliver the related services in accordance with contract terms. | |||||||||||||
Milestone Revenue. Our collaboration and license agreements generally include contingent contractual payments related to achievement of specific research, development and regulatory milestones and sales‑based milestones that are based solely upon the performance of the licensor or collaborator. Research, development and regulatory contingent contractual payments and milestone payments are typically payable under our collaborations when our collaborator selects a compound, or initiates or advances a covered product candidate in preclinical or clinical development, upon submission for marketing approval of a covered product with regulatory authorities, upon receipt of actual marketing approvals of a covered product or for additional indications, or upon the first commercial sale of a covered product. Sales‑based contingent contractual payments are typically payable when annual sales of a covered product reach specific levels. | ||||||||||||||
At the inception of each arrangement that includes contingent contractual payments, we evaluate whether each potential payment and milestone is substantive and at risk to both parties based on the basis of the contingent nature of the milestone event. We evaluate factors such as scientific, regulatory, commercial and other risks that we must overcome to achieve the respective milestone event, whether the contractual payments due at each milestone event is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment and whether the contingent contractual payment relates solely to past performance. Additionally, certain of our product development and technology license arrangements may include milestone payments related to the achievement of specific research and development milestones, which are achieved in whole or in part on our performance. | ||||||||||||||
We recognize any payment that is contingent upon the achievement of a substantive milestone entirely in the period in which the milestone is achieved. A milestone is defined as an event that can only be achieved based in whole or in part either on our performance, or the performance of our collaborators, or the occurrence of a specific outcome resulting from our past performance for which there is a substantive uncertainty at the date the arrangement is entered into that the event will be achieved. | ||||||||||||||
Collaborative Research and Licensing Agreements | ||||||||||||||
Novo Nordisk A/S | ||||||||||||||
In December 2014, we entered into a Collaboration and License Agreement with Novo Nordisk A/S (Novo). Under the terms of the agreement, we granted Novo a research license to use certain Xencor technologies including our bispecific, IIb, Xtend and others during a two year research term. We will provide research support for four FTE’s in collaboration with Novo to apply our technologies to Novo provided targets to identify compounds with improved properties. Novo has an option to extend the research term for another twelve months upon written notice to us and payment of another year of research funding. At the end of the research term, Novo will have a commercial license to develop and commercialize any new targets identified during the research term. | ||||||||||||||
Under the agreement, in January 2015, we received an upfront payment of $2.5 million and we will receive research funding of $1.6 million per year over the research term. We are also eligible to receive $2.0 million in milestone payments upon the successful completion of certain projects during the research term. In addition, if Novo identifies a compound from the collaboration to advance into clinical development, we are eligible to receive future development, regulatory and commercial milestone payments and royalties. The potential future milestones total $167.3 million and include $36.3 million in development milestones, $51.0 million in regulatory milestones and $80.0 million in sales milestones. | ||||||||||||||
We determined that the deliverables under the arrangement were the research license to our technologies and the research support. We believe that the research support and the technologies are integral to each other and are not separate units of accounting. The commercial license did not have standalone value at inception of the arrangement due to the uncertainty of identifying a commercial target. | ||||||||||||||
At inception of the arrangement, we determined that consideration under the agreement is represented by the upfront payment and the research funding and we are recognizing the $2.5 million upfront payment as income over the two year research term. The research funding is being recognized into income over the period that the services are being provided. We determined that future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones. | ||||||||||||||
During the year ended December 31, 2014 we recognized $0.1 million in revenue related to the arrangement; as of December 31, 2014 we have $2.9 million in deferred revenue related to the agreement. | ||||||||||||||
MorphoSys Ag | ||||||||||||||
In June 2010, we entered into a Collaboration and License Agreement with MorpohSys AG (MorphoSys), which we subsequently amended in March 2012. The agreement provided us an upfront payment of $13.0 million in exchange for an exclusive worldwide license to our patents and know‑how to research, develop and commercialize our XmAb5574 product candidate (subsequently renamed MOR208) with the right to sublicense under certain conditions. Under the agreement, we agreed to collaborate with MorphoSys to develop and commercialize XmAb5574/MOR208. We determined that the arrangement was one with multiple deliverables and we identified the multiple elements in the agreement as the license of XmAb5574/MOR208 and the research and development services provided by us for the initial Phase 1 clinical trial. If certain developmental, regulatory and sales milestones are achieved, we are eligible to receive future milestone payments and royalties. We determined that the future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones. Our responsibility with respect to the collaboration services is limited to completion of the Phase 1 clinical trial. MorphoSys is responsible all further development of XmAb5574/MOR208. | ||||||||||||||
Under the terms of the amendment, we received additional proceeds for the additional research and development services related to extension of the Phase 1 clinical trial. During 2012, we recognized $0.4 million of revenue related to the additional services provided. | ||||||||||||||
In April and May 2013, MorphoSys initiated two Phase II clinical trials under the arrangement and we received a milestone payment of $3.0 million. We have recognized the payment as revenue in the period that the milestone event occurred. | ||||||||||||||
The total revenue recognized under this arrangement was zero, $3.0 million and $2.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, we have no deferred revenue related to this agreement. | ||||||||||||||
Alexion Pharmaceuticals, Inc. | ||||||||||||||
In January 2013, we entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds against six different target programs during a five‑year research term under the agreement, up to completion of the first multi‑dose human clinical trial for each target compound. Alexion may extend the research term for an additional three years upon written notice to us and payment of an extension fee of $2.0 million. Alexion is responsible for conducting all research and development activities under the agreement at its own expense. | ||||||||||||||
In addition, we granted to Alexion an exclusive option, on a target‑ by‑target basis, to obtain an exclusive commercial, worldwide, royalty‑ bearing license, with sublicensing rights, under our Xtend technology to develop and commercialize products that contain the target for which the option is exercised. In order to exercise this option, Alexion must pay a $4.0 million option fee with respect to each target for which the option is exercised. Alexion may exercise this option at any time during the research term but must exercise it prior to initiating a second clinical trial with a target that includes our technology. | ||||||||||||||
Under the agreement, we received an upfront payment of $3.0 million. Alexion is also required to pay an annual maintenance fee of $0.5 million during the research term of the agreement and $1.0 million during any extension of the research term. In addition, if certain development, regulatory and commercial milestones are achieved, we are eligible to receive up to $66.5 million for the first product to achieve such milestones on a target‑by‑target basis. If licensed products are successfully commercialized, we are also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sublicensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product‑by‑product and country‑by‑ country basis until the expiration of the last‑to‑expire valid claim in a licensed patent covering the applicable product in such country. | ||||||||||||||
Absent early termination, the term of the agreement will continue until the expiration of Alexion’s royalty payment obligations or until the expiration of the research term if Alexion has not exercised its option for a product license under the agreement. Either party may terminate the agreement for a material breach of the agreement by the other party if such breach remains uncured for 60 days, or 30 days in the case of a non‑payment breach. Alexion may terminate the agreement without cause on a target‑by‑target basis upon 90 days’ advance written notice to us. | ||||||||||||||
The total revenue recognized under this arrangement was $1.0 million and $0.9 million for the years ended December 31, 2014 and 2013 respectively. As of December 31, 2014 we have deferred revenue related to this agreement of $1.6 million. | ||||||||||||||
Amgen, Inc. | ||||||||||||||
In December 2010, we entered into a Collaboration and Option Agreement with Amgen, Inc. (Amgen), pursuant to which we agreed to collaborate with Amgen to research, develop and commercialize XmAb5871 and products based thereon. Under the agreement, we granted to Amgen an option to acquire an exclusive license to research, develop, manufacture and commercialize XmAb5871 and certain related products worldwide, which option is exercisable by Amgen only after Amgen’s (1) notification to us that it is electing to exercise the option and (2) payment of an option exercise fee to us during the option period under the agreement. The term of the option began at the effective date of the Agreement and expires 90 days after delivery of the data from a Phase 2 proof‑of‑concept (POC) clinical trial. During the option period and prior to Amgen exercising its option under the agreement, we retain ownership of the compound and are responsible for all clinical development of the compound through completion of the Phase 2 POC clinical trial and delivery of the clinical study data for the POC clinical trial. We received a nonrefundable upfront payment of $11.0 million upon execution of the agreement and a $2.0 million payment in January 2013 upon initiation of a Phase 1b trial. We determined that substantially all of the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. | ||||||||||||||
We determined that the arrangement is one with multiple deliverables and we identified the multiple elements at the inception of the agreement. We determined that the deliverables under the arrangement were the research and development services and the option to acquire the rights to XmAb5871. Since the option is a contingent and a substantive element, no portion of the upfront fee was allocated to it. The upfront payment was allocated to the research and development services and is being recognized ratably over the estimated service period to complete the Phase 2 POC trial and delivery of the clinical study reports to Amgen. We have estimated that the term of the service period to be 72 months from inception of the agreement through completion of the POC trial. | ||||||||||||||
In October 2014, we entered into an agreement with Amgen to terminate the Collaboration Agreement pursuant to which all worldwide rights to develop and commercialize XmAb5871 reverted back to us. Our obligations to continue development of XmAb5871 under the terms of the Collaboration Agreement terminated effective as of the date of the termination agreement. As a result of and effective as of the date of the termination agreement, all of Amgen’s rights to XmAb5871 terminated including the right to exercise an exclusive option to acquire the worldwide rights to XmAb5871. Amgen’s obligations to make any further payments to us are also terminated. In connection with the termination, we granted Amgen a right of first negotiation (ROFN) to obtain an exclusive license to develop and commercialize any XmAb5871 product. | ||||||||||||||
The ROFN requires us to notify Amgen if we decide to pursue a licensing transaction with a third party involving XmAb5871. Upon receipt of the notification, Amgen will have a limited time to review the data from XmAb5871 and enter into negotiations to obtain an exclusive license to develop and commercialize any future XmAb5871 product. The ROFN will expire upon the earlier of: (1) October 27, 2019, (2) initiation by us of a Phase 3 clinical trial with XmAb5871 or (3) the transfer or sale to a third party of substantially all of our business. | ||||||||||||||
We have determined that the termination results in a cancellation of all our obligations to Amgen under the Collaboration Agreement. We have evaluated the terms of the ROFN and determined that it has de minimis value because Amgen’s rights under the ROFN are limited to an exclusive negotiating period of a short duration and there is no bargain element in the ROFN. As a result of the termination, we have recognized $5.2 million of income which represents the balance of the deferred revenue related to the agreement at the time of the termination. | ||||||||||||||
The total revenue recognized under this arrangement was $6.9 million, $2.2 million and $1.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014 we have no deferred revenue related to this agreement. | ||||||||||||||
MedImmune LLC | ||||||||||||||
In December 2012, we entered into a Cross‑License Agreement with MedImmune, LLC (MedImmune). Under the agreement we provided MedImmune with a non‑exclusive research license to certain technology and options to acquire commercial licenses to a limited number of compounds. In exchange, MedImmune provided us with a worldwide, non‑exclusive, royalty‑free license and sub‑license to certain U.S. patent rights granted to MedImmune. We determined that the exchange is a non‑monetary transaction as provided under ACS 845‑10, Non‑Monetary Transactions. The transaction did not include any cash proceeds and only the exchange of intellectual property rights between the two companies. | ||||||||||||||
We estimated the fair value of the license and options transferred to be $0.75 million. Our estimate was based on the risk adjusted discounted cash flow that is associated with the research license and options to commercial licenses transferred to MedImmune. We recognized licensing revenue on the exchange of $0.75 million for the year ended December 31, 2012 equal to the fair value of the assets transferred. We also recorded an asset of $0.75 million to reflect the licensing rights that we acquired from MedImmune in the exchange; the capitalized rights are being amortized over the shorter of the remaining patent term or the estimated useful life of the license. | ||||||||||||||
MedImmune Ventures, Inc., an affiliate of MedImmune, was one of our 5% stockholders and has a designee on our Board of Directors as of December 31, 2012. As a result of our Initial Public Offering that became effective December 2013, MedImmune was no longer a 5% stockholder. | ||||||||||||||
Boehringer Ingelheim International GmbH | ||||||||||||||
In 2007 we entered into a Research Licensee and Collaboration Agreement with Boehringer Ingelheim International GmbH (BI). Under the agreement, we provided BI with a three‑year research license to one of our technologies and commercial options. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to two compounds. Upon exercise of an option to a commercial license, we are eligible to receive future milestone payments and royalties. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. The upfront payment and the annual license fees are being recognized ratably into income over the research license term which expired in 2011 and payments for the commercial options were recognized in the period the commercial option was exercised since the options were contingent and substantive. During 2012, BI advanced a compound that incorporates our technology into clinical development and we received a milestone payment of $1.2 million and recognized the payment as revenue in the period the milestone event occurred. No revenue related to this arrangement was recognized in 2014 or 2013. There is no deferred revenue related to this agreement at December 31, 2104. | ||||||||||||||
Janssen, Research & Development, LLC | ||||||||||||||
In 2009 we entered into a Research License and Option Agreement with Janssen, Research & Development, LLC (Janssen). Under the agreement, we provided Janssen with non‑exclusive research license and options for exclusive commercial licenses to apply our technology to their compounds. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to three compounds. Upon exercise of an option, we are eligible to receive future milestone and royalty payments. We determined that the options and future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the options or milestones. The upfront payment of $1.0 million received at inception and the annual research license renewal payments are being recognized as revenue recorded ratably over the two‑year term of the research license. During 2012, we recognized total revenue of $1.4 million consisting of $0.9 million in research license revenue and $0.5 million for the exercise of a commercial option. No revenues related to this arrangement were recognized in 2014 and 2013. There is no deferred revenue related to this agreement at December 31, 2104. | ||||||||||||||
CSL Limited | ||||||||||||||
In 2009 we entered into a Research License and Commercialization Agreement with CSL Limited (CSL-2009). Under the agreement, we provided CSL with a research license to one of our technologies and up to five commercial options. The upfront payment of $0.75 million received at inception and the annual research license renewal payments were recognized as revenue ratably over the five‑year term of the research license. During 2012, we recognized total revenue of $1.8 million consisting of $0.3 million in annual research license revenue and $1.5 million in milestone payments. We identified the deliverables under the agreement at inception as the five‑year research licenses and options to acquire commercial licenses. | ||||||||||||||
In May 2013, we entered into an amendment to a February 2009 Research License and Commercialization Agreement with CSL, which eliminated a contingent milestone payment requirement and reduced the royalty rate on net sales for a product in development. The amendment provided for a payment upon signing of $2.5 million. We determined that the amendment was a material modification to the original agreement and evaluated the remaining deliverables at the date of the amendment. We determined that the remaining deliverables were the research license which expires in February 2014 and four additional options to take commercial licenses through the term of the research period. The options were considered to be substantive and contingent and we did not allocate any of the proceeds received in the amendment to the options. The amendment proceeds were recognized into income over the remaining period of the research term. Total revenue recognized for the years ended December 31, 2014, 2013 and 2012 was $0.7 million, $2.4 million and $1.8 million respectively. As of December 31, 2014 we have no deferred revenue related to this agreement. | ||||||||||||||
In March 2013, we entered into a License Agreement with CSL Limited (CSL-2013). Under the terms of the agreement, we provided CSL with a non‑exclusive commercial license to apply our technology to one of their compounds. The agreement provided for upfront payment of $0.5 million and we are eligible to receive future milestones as CSL advances the compound into clinical development. We determined that the deliverables under this agreement were the non‑exclusive commercial license. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. We recognized zero and $0.5 million of revenue related to this agreement for the year ended December 31, 2014 and 2013, respectively. There is no deferred revenue related to this agreement at December 31, 2014. | ||||||||||||||
Merck Sharp & Dohme Corp. | ||||||||||||||
In July 2013, we entered into a License Agreement with Merck Sharp & Dohme Corp (Merck). Under the terms of the agreement, we provided Merck with a non‑exclusive commercial license to certain patent rights to our Fc domains to apply to one of their compounds. We also provided Merck with contingent options to take additional non‑exclusive commercial licenses. The contingent options provide Merck an opportunity to take non‑exclusive commercial licenses at an amount less than the amount paid for the original license. The agreement provided for an upfront payment of $1.0 million and annual maintenance fees totaling $0.5 million. We are also eligible to receive future milestones and royalties as Merck advances the compound into clinical development. | ||||||||||||||
We determined that the deliverables under this agreement were the non‑exclusive commercial license and the options. The options are considered substantive and contingent and no amount of the upfront payment was allocated to these options. We also determined that the future milestones and related payments were substantive and contingent and did not allocate any of the upfront payment to the milestones. | ||||||||||||||
In the first quarter of 2014, Merck initiated a Phase 1 clinical trial which triggered a $0.5 million milestone payment to us. For the years ended December 31, 2014 and 2013 total revenue recognized was $0.6 million and $1.0 million respectively. As of December 31, 2014, we had deferred revenue of $0.1 million related to this agreement. | ||||||||||||||
As of December 31, 2014, the Company may be eligible to receive the following maximum payments from its collaborative partners and licensees based upon contractual terms in the agreements assuming all options are exercised and all milestones are achieved: | ||||||||||||||
Potential Milestones (in millions) (1) | ||||||||||||||
Total | ||||||||||||||
Partner | Development-based | Regulatory-based | Sales-based | Milestones | ||||||||||
MorphoSys | $ | 62.0 | $ | 187.0 | $ | 50.0 | $ | 299.0 | ||||||
Alexion | 51.0 | 168.0 | 180.0 | 399.0 | ||||||||||
BI | 9.0 | 6.0 | 12.0 | 27.0 | ||||||||||
CSL 2009 | 6.0 | 4.0 | 5.0 | 15.0 | ||||||||||
CSL 2013 | 8.0 | 4.0 | 24.5 | 36.5 | ||||||||||
Merck | 3.5 | 6.0 | — | 9.5 | ||||||||||
Novo Nordisk | 36.3 | 51.0 | 80.0 | 167.3 | ||||||||||
Janssen | 6.0 | — | 4.0 | 10.0 | ||||||||||
Total | $ | 181.8 | $ | 426.0 | $ | 355.5 | $ | 963.3 | ||||||
-1 | The payments are solely dependent upon activities of the collaborative partner or licensee. | |||||||||||||
The $9.5 million, $10.2 million and $9.5 million of revenue recorded for the years ended December 31, 2014, 2013 and 2012, respectively was earned principally from the following licensees (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Amgen | $ | 6.9 | $ | 2.2 | $ | 1.8 | ||||||||
MorphoSys | — | 3.0 | 2.0 | |||||||||||
Janssen | — | — | 1.4 | |||||||||||
Merck | 0.6 | 1.0 | — | |||||||||||
Alexion | 1.0 | 0.9 | — | |||||||||||
CSL | 0.7 | 2.9 | 1.8 | |||||||||||
BI | — | — | 1.2 | |||||||||||
Other | 0.3 | 0.2 | 1.3 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
As of December 31, 2014 and 2013 our accounts receivable included $3.0 million and $0.1 million from Novo Nordisk A/S and MorphoSys AG respectively. | ||||||||||||||
A substantial portion of our revenue is earned from collaboration partners outside the United States. Non‑U.S. revenue is denominated in U.S. dollars. A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2014, 2013 and 2012 is as follows (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
U.S. Revenue | $ | 8.6 | $ | 4.2 | $ | 4.4 | ||||||||
Non-U.S. Revenue | 0.9 | 6.0 | 5.1 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
Deferred Revenue | ||||||||||||||
Deferred revenue arises from payments received in advance of the culmination of the earnings process. We have classified deferred revenue expected to be recognized within the next 12 months as a current liability. We recognize deferred revenue as revenue in future periods when the applicable revenue recognition criteria have been met. The total amounts reported as deferred revenue were $4.6 million and $9.7 million for the years ended December 31, 2014 and 2013, respectively. | ||||||||||||||
Research and Development Expenses | ||||||||||||||
Research and development expenses include costs we incur for our own and for our collaborators research and development activities. Research and development costs are expensed as incurred. These costs consist primarily of salaries and benefits, including associated stock‑based compensation, laboratory supplies, facility costs, and applicable overhead expenses of personnel directly involved in the research and development of new technology and products, as well as fees paid to other entities that conduct certain research development activities on our behalf. We estimate preclinical study and clinical trial expenses based on the services performed pursuant to the contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on our behalf based on the actual time and expenses incurred by them. Further, we accrue expenses related to clinical trials based on the level of patient enrollment and activity according to the related agreement. We monitor patient enrollment levels and related activity to the extent reasonably possible and adjust estimates accordingly. During 2014, 2013 and 2012 we expensed $18.5 million, $17.0 million and $12.7 million, respectively, for research and development. | ||||||||||||||
We capitalize acquired research and development technology licenses and third‑party contract rights and amortize the costs over the shorter of the license term or the expected useful life. We review the license arrangements and the amortization period on a regular basis and adjust the carrying value or the amortization period of the licensed rights if there is evidence of a change in the carrying value or useful life of the asset. See “Patents, licenses and other intangible assets.” | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase. | ||||||||||||||
The primary objectives for our investment portfolio are liquidity and safety of principal. Investments are made to achieve the highest rate of return for us, while maintaining consistency with these two objectives. | ||||||||||||||
Concentrations of Risk | ||||||||||||||
Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits at December 31, 2014 and 2013 approximated $54.0 million and $77.5 million, respectively. | ||||||||||||||
We have payables with one service provider that represents 47% of our total payables and five service providers that represented 57% of our total payables for the years ended December 31, 2014 and 2013, respectively. We rely on two critical suppliers for the manufacture of our drug product for use in our clinical trials. While we believe that there are alternative vendors available, a change in manufacturing vendors could cause a delay in the availability of drug product and result in a delay of conducting and completing our clinical trials. No other vendor accounted for more than 10.0% of payables at December 31, 2014 and 2013. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Our financial instruments primarily consist of cash, money market funds, trade accounts receivable, accounts payable, accrued expenses and convertible notes payable. The fair value of cash, money market funds, trade accounts receivable, accounts payable and accrued expenses closely approximate their carrying value due to their short maturities. The carrying amounts of convertible notes payable approximate their fair value, as the interest rates, in consideration of the conversion feature, approximate the interest rates presently available to us. | ||||||||||||||
We determine the fair value of the principal amount of financial and nonfinancial assets and liabilities using the fair value hierarchy, which describes three levels of inputs that may be used to measure fair value, as follows: | ||||||||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | ||||||||||||||
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
There are no fair value assets or liabilities. | ||||||||||||||
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, ranging from three to seven years, or the lease term, whichever is shorter. Expenditures for repairs and maintenance are charged to expense as incurred while renewals and improvements are capitalized. Useful lives by asset category are as follows: | ||||||||||||||
Computers, software and equipment | 3 - 5 years | |||||||||||||
Furniture and fixtures | 5 - 7 years | |||||||||||||
Leasehold improvements | 5 - 7 years or remaining | |||||||||||||
lease term, whichever is less | ||||||||||||||
Patents, Licenses, and Other Intangible Assets | ||||||||||||||
The cost of acquiring licenses is capitalized and amortized on the straight‑ line basis over the shorter of the term of the license or its estimated economic life, ranging from five to 25 years. Third‑party costs incurred for acquiring patents are capitalized. Capitalized costs are accumulated until the earlier of the period that a patent is issued or we abandon the patent claims. Cumulative capitalized patent costs are amortized on a straight‑line basis from the date of issuance over the shorter of the patent term or the estimated useful economic life of the patent, ranging from 13 to 20 years. Our senior management, with advice from outside patent counsel, assesses three primary criteria to determine if a patent will be capitalized initially: i) technical feasibility, ii) magnitude and scope of new technical function covered by the patent compared to the company’s existing technology and patent portfolio, particularly assessing the value added to our product candidates or licensing business, and iii) legal issues, primarily assessment of patentability and prosecution cost. We review our intellectual property on a regular basis to determine if there are changes in the estimated useful life of issued patents and if any capitalized costs for unissued patents should be abandoned. Capitalized patent costs related to abandoned patent filings are charged off in the year of the decision to abandon. During 2014, 2013 and 2012, we abandoned previously capitalized patent and licensing related charges of $509,000, $205,000 and $388,000, respectively. | ||||||||||||||
The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands): | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Patents, definite life | $ | 5,720 | $ | 4,834 | ||||||||||
Patents, pending issuance | 3,654 | 3,515 | ||||||||||||
Licenses and other amortizable intangible assets | 1,797 | 1,917 | ||||||||||||
Nonamortizable intangible assets (trademarks) | 400 | 369 | ||||||||||||
Total gross carrying amount | 11,571 | 10,635 | ||||||||||||
Accumulated amortization—patents | -1,776 | -1,395 | ||||||||||||
Accumulated amortization—licenses and other | -679 | -426 | ||||||||||||
Total intangible assets, net | $ | 9,116 | $ | 8,814 | ||||||||||
Amortization expense for patents, licenses, and other intangible assets was $694,000, $598,000 and $373,000 for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||
Future amortization expense for patents, licenses, and other intangible assets recorded as of December 31, 2014, and for which amortization has commenced, is as follows: | ||||||||||||||
Years ending | ||||||||||||||
December 31, | ||||||||||||||
(in thousands) | ||||||||||||||
2015 | $ | 535 | ||||||||||||
2016 | 538 | |||||||||||||
2017 | 538 | |||||||||||||
2018 | 527 | |||||||||||||
2019 | 515 | |||||||||||||
Thereafter | 2,408 | |||||||||||||
Total | $ | 5,061 | ||||||||||||
The above amortization expense forecast is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets, and other events. As of December 31, 2014, the Company has $3.7 million of intangible assets which are in‑process and have not been placed in service and, accordingly amortization on these assets has not commenced. | ||||||||||||||
Long‑Lived Assets | ||||||||||||||
Management reviews long‑lived assets which include fixed assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value for our long‑lived assets is determined using the expected cash flows discounted at a rate commensurate with the risks involved. | ||||||||||||||
As of December 31, 2014, we determined that our continuing losses from operations triggered a review of the carrying value of our long‑lived assets including our capitalized patent and licensing costs. We conducted an impairment analysis of the assets in accordance with ASC 360 by estimating the future undiscounted cash flows as of December 31, 2014, by patent family, which included granted and pending patents and related licenses. For purposes of the analysis, we grouped our patents into the four primary technology groups, IIb, ADCC, Xtend and, bi‑specific, and compared the carrying value of the group to the undiscounted cash flows expected to be received from the patents in each group. We determined that the fair value of the potential future cash flows using this method was in excess of the carrying value of the intangible assets as of December 31, 2014. The patent groups assessed for impairment were the IIb, ADCC, Xtend and bi‑specific patent families and represented the lowest level of cash flows for evaluation. These four patent families cover all of our current product candidates and our current license agreements. We modeled the cash flows from our internal product development program XmAb7195 and licensed programs that use each particular category of patent asset. We used multiple published sources of pharmaceutical product development stage failure rates to estimate failure rates at each stage of clinical development in order to probability weight the cash flows for each internal and licensed program. We did not recognize a loss from impairment for the years ended December 31, 2014, 2013 or, 2012. | ||||||||||||||
Income Taxes | ||||||||||||||
We account for income taxes in accordance with accounting guidance which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. | ||||||||||||||
We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is a 50% or less likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. | ||||||||||||||
Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense. We did not have any uncertain tax positions at December 31, 2014 or 2013. | ||||||||||||||
We are potentially subject to tax authority audits for the years 2011 and onwards for U.S. federal purposes and 2010 and onwards for state purposes. | ||||||||||||||
Stock‑Based Compensation | ||||||||||||||
We recognize compensation expense using a fair‑value‑based method for costs related to all share‑based payments, including stock options and shares issued under our Employee Stock Purchase Plan (“ESPP”). Stock‑based compensation cost related to employees and directors is measured at the grant date, based on the fair‑value—based measurement of the award using the Black‑Scholes method, and is recognized as expense over the requisite service period on a straight‑line basis. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent period if actual forfeitures differ from those estimates. We use historical data and industry published statistics to estimate pre‑vesting option forfeitures and record stock‑based compensation expense only for those awards that are expected to vest. We recorded stock‑based compensation (benefit) and expense for stock‑based awards to employees, directors and consultants of approximately $1.8 million, $198,000 and $29,000 for the years ended December 31, 2014, 2013 and 2012, respectively. Included in the 2014 total compensation expense is $172,000 under our ESPP. | ||||||||||||||
Options granted to individual service providers that are not employees or directors are accounted for at estimated fair value using the Black‑Scholes option‑pricing method and are subject to periodic re‑measurement over the period during which the services are rendered. | ||||||||||||||
Net Loss Per Share | ||||||||||||||
Basic net loss per common share is computed by dividing the net loss by the weighted‑average number of common shares outstanding during the period. Potentially dilutive securities consisting of stock options at December 31, 2014, 2013 and 2012, and convertible preferred stock and convertible promissory notes at December 31, 2012 and 2011 were not included in the diluted net loss per common shares calculation because the inclusion of such shares would have had an antidilutive effect. | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands) | ||||||||||||||
Convertible preferred stock | — | — | 12,188 | |||||||||||
Convertible promissory notes | — | — | 2,800 | |||||||||||
Options to purchase common stock | 2,827 | 1,794 | 1,305 | |||||||||||
Employee stock purchase plan shares | 25 | — | — | |||||||||||
Total | 2,852 | 1,794 | 16,293 | |||||||||||
The loss for the period ended December 31, 2013 was adjusted, for purposes of the diluted net income per share calculation, to reflect the deemed contribution of $144.8 million. This reflects a deemed contribution of $148.1 million from the exchange of convertible preferred stock, a deemed dividend of $1.0 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which shares were sold in June 2013, and an additional deemed dividend of $2.3 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which additional shares were sold in the subsequent Series A‑1 closing in September 2013. | ||||||||||||||
For 2013, the diluted loss per share calculation assumes the conversion of outstanding shares of convertible preferred stock into common stock using the as‑if converted method. | ||||||||||||||
Year Ended December 31 | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands, except | ||||||||||||||
per share data) | ||||||||||||||
Basic | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Deemed contribution | — | 144,765 | — | |||||||||||
Net income (loss) attributable to common stockholders for basic income per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted-average common shares outstanding | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Basic net income (loss) per common share | $ | -0.52 | $ | 34.18 | $ | -118.86 | ||||||||
Diluted: | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) attributable to common stockholders for basic net loss per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Deemed contribution | — | -144,765 | — | |||||||||||
Net loss attributable to common stockholders for diluted net loss per share | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Dilutive effect of conversion of convertible preferred stock | — | 13,173,208 | — | |||||||||||
Weighted-average number of common shares outstanding used in computing net loss per common share | 31,390,631 | 15,645,789 | 72,302 | |||||||||||
Diluted net loss per common share | $ | -0.52 | $ | -3.85 | $ | -118.86 | ||||||||
Segment Reporting | ||||||||||||||
The Company determines its segment reporting based upon the way the business is organized for making operating decisions and assessing performance. The Company has only one operating segment related to the development of pharmaceutical products. | ||||||||||||||
Convertible_Notes_Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2014 | |
Convertible Notes Payable | |
Convertible Notes Payable | 2. Convertible Notes Payable |
In 2009, we issued $7.7 million of convertible promissory notes (the 2009 Notes) to existing preferred stockholders. Originally, the 2009 Notes had an interest rate of 10.0% per annum and original maturity date of September 30, 2009 which was subsequently extended to July 31, 2011. In June 2011, the 2009 Notes were amended to increase the interest rate on the Note from 10.0% to 12.5% and to extend the maturity date to December 31, 2012. | |
In December 2010, we issued an additional $7.5 million of convertible promissory notes (the 2010 Notes) to existing preferred stockholders. The 2010 Notes bear similar terms as the 2009 notes and, originally had an interest rate of 10.0% per annum and an original maturity date of December 31, 2011. In December 2011, the 2010 Notes were amended to increase the interest rate from 10.0% to 12.5% and to extend the maturity date of the Notes to December 31, 2012. | |
In December 2012 the maturity dates for the 2009 Notes and the 2010 Notes were extended to April 15, 2013 and in April 2013 the maturity dates were extended again to June 15, 2013, with each such extension considered to be a modification of debt under ASC 470‑50‑40. | |
In June 2013, and prior to the maturity dates of the 2009 Notes and the 2010 Notes, our Board of Directors and the requisite stockholders and holders of the 2009 Notes and 2010 Notes agreed to exchange the outstanding principal into shares of our Series A‑1 convertible preferred stock in connection with a concurrent financing . The exchange of the 2009 Notes and 2010 Notes was not pursuant to the terms of the applicable notes so we accounted for the exchange as an extinguishment of the original debt instrument. | |
Capital_Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2013 | |
Capital Structure | |
Capital Structure | 3. Capital Structure |
Authorized Capital Stock | |
We are authorized to issue 200,000,000 shares of common stock and 10,000,000 shares of preferred stock as of December 31, 2014. We had 200,000,000 shares of common stock and 10,000,000 shares of preferred stock authorized as of December 31, 2013. | |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | 4. Property and Equipment | |||||||
Property and equipment consist of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Computers, software and equipment | $ | 4,270 | $ | 3,514 | ||||
Furniture and fixtures | 97 | 89 | ||||||
Leasehold and tenant improvements | 3,086 | 3,081 | ||||||
7,453 | 6,684 | |||||||
Less accumulated depreciation and amortization | -6,554 | -6,377 | ||||||
$ | 899 | $ | 307 | |||||
During 2012, we entered into a capital lease for certain computer equipment for $22,000. Total assets under capital lease were $22,000 as of December 31, 2014 and 2013, respectively; accumulated depreciation for these assets was $20,000 and $12,900 at December 31, 2014 and 2013, respectively. | ||||||||
Depreciation expense in 2014, 2013 and 2012 was $188,000, $113,000 and $154,000, respectively. | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 5. Income Taxes | ||||||||||
We use the assets and liability method to account for income taxes in accordance with ASC 740‑10, Income taxes. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. At each balance sheet date, we evaluate the available evidence about future taxable income and other possible source of realization of deferred income tax assets, and record a valuation allowance that reduces the deferred income tax assets to an amount that represents management’s best estimate of the amount of such deferred income tax assets that more likely than not will be realized. We did not record a liability or an asset related to an uncertain tax position for the years ended December 31, 2014 and 2013. | |||||||||||
Our effective tax rate differs from the statutory federal income tax rate, primarily as a result of the operating loss and tax credits generated. For the years ended December 31, 2014, 2013 and 2012 there was no current provision for federal or state income taxes due to taxable losses incurred in each of the years. | |||||||||||
A reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows (in thousands): | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal statutory income tax rate | $ | -5,583 | $ | -20,488 | $ | -2,922 | |||||
Loss on settlement of notes | — | 18,884 | — | ||||||||
Non-deductible research and development credit | 435 | — | 336 | ||||||||
Stock based compensation | 478 | — | — | ||||||||
Other | 2 | 4 | 12 | ||||||||
Net change in valuation allowance | 4,668 | 1,600 | 2,574 | ||||||||
Net effective tax rate | $ | — | $ | — | $ | — | |||||
The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities at December 31, 2014 and 2013 is presented below (in thousands): | |||||||||||
2014 | 2013 | ||||||||||
Deferred income tax assets | |||||||||||
Net operating loss carryforwards | $ | 47,401 | $ | 58,286 | |||||||
Research credits | 12,789 | 24,276 | |||||||||
Depreciation | 790 | 849 | |||||||||
Stock-based compensation | — | 52 | |||||||||
Accrued compensation | 373 | 137 | |||||||||
Deferred revenue | 1,836 | 3,899 | |||||||||
Gross deferred income tax assets | 63,189 | 87,499 | |||||||||
Valuation allowance | -59,602 | -84,045 | |||||||||
Net deferred income tax assets | 3,587 | 3,454 | |||||||||
Deferred income tax liabilities | |||||||||||
Patent costs | -3,199 | -2,929 | |||||||||
Licensing costs | -317 | -406 | |||||||||
Capitalized legal costs | -71 | -119 | |||||||||
Gross deferred income tax liabilities | -3,587 | -3,454 | |||||||||
Net deferred income tax asset/(liability) | $ | — | $ | — | |||||||
Due to the uncertainty surrounding the realization of the benefits of our deferred tax assets in future tax periods, we have placed a valuation allowance against our deferred tax assets. The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s net deferred income tax asset is not more likely than not to be realized due to the lack of sufficient sources of future taxable income and cumulative book losses that have resulted over the years. During the years ended December 31, 2014, the valuation allowance decreased by $21.4 million; during 2013 the valuation allowance increased by $3.0 million. Upon analysis, there were changes in ownership under Section 382 of the Internal Revenue Code and related state provisions. Section 382 limits the amount of net operating losses and tax credit forwards that may be available after a change in ownership. The Company has adjusted its net operating loss and tax credit carryforwards to reflect the impact of the section 382 limitations. The Company’s tax returns remain open to potential inspection for the years 2011 and onwards for federal purposes and 2010 and onwards for state purposes. | |||||||||||
As of December 31, 2014, we had cumulative net operating loss carryforwards for federal and state income tax purposes of $169.2 million and $134.2 million respectively, and available tax credit carryforwards of approximately $15.2 million for federal income tax purposes and $11.5 million for state income tax purposes, which can be carried forward to offset future taxable income, if any. | |||||||||||
Our federal net operating loss carryforwards expire starting in 2019, state net operating losses expire starting in 2015 and federal tax credit carryforwards expire starting in 2033. Utilization of the net operating losses and tax credits are subject to a substantial annual limitation due to “ownership changes” which occurred. As a result of these changes, provisions in the Internal Revenue Code of 1986 under Section 382 and similar state provisions may result in the expiration of certain of our net operating losses and tax credits before we could use them. | |||||||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Stock-Based Compensation | 6. Stock‑Based Compensation | |||||||||||||
Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan. In October 2013, our Board of Directors approved the 2013 Equity Incentive plan (the 2013 Plan) and in November 2013 our stockholders approved the 2013 Plan. The 2013 Plan became effective as of December 3, 2013, the date of the Company’s IPO. As of December 2, 2013, we suspended the 2010 Plan and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the Prior Plans that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve. | ||||||||||||||
As of December 31, 2014, the total number of shares of common stock available for issuance under the 2013 Plan was 5,409,980, which includes 2,662,065 of common stock that were available for issuance under the Prior Plans as of the effective date of the 2013 Plan. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. On January 1, 2014, the total number of shares of common stock available for issuance under the 2013 Plan was automatically increased by 1,254,179 shares, which number is included in the number of shares available for issuance above. As of December 31, 2014 a total of 1,063,500 options had been issued under the 2013 Plan. | ||||||||||||||
In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. Under the ESPP our employees may elect to have between 1-15% of their compensation withheld to purchase Company stock at a discount. The ESPP has an initial two-year term that includes four six-month purchase periods and employee withholding amounts may be used to purchase Company stock during each six-month purchase period. The total number of shares that can be purchased with the withholding amounts are based on the lower of 85% of the Company’s stock price at the initial offering date or, 85% of the Company’s stock price at each purchase date. We have reserved a total of 581,286 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. On January 1, 2014, the total number of shares of common stock available for issuance under the ESPP was automatically increased by 313,545 shares, which number is included in the number of shares reserved for issuance above. As of December 31, 2014, we have issued a total of 63,864 shares of common stock under the ESPP. | ||||||||||||||
Information with respect to stock options outstanding is as follows: | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Exercisable options | 1,393,729 | 1,203,885 | 1,094,573 | |||||||||||
Weighted average exercise price per share of exercisable options | $ | 1.01 | $ | 0.59 | $ | 0.59 | ||||||||
Weighted average grant date fair value per share of options granted during the year | $ | 7.39 | $ | 3.78 | $ | 0.34 | ||||||||
Options available for future grants | 2,583,186 | 2,403,368 | 753,692 | |||||||||||
Weighted average remaining contractual life | 6.43 | 5.72 | 7.79 | |||||||||||
The following table summarizes stock option activity for the years ended December 31, 2014 and 2013: | ||||||||||||||
Weighted- | ||||||||||||||
Weighted- | Average | |||||||||||||
Average | Remaining | |||||||||||||
Exercise | Contractual | Aggregate | ||||||||||||
Number of | Price | Term | Intrinsic Value | |||||||||||
Shares | (Per Share)(1) | (in years) | (in thousands)(2) | |||||||||||
Balances at December 31, 2012 | 1,304,848 | $ | 0.59 | 7.79 | ||||||||||
Options granted | 517,062 | 4.29 | ||||||||||||
Options canceled | -5,305 | 0.59 | ||||||||||||
Options exercised(3) | -22,391 | 0.59 | ||||||||||||
Balances at December 31, 2013 | 1,794,214 | 1.66 | 5.72 | $ | 13,429 | |||||||||
Options granted | 1,049,521 | 10.99 | ||||||||||||
Options forfeited | -1,000 | 10.31 | ||||||||||||
Options exercised(3) | -15,941 | 0.59 | ||||||||||||
Balances at December 31, 2014 | 2,826,794 | $ | 5.12 | 6.43 | $ | 30,863 | ||||||||
As of December 31, 2014: | ||||||||||||||
Options vested and expected to vest | 2,531,221 | $ | 4.72 | 6.12 | $ | 28,642 | ||||||||
Exercisable | 1,393,729 | $ | 1.01 | 3.68 | $ | 20,949 | ||||||||
-1 | The weighted average exercise price per share is determined using exercise price per share for stock options. | |||||||||||||
-2 | The aggregate intrinsic value is calculated as the difference between the exercise price of the option and the fair value of our common stock for in‑ the‑money options at December 31, 2014. | |||||||||||||
-3 | The total intrinsic value of stock options exercised was $155,000 and $191,000 for the years ended December 31, 2014 and 2013 respectively. There were no option exercises in 2012. | |||||||||||||
The stock options outstanding and exercisable by exercise price at December 31, 2014 are as follows: | ||||||||||||||
Stock Options Outstanding | Stock Options Exercisable | |||||||||||||
Weighted- | ||||||||||||||
Average | ||||||||||||||
Remaining | Weighted- | Weighted- | ||||||||||||
Range of | Contractual | Average | Average | |||||||||||
Exercise | Number of | Term | Exercise Price | Number of | Exercise Price | |||||||||
Prices | Shares | (in years) | Per Share | Shares | Per Share | |||||||||
$0.59 - $4.25 | 1,763,294 | 4.71 | $ | 1.63 | 1,388,779 | $ | 0.99 | |||||||
$4.25 - $8.56 | 55,000 | 9.28 | $ | 7.73 | 4,950 | $ | 5.50 | |||||||
$9.26 – 16.52 | 1,008,500 | 9.28 | $ | 11.1 | — | $ | — | |||||||
2,826,794 | 6.43 | $ | 5.12 | 1,393,729 | $ | 1.01 | ||||||||
We estimated the fair value of employee and non‑employee awards using the Black‑Scholes valuation model. The fair value of employee stock options is being amortized on a straight‑line basis over the requisite service period of the awards. Management’s estimates the probability of non‑employee awards being vested based upon an evaluation of the non‑employee achieving their specific performance goals. | ||||||||||||||
Options granted after our Initial Public Offering, are issued at the fair market value of our stock at the date the grant is approved by our board of directors. For 2013 options granted prior to our Initial Public Offering, we used and estimated fair value of $4.25 per share as determined by the board of directors based on input from management. For the options granted in the year ended December 31, 2012, we used an estimated fair value per share of $0.59, originally determined by our Board of Directors as of December 31, 2009. For options granted prior to 2012, we used the capital asset valuation model to determine fair value with the following key assumptions: junior nature of the common stock to outstanding convertible preferred stock and convertible preferred promissory notes, conversion dilution, minority status and the illiquid nature of our common stock. | ||||||||||||||
The fair value of employee stock options was estimated using the following weighted average assumptions for the years ended December 31, 2014, 2013 and 2012 | ||||||||||||||
Options | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Common stock fair value per share | $ | 8.56 - 16.52 | $ | 5.50 | $ | 0.59 | ||||||||
Expected volatility | 77.4% | 86.7% | 63.7% | |||||||||||
Risk-free interest rate | 1.67% - 1.96% | 0.9% – 2.1% | 2.68% | |||||||||||
Expected dividend yield | — | — | — | |||||||||||
Expected term (in years) | 6.0 | 6.0 | 6.0 | |||||||||||
ESPP | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Expected term (years) | 0.5 - 2.0 | — | — | |||||||||||
Expected volatility | 70.6% - 71.8% | — | — | |||||||||||
Risk-free interest rate | .06% - .46% | — | — | |||||||||||
Expected dividend yield | — | — | — | |||||||||||
Total employee, director and non‑employee stock‑based compensation expense recognized was as follows: | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||
General and administrative | $ | 848 | $ | 40 | $ | 19 | ||||||||
Research and development | 1,013 | 158 | 10 | |||||||||||
$ | 1,861 | $ | 198 | $ | 29 | |||||||||
The expected term of stock options represents the average period the stock options are expected to remain outstanding. The expected stock price volatility for our stock options for the years ended December 31, 2014, 2013 and 2012 was determined by examining the historical volatilities for industry peers and adjusting for differences in our life cycle and financing leverage. Industry peers consist of several public companies in the biopharmaceutical industry. | ||||||||||||||
We determined the average expected life of stock options based on the simplified method because our common stock has not been publicly traded for an extended period and we do not have a track record of establishing the volatility. For all option grants prior to our Initial Public Offering we were a privately held company. | ||||||||||||||
The risk‑free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of our stock options. | ||||||||||||||
The expected dividend assumption is based on our history and expectation of dividend payouts. | ||||||||||||||
At December 31, 2014, 2013 and 2012, the unamortized compensation expense related to unvested stock options was $7.6 million, $895,000 and $26,000, respectively. The remaining unamortized compensation expense will be recognized over the next 3.57 years At December 31, 2014, the unamortized compensation expense of $204,000 under our ESPP will be recognized in the next year. | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies | ||||||||
Commitments and Contingencies | 7. Commitments and Contingencies | |||||||
Although we may be involved from time to time in litigation incidental to our business, we are not currently aware of any ongoing, pending or threatened litigation which would have a material adverse effect on our financial position, results of operations and cash flows. However, unforeseen litigation may be initiated by us or by third parties. Such litigation could adversely affect our business, financial position and results of operations and divert our attention and resources from other matters. | ||||||||
In 2009, we purchased certain computer equipment under a three‑year capital lease. Total payments due under the capital lease are listed below. | ||||||||
In 2011, we entered into an agreement with its landlord to amend the terms of its existing facility lease in Monrovia, California. The new lease extends the term of the lease from January 2012 to April 2015 and provides for a new rent payment schedule. In January 2015, we entered into a new lease agreement for the Monrovia property the new lease replaces the previous lease and extends our lease term to June 2020 with an option to renew for an additional five year. The new lease is a non‑cancelable operating lease. We are responsible for other lease related costs such as personal property taxes, insurance, maintenance and utilities. | ||||||||
In May 2014 we entered into a lease for office space in San Diego, California. The lease term is for 26 months with an option to renew for an additional year. The total payments under the lease are approximately $200,000. | ||||||||
Future minimum payments under the non‑cancelable operating and capital leases consist of the following at December 31, 2014 (in thousands): | ||||||||
Capital | ||||||||
Equipment | Operating | |||||||
Years ending December 31, | Lease | Leases | ||||||
2015 | $ | 2 | $ | 398 | ||||
2016 | — | 598 | ||||||
2017 | — | 547 | ||||||
2018 | — | 564 | ||||||
2019 | — | 581 | ||||||
Thereafter | — | 299 | ||||||
Total | $ | 2 | $ | 2,987 | ||||
Net rent expense for the years ended December 31, 2014 and 2013 was $597,000 and $547,000 respectively. | ||||||||
Guarantees | ||||||||
In the normal course of business, we indemnify certain employees and other parties, such as collaboration partners and other parties that perform certain work on behalf of, or for the Company or take licenses to our technologies. hawse have agreed to hold these parties harmless against losses arising from our breach of representations or covenants, intellectual property infringement or other claims made against these parties in performance of their work with us. | ||||||||
These agreements typically limit the time within which the party may seek indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential amount of liability under these indemnification agreements since we have not had any prior indemnification claims on which to base the calculation. Further, each potential claim would be based on the unique facts and circumstances of the claim and the particular provisions of each agreement. We are not aware of any potential claims and did not record a liability as of December 31, 2014 and 2013. | ||||||||
401k_Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2014 | |
401(k) Plan | |
401(k) Plan | 8. 401(k) Plan |
We have a 401(k) plan covering all full‑time employees. Employees may make pre‑tax contributions up to the maximum allowable by the Internal Revenue Code. Participants are immediately vested in their employee contributions and employer discretionary contributions, if any. No employer contributions were made for the years ended December 31, 2014, 2013 or 2012. | |
Related_Parties
Related Parties | 12 Months Ended |
Dec. 31, 2014 | |
Related Parties | |
Related Parties | 9. Related Parties |
On September 4, 2013, our Board of Directors authorized the forgiveness of the outstanding principal and interest of approximately $166,000, under the promissory note from our Chief Executive Officer, effective and contingent upon the filing of a registration statement on Form S‑1 for our initial public offering with the U.S. Securities and Exchange Commission. | |
Convertible_Promissory_Notes_a
Convertible Promissory Notes and Conversion of Convertible Preferred Stock | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Conversion of Convertible Promissory Notes and Preferred Stock | ||||
Conversion of Convertible Promissory Notes and Preferred Stock | 10. Conversion of Convertible Promissory Notes and Preferred Stock | |||
In June 2013, our Board of Directors and the requisite holders of the 2009 Notes and 2010 Notes and requisite preferred stockholders agreed to a series of transactions as follows: | ||||
· | an exchange of the outstanding principal due on the 2009 Notes and 2010 Notes for shares of Series A‑1 convertible preferred stock and cancellation of the accrued and unpaid interest thereon, pursuant to a Note Conversion Agreement; | |||
· | an exchange of the current outstanding shares of Preferred Series A—E for Series A‑1 convertible preferred stock pursuant to the operation of provisions in our amended and restated certificate of incorporation; | |||
· | the sale of an additional $10.0 million in Series A‑1 convertible preferred stock to existing stockholders; and | |||
· | the conversion of certain shares of Series A‑1 convertible preferred stock into shares of Series A‑2 convertible preferred stock at a conversion rate of 1 for 3, pursuant to a mandatory conversion provision (e.g. a “pay to play” provision) in our amended and restated certificate of incorporation. | |||
The primary business purpose for this series of transactions was to raise an additional $10 million of capital from the sale of shares of our Series A‑1 convertible preferred stock (the financing). The exchange of Notes, cancellation of interest, restatement of our certificate of incorporation to effect the exchange of Preferred Series A—E for Series A‑1 convertible preferred stock and the conversion of certain shares of Series A‑1 convertible preferred stock for shares of Series A‑2 convertible preferred stock were each negotiated aspects of, and conditions to, the financing. When considering the terms for the financing, our Board of Directors took these conditions into account and, ultimately, determined that the financing was in the best interests of the Company and our stockholders. Subsequent to approval of the financing by our Board of Directors, the requisite stockholders and holders of the Notes also approved this series of transactions. | ||||
Under the terms of the Note Conversion Agreement, the total outstanding principal due on the Notes as of June 13, 2013 was exchanged for 45,902,321 shares of Series A‑1 convertible preferred stock, 5,303,597 of which were subsequently converted into 1,766,097 shares of Series A‑2 convertible preferred stock. We determined that the per share fair value of the shares of Series A‑1 convertible preferred stock issued was $1.54 and the total fair value of the issued shares under the Note Conversion Agreement was $70.7 million and we recognized a loss on the exchange of $48.6 million for the difference in the fair value of the shares of Series A‑1 convertible preferred stock and the carrying value of the Notes as of June 13, 2013. | ||||
The $48.6 million loss is reported on our Statement of Operation as a Loss on Settlement of Notes as an Other Expense for the year ended December 31, 2013. Associated transaction costs of $41,000 related to the exchange were expensed. | ||||
After the exchange of the Notes, the outstanding shares of Preferred Series A—E were exchanged for 1,977,137 shares of Series A‑1 convertible preferred stock, 257,409 of which were subsequently converted into 85,717 shares of Series A‑2 convertible preferred stock. We determined the fair value of the shares of Series A‑1 convertible preferred stock issued to be $3.0 million and we recorded a deemed contribution to equity of $140.6 million equal to the difference in the fair value of the shares issued and the carrying value of the existing shares of Preferred Series A—E. We record issuance costs related to our preferred stock sales as a reduction to paid‑in capital at the time the preferred securities are issued and reflect the carrying value of the preferred stock at the aggregate issuance price. We record these issuances as a non‑cash equity distribution at the date of redemption. The deemed contribution has been adjusted to reflect $3.0 million of original issuance costs of the Preferred Series A—E. | ||||
We determined that the value of the Series A‑2 convertible preferred stock to be $0.58 per share. A total of 1,851,814 shares of Series A‑2 convertible preferred stock with a fair value of $1.1 million were issued in exchange for 5,561,006 shares of Series A‑1 convertible preferred stock with the fair value of $8.6 million. We recognized a deemed contribution of $7.5 million for the difference in the fair value of the shares of Series A‑2 convertible preferred stock issued in exchange for the shares of Series A‑1 convertible preferred stock. | ||||
On June 26, 2013 we sold 5,586,510 shares of additional Series A‑1 convertible preferred stock to existing stockholders at a purchase price of $1.36 per share for aggregate proceeds of $7.6 million. We determined that the fair value of the shares sold in June 2013 to be $8.6 million and we recorded a deemed dividend of $1.0 million for the difference in the sales price of the Series A‑1 convertible preferred stock and the fair value of the shares. The $40,000 of transaction costs related to the sale was recorded against Additional Paid in Capital. | ||||
We determined that the fair value of the Series A‑1 and Series A‑2 convertible preferred stock as of June 26, 2013 was $1.54 and $0.58, respectively. We used the probability‑weighted expected return method (PWERM) to determine the fair value of the shares of the Series A‑1 and A‑2 convertible preferred stock. PWERM is a scenario‑based analysis that estimates the value per share based on the probability‑weighted present value of expected future investment returns, considering each of the possible outcomes available to us, as well as the economic and control rights of each share class. | ||||
On September 23, 2013 we sold 1,766,430 additional shares of Series A‑1 convertible preferred stock for gross proceeds of $2.4 million at a purchase price of $1.36 per share. We determined the fair value of the shares of Series A‑1 convertible preferred stock sold to be $4.7 million, based on a per share fair value of $2.69, determined by estimating the enterprise value of the Company based on a projected offering price in an initial public offering, and we recorded a deemed dividend of $2.3 million for the difference in the sales price of the Series A‑1 convertible preferred stock and the fair value of the shares. Transaction costs of $34,000 related to the sale were recorded against Additional Paid in Capital. | ||||
Initial_Public_Offering
Initial Public Offering | 12 Months Ended |
Dec. 31, 2014 | |
Initial Public Offering | |
Initial Public Offering | 11. Initial Public Offering |
On December 2, 2013, we commenced our initial public offering pursuant to a registration statement on Form S‑1 that was declared effective by the SEC on December 3, 2013 and that registered an aggregate of 14,639,500 shares of our common stock for sale to the public at a price of $5.50 per share and an aggregate offering price of $80,517,250. The net offering proceeds to us, after deducting underwriting discounts and commissions and offering costs, were approximately $72.5 million. Deferred offering costs as of December 31, 2013, consisted of legal, accounting, printing and filing fees incurred in the preparation of the Company’s Registration Statement on Form S‑1 as part of the Company’s IPO have been offset against the IPO proceeds upon the completion of the offering in December 2013. | |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events |
We completed an evaluation of all subsequent events through the date the financial statements were issued to ensure that this filing includes appropriate disclosure of events both recognized in the December 31, 2014 financial statements and events which occurred but were not recognized in the financial statements. | |
In January 2015, we entered into a new lease agreement for the Monrovia property. The new lease agreement replaces the existing lease, is effective January 1, 2015 and extends the term of the lease to June 2020. The lease includes an option to renew at our discretion for an additional five years at the prevailing market rate. The total payments under the new lease are $2.8 million. We are also obligated for other lease related costs such as personal property taxes, insurance, maintenance and utilities. | |
Condensed_Quarterly_Financial_
Condensed Quarterly Financial Data (unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Condensed Quarterly Financial Data (unaudited) | ||||||||||||||||
Condensed Quarterly Financial Data (unaudited) | 13. Condensed Quarterly Financial Data (unaudited) | |||||||||||||||
The following table contains selected unaudited financial data for each quarter of 2014 and 2013. The unaudited information should be read in conjunction with the Company’s financial statements and related notes included elsewhere in this report. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. | ||||||||||||||||
Quarterly Financial Data (in thousands, except per share data): | ||||||||||||||||
2014 Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
Total revenue | $ | 2,184 | $ | 824 | $ | 848 | $ | 5,664 | ||||||||
Loss from operations | -3,767 | -5,053 | -6,287 | -1,350 | ||||||||||||
Net loss | -3,751 | -5,044 | -6,278 | -1,349 | ||||||||||||
Basic net loss per common share | -0.12 | -0.16 | -0.2 | -0.04 | ||||||||||||
Diluted net loss per common share | $ | -0.12 | $ | -0.16 | $ | -0.2 | $ | -0.04 | ||||||||
2013 Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
Total revenue | $ | 1,345 | $ | 3,921 | $ | 3,161 | $ | 1,745 | ||||||||
Loss from operations | -3,961 | -1,006 | -1,843 | -3,710 | ||||||||||||
Net loss | -4,612 | -50,109 | -1,835 | -3,703 | ||||||||||||
Basic net loss per common share | -63.78 | 1,341.67 | -57.87 | -0.37 | ||||||||||||
Diluted net loss per common share | $ | -63.78 | $ | -3.88 | $ | -57.87 | $ | -0.37 | ||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Polices) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Basis of Presentation | Basis of Presentation | |||||||||||||
The Company’s financial statements as of December 31, 2014, and 2013 and for the years then‑ended have been prepared in accordance with accounting principles generally accepted in the United States. | ||||||||||||||
Reverse Stock Split and Conversion of Preferred Stock | Reverse Stock Split and Conversion of Preferred Stock | |||||||||||||
On November 1, 2013, our board of directors and the requisite holders of our voting stock authorized the filing of a certificate of amendment to our amended and restated certificate of incorporation for the purposes of effecting a 3.1‑for‑1 reverse split of the common stock. The certificate of amendment was filed on November 1, 2013 and the stock split became effective as of that date. Accordingly, all references to numbers of common shares, including the number of common shares on an as‑if‑converted basis, per‑share data and share prices and exercise prices in the accompanying financial statements have been adjusted to reflect the reverse stock split on a retroactive basis. | ||||||||||||||
Each 3.1 shares of convertible preferred stock was convertible, at the stockholder’s option, into one share of common stock. Additionally, each share of convertible preferred stock was automatically converted into common stock, at the then‑effective conversion rate upon the effective date of a registration statement filed with the SEC under the Securities Act or Exchange act. | ||||||||||||||
On December 3, 2013, our registration statement on Form S‑1 related to our initial public offering became effective and 49,671,392 shares of Series A‑1 preferred stock converted into 16,022,915 shares of common stock and 1,851,814 shares of Series A‑2 preferred stock converted into 597,359 shares of common stock. | ||||||||||||||
Use of Estimates | Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||||||||
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which establishes principles for reporting revenue and cash flows arising from an entity’s contracts with customers. The new pronouncement is effective for reporting periods beginning after December 15, 2016 and will replace most of the existing revenue recognition guidance within the United States GAAP. The new pronouncement permits the use of either the retroactive or cumulative effect transition method. Early adoption is not permitted. | ||||||||||||||
The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures. | ||||||||||||||
Revenue Recognition | Revenue Recognition | |||||||||||||
We have, to date, earned revenue from research collaborations, which may include research and development services, licenses of our internally‑developed technologies, or a combination of both. We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; transfer or access of technology has been completed or services have been rendered; our price to the customer is fixed or determinable and collectability is reasonably assured. | ||||||||||||||
The terms of our license and research and development agreements generally include nonrefundable upfront payments, research funding, license fees and, milestone and other contingent payments to us for the achievement of defined collaboration objectives and certain clinical, regulatory and sales‑based events, as well as royalties on sales of any commercialized products. | ||||||||||||||
The terms of our licensing agreements include non‑refundable upfront fees, annual licensing fees, and contractual payment obligations for the achievement of pre‑defined preclinical, clinical, regulatory and sales‑based events by our partners. The licensing agreements also include royalties on sales of any commercialized products by our partners. | ||||||||||||||
Multiple‑Element Revenue Arrangements. Certain of our collaboration and license agreements represent multiple‑element revenue arrangements. To account for such transactions, we determine the elements, or deliverables, included in the arrangement and determine which deliverables are separate units for accounting purposes. We consider delivered items to be separate units of accounting if the delivered items have stand‑alone value to the customer. If the delivered items are separate units we allocate the consideration received or due under the arrangement to the various elements based on each elements’ relative selling price. The identification of individual elements in a multiple‑element arrangement and the estimation of the selling price of each element involve significant judgment, including consideration as to whether each delivered element has standalone value to the customer. We determine the estimated selling price for deliverables within each arrangement using vendor‑specific objective evidence (VSOE) of selling price, if available, or third‑party evidence of selling price if VSOE is not available, or our best evidence of selling price if neither VSOE nor third‑party evidence is available. | ||||||||||||||
Determining the best estimate of selling price for a deliverable requires significant judgment. We use our best estimate of selling price to estimate the selling price for licenses to our technologies and product candidates, since we do not have VSOE or third‑party evidence of selling for these deliverables. The basis of our estimate of selling price is the arm’s length negotiation with the licensee that occurs in each transaction. The potential value of our technology to a licensee in a transaction depends on a variety of factors unique to each transaction. Factors that impact the negotiation and hence that we consider in our estimates center on the specific product candidate and include: the product candidate’s potential market size, the product candidate’s stage of development, the existence of competitive technologies that could be substituted for ours by the licensee and the scientific assessment of the product candidate’s likelihood of success at various development stages. The most common deliverable is the commercial license for our technology in the product candidate, and frequently a research license with an option for commercial license. The upfront payments, annual license fees, contingent payments, milestones and royalties relate to these licenses and/or options and depend on the product‑specific factors described above. The other significant deliverable is research and development services and the price for these depends on estimates for our personnel and supply costs and the costs of third‑party contract research organizations necessary to support the services. | ||||||||||||||
We recognize consideration allocated to an individual element when all other revenue recognition criteria are met for that element. Our multiple‑element revenue arrangements may include the following: | ||||||||||||||
· | License arrangements. The deliverables under our collaboration and license agreements generally include exclusive or non‑exclusive licenses to one or more of our technologies. The technologies can be applied to a collaborator’s product candidates for discovery, development, manufacturing and commercialization. We will also enter into agreements for the exclusive or non‑exclusive licenses to our internally developed product candidates. To account for this element of the arrangement, we evaluate whether the exclusive or non‑exclusive license has standalone value apart from the undelivered elements to the collaboration partner, which may include research and development services or options for commercial licenses, based on the consideration of the facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and other market participants. We recognize arrangement consideration allocated to licenses upon delivery of the license, if the facts and circumstances indicate the license has standalone value apart from the undelivered elements. If facts and circumstances indicate that the delivered license does not have standalone value from the undelivered elements, we recognize the revenue as a combined unit of accounting. In those circumstances we recognize revenue from non‑refundable upfront fees in the same manner as the undelivered item(s), which is generally the period over which we provide research and developments services. | |||||||||||||
· | Research and Development Services. The deliverables under our collaboration and license arrangements may include research and development services we perform on behalf of or with the collaboration partner. As the provision of research and development services is an integral part of our operations and we may be principally responsible for the performance of these services under the agreements, we recognize revenue on a gross basis for research and development services as we perform those services. Additionally, we recognize research related funding under collaboration research and development efforts as revenue as we perform or deliver the related services in accordance with contract terms. | |||||||||||||
Milestone Revenue. Our collaboration and license agreements generally include contingent contractual payments related to achievement of specific research, development and regulatory milestones and sales‑based milestones that are based solely upon the performance of the licensor or collaborator. Research, development and regulatory contingent contractual payments and milestone payments are typically payable under our collaborations when our collaborator selects a compound, or initiates or advances a covered product candidate in preclinical or clinical development, upon submission for marketing approval of a covered product with regulatory authorities, upon receipt of actual marketing approvals of a covered product or for additional indications, or upon the first commercial sale of a covered product. Sales‑based contingent contractual payments are typically payable when annual sales of a covered product reach specific levels. | ||||||||||||||
At the inception of each arrangement that includes contingent contractual payments, we evaluate whether each potential payment and milestone is substantive and at risk to both parties based on the basis of the contingent nature of the milestone event. We evaluate factors such as scientific, regulatory, commercial and other risks that we must overcome to achieve the respective milestone event, whether the contractual payments due at each milestone event is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment and whether the contingent contractual payment relates solely to past performance. Additionally, certain of our product development and technology license arrangements may include milestone payments related to the achievement of specific research and development milestones, which are achieved in whole or in part on our performance. | ||||||||||||||
We recognize any payment that is contingent upon the achievement of a substantive milestone entirely in the period in which the milestone is achieved. A milestone is defined as an event that can only be achieved based in whole or in part either on our performance, or the performance of our collaborators, or the occurrence of a specific outcome resulting from our past performance for which there is a substantive uncertainty at the date the arrangement is entered into that the event will be achieved. | ||||||||||||||
Collaborative Research and Licensing Agreements | Collaborative Research and Licensing Agreements | |||||||||||||
Novo Nordisk A/S | ||||||||||||||
In December 2014, we entered into a Collaboration and License Agreement with Novo Nordisk A/S (Novo). Under the terms of the agreement, we granted Novo a research license to use certain Xencor technologies including our bispecific, IIb, Xtend and others during a two year research term. We will provide research support for four FTE’s in collaboration with Novo to apply our technologies to Novo provided targets to identify compounds with improved properties. Novo has an option to extend the research term for another twelve months upon written notice to us and payment of another year of research funding. At the end of the research term, Novo will have a commercial license to develop and commercialize any new targets identified during the research term. | ||||||||||||||
Under the agreement, in January 2015, we received an upfront payment of $2.5 million and we will receive research funding of $1.6 million per year over the research term. We are also eligible to receive $2.0 million in milestone payments upon the successful completion of certain projects during the research term. In addition, if Novo identifies a compound from the collaboration to advance into clinical development, we are eligible to receive future development, regulatory and commercial milestone payments and royalties. The potential future milestones total $167.3 million and include $36.3 million in development milestones, $51.0 million in regulatory milestones and $80.0 million in sales milestones. | ||||||||||||||
We determined that the deliverables under the arrangement were the research license to our technologies and the research support. We believe that the research support and the technologies are integral to each other and are not separate units of accounting. The commercial license did not have standalone value at inception of the arrangement due to the uncertainty of identifying a commercial target. | ||||||||||||||
At inception of the arrangement, we determined that consideration under the agreement is represented by the upfront payment and the research funding and we are recognizing the $2.5 million upfront payment as income over the two year research term. The research funding is being recognized into income over the period that the services are being provided. We determined that future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones. | ||||||||||||||
During the year ended December 31, 2014 we recognized $0.1 million in revenue related to the arrangement; as of December 31, 2014 we have $2.9 million in deferred revenue related to the agreement. | ||||||||||||||
MorphoSys Ag | ||||||||||||||
In June 2010, we entered into a Collaboration and License Agreement with MorpohSys AG (MorphoSys), which we subsequently amended in March 2012. The agreement provided us an upfront payment of $13.0 million in exchange for an exclusive worldwide license to our patents and know‑how to research, develop and commercialize our XmAb5574 product candidate (subsequently renamed MOR208) with the right to sublicense under certain conditions. Under the agreement, we agreed to collaborate with MorphoSys to develop and commercialize XmAb5574/MOR208. We determined that the arrangement was one with multiple deliverables and we identified the multiple elements in the agreement as the license of XmAb5574/MOR208 and the research and development services provided by us for the initial Phase 1 clinical trial. If certain developmental, regulatory and sales milestones are achieved, we are eligible to receive future milestone payments and royalties. We determined that the future milestone payments were substantive and contingent and we did not allocate any of the upfront consideration to these milestones. Our responsibility with respect to the collaboration services is limited to completion of the Phase 1 clinical trial. MorphoSys is responsible all further development of XmAb5574/MOR208. | ||||||||||||||
Under the terms of the amendment, we received additional proceeds for the additional research and development services related to extension of the Phase 1 clinical trial. During 2012, we recognized $0.4 million of revenue related to the additional services provided. | ||||||||||||||
In April and May 2013, MorphoSys initiated two Phase II clinical trials under the arrangement and we received a milestone payment of $3.0 million. We have recognized the payment as revenue in the period that the milestone event occurred. | ||||||||||||||
The total revenue recognized under this arrangement was zero, $3.0 million and $2.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014, we have no deferred revenue related to this agreement. | ||||||||||||||
Alexion Pharmaceuticals, Inc. | ||||||||||||||
In January 2013, we entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds against six different target programs during a five‑year research term under the agreement, up to completion of the first multi‑dose human clinical trial for each target compound. Alexion may extend the research term for an additional three years upon written notice to us and payment of an extension fee of $2.0 million. Alexion is responsible for conducting all research and development activities under the agreement at its own expense. | ||||||||||||||
In addition, we granted to Alexion an exclusive option, on a target‑ by‑target basis, to obtain an exclusive commercial, worldwide, royalty‑ bearing license, with sublicensing rights, under our Xtend technology to develop and commercialize products that contain the target for which the option is exercised. In order to exercise this option, Alexion must pay a $4.0 million option fee with respect to each target for which the option is exercised. Alexion may exercise this option at any time during the research term but must exercise it prior to initiating a second clinical trial with a target that includes our technology. | ||||||||||||||
Under the agreement, we received an upfront payment of $3.0 million. Alexion is also required to pay an annual maintenance fee of $0.5 million during the research term of the agreement and $1.0 million during any extension of the research term. In addition, if certain development, regulatory and commercial milestones are achieved, we are eligible to receive up to $66.5 million for the first product to achieve such milestones on a target‑by‑target basis. If licensed products are successfully commercialized, we are also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sublicensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product‑by‑product and country‑by‑ country basis until the expiration of the last‑to‑expire valid claim in a licensed patent covering the applicable product in such country. | ||||||||||||||
Absent early termination, the term of the agreement will continue until the expiration of Alexion’s royalty payment obligations or until the expiration of the research term if Alexion has not exercised its option for a product license under the agreement. Either party may terminate the agreement for a material breach of the agreement by the other party if such breach remains uncured for 60 days, or 30 days in the case of a non‑payment breach. Alexion may terminate the agreement without cause on a target‑by‑target basis upon 90 days’ advance written notice to us. | ||||||||||||||
The total revenue recognized under this arrangement was $1.0 million and $0.9 million for the years ended December 31, 2014 and 2013 respectively. As of December 31, 2014 we have deferred revenue related to this agreement of $1.6 million. | ||||||||||||||
Amgen, Inc. | ||||||||||||||
In December 2010, we entered into a Collaboration and Option Agreement with Amgen, Inc. (Amgen), pursuant to which we agreed to collaborate with Amgen to research, develop and commercialize XmAb5871 and products based thereon. Under the agreement, we granted to Amgen an option to acquire an exclusive license to research, develop, manufacture and commercialize XmAb5871 and certain related products worldwide, which option is exercisable by Amgen only after Amgen’s (1) notification to us that it is electing to exercise the option and (2) payment of an option exercise fee to us during the option period under the agreement. The term of the option began at the effective date of the Agreement and expires 90 days after delivery of the data from a Phase 2 proof‑of‑concept (POC) clinical trial. During the option period and prior to Amgen exercising its option under the agreement, we retain ownership of the compound and are responsible for all clinical development of the compound through completion of the Phase 2 POC clinical trial and delivery of the clinical study data for the POC clinical trial. We received a nonrefundable upfront payment of $11.0 million upon execution of the agreement and a $2.0 million payment in January 2013 upon initiation of a Phase 1b trial. We determined that substantially all of the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. | ||||||||||||||
We determined that the arrangement is one with multiple deliverables and we identified the multiple elements at the inception of the agreement. We determined that the deliverables under the arrangement were the research and development services and the option to acquire the rights to XmAb5871. Since the option is a contingent and a substantive element, no portion of the upfront fee was allocated to it. The upfront payment was allocated to the research and development services and is being recognized ratably over the estimated service period to complete the Phase 2 POC trial and delivery of the clinical study reports to Amgen. We have estimated that the term of the service period to be 72 months from inception of the agreement through completion of the POC trial. | ||||||||||||||
In October 2014, we entered into an agreement with Amgen to terminate the Collaboration Agreement pursuant to which all worldwide rights to develop and commercialize XmAb5871 reverted back to us. Our obligations to continue development of XmAb5871 under the terms of the Collaboration Agreement terminated effective as of the date of the termination agreement. As a result of and effective as of the date of the termination agreement, all of Amgen’s rights to XmAb5871 terminated including the right to exercise an exclusive option to acquire the worldwide rights to XmAb5871. Amgen’s obligations to make any further payments to us are also terminated. In connection with the termination, we granted Amgen a right of first negotiation (ROFN) to obtain an exclusive license to develop and commercialize any XmAb5871 product. | ||||||||||||||
The ROFN requires us to notify Amgen if we decide to pursue a licensing transaction with a third party involving XmAb5871. Upon receipt of the notification, Amgen will have a limited time to review the data from XmAb5871 and enter into negotiations to obtain an exclusive license to develop and commercialize any future XmAb5871 product. The ROFN will expire upon the earlier of: (1) October 27, 2019, (2) initiation by us of a Phase 3 clinical trial with XmAb5871 or (3) the transfer or sale to a third party of substantially all of our business. | ||||||||||||||
We have determined that the termination results in a cancellation of all our obligations to Amgen under the Collaboration Agreement. We have evaluated the terms of the ROFN and determined that it has de minimis value because Amgen’s rights under the ROFN are limited to an exclusive negotiating period of a short duration and there is no bargain element in the ROFN. As a result of the termination, we have recognized $5.2 million of income which represents the balance of the deferred revenue related to the agreement at the time of the termination. | ||||||||||||||
The total revenue recognized under this arrangement was $6.9 million, $2.2 million and $1.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. As of December 31, 2014 we have no deferred revenue related to this agreement. | ||||||||||||||
MedImmune LLC | ||||||||||||||
In December 2012, we entered into a Cross‑License Agreement with MedImmune, LLC (MedImmune). Under the agreement we provided MedImmune with a non‑exclusive research license to certain technology and options to acquire commercial licenses to a limited number of compounds. In exchange, MedImmune provided us with a worldwide, non‑exclusive, royalty‑free license and sub‑license to certain U.S. patent rights granted to MedImmune. We determined that the exchange is a non‑monetary transaction as provided under ACS 845‑10, Non‑Monetary Transactions. The transaction did not include any cash proceeds and only the exchange of intellectual property rights between the two companies. | ||||||||||||||
We estimated the fair value of the license and options transferred to be $0.75 million. Our estimate was based on the risk adjusted discounted cash flow that is associated with the research license and options to commercial licenses transferred to MedImmune. We recognized licensing revenue on the exchange of $0.75 million for the year ended December 31, 2012 equal to the fair value of the assets transferred. We also recorded an asset of $0.75 million to reflect the licensing rights that we acquired from MedImmune in the exchange; the capitalized rights are being amortized over the shorter of the remaining patent term or the estimated useful life of the license. | ||||||||||||||
MedImmune Ventures, Inc., an affiliate of MedImmune, was one of our 5% stockholders and has a designee on our Board of Directors as of December 31, 2012. As a result of our Initial Public Offering that became effective December 2013, MedImmune was no longer a 5% stockholder. | ||||||||||||||
Boehringer Ingelheim International GmbH | ||||||||||||||
In 2007 we entered into a Research Licensee and Collaboration Agreement with Boehringer Ingelheim International GmbH (BI). Under the agreement, we provided BI with a three‑year research license to one of our technologies and commercial options. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to two compounds. Upon exercise of an option to a commercial license, we are eligible to receive future milestone payments and royalties. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. The upfront payment and the annual license fees are being recognized ratably into income over the research license term which expired in 2011 and payments for the commercial options were recognized in the period the commercial option was exercised since the options were contingent and substantive. During 2012, BI advanced a compound that incorporates our technology into clinical development and we received a milestone payment of $1.2 million and recognized the payment as revenue in the period the milestone event occurred. No revenue related to this arrangement was recognized in 2014 or 2013. There is no deferred revenue related to this agreement at December 31, 2104. | ||||||||||||||
Janssen, Research & Development, LLC | ||||||||||||||
In 2009 we entered into a Research License and Option Agreement with Janssen, Research & Development, LLC (Janssen). Under the agreement, we provided Janssen with non‑exclusive research license and options for exclusive commercial licenses to apply our technology to their compounds. We identified the deliverables under the agreement at inception as the research licenses and options to acquire commercial licenses to up to three compounds. Upon exercise of an option, we are eligible to receive future milestone and royalty payments. We determined that the options and future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the options or milestones. The upfront payment of $1.0 million received at inception and the annual research license renewal payments are being recognized as revenue recorded ratably over the two‑year term of the research license. During 2012, we recognized total revenue of $1.4 million consisting of $0.9 million in research license revenue and $0.5 million for the exercise of a commercial option. No revenues related to this arrangement were recognized in 2014 and 2013. There is no deferred revenue related to this agreement at December 31, 2104. | ||||||||||||||
CSL Limited | ||||||||||||||
In 2009 we entered into a Research License and Commercialization Agreement with CSL Limited (CSL-2009). Under the agreement, we provided CSL with a research license to one of our technologies and up to five commercial options. The upfront payment of $0.75 million received at inception and the annual research license renewal payments were recognized as revenue ratably over the five‑year term of the research license. During 2012, we recognized total revenue of $1.8 million consisting of $0.3 million in annual research license revenue and $1.5 million in milestone payments. We identified the deliverables under the agreement at inception as the five‑year research licenses and options to acquire commercial licenses. | ||||||||||||||
In May 2013, we entered into an amendment to a February 2009 Research License and Commercialization Agreement with CSL, which eliminated a contingent milestone payment requirement and reduced the royalty rate on net sales for a product in development. The amendment provided for a payment upon signing of $2.5 million. We determined that the amendment was a material modification to the original agreement and evaluated the remaining deliverables at the date of the amendment. We determined that the remaining deliverables were the research license which expires in February 2014 and four additional options to take commercial licenses through the term of the research period. The options were considered to be substantive and contingent and we did not allocate any of the proceeds received in the amendment to the options. The amendment proceeds were recognized into income over the remaining period of the research term. Total revenue recognized for the years ended December 31, 2014, 2013 and 2012 was $0.7 million, $2.4 million and $1.8 million respectively. As of December 31, 2014 we have no deferred revenue related to this agreement. | ||||||||||||||
In March 2013, we entered into a License Agreement with CSL Limited (CSL-2013). Under the terms of the agreement, we provided CSL with a non‑exclusive commercial license to apply our technology to one of their compounds. The agreement provided for upfront payment of $0.5 million and we are eligible to receive future milestones as CSL advances the compound into clinical development. We determined that the deliverables under this agreement were the non‑exclusive commercial license. We determined that the future milestones and related payments were substantive and contingent and we did not allocate any of the upfront consideration to the milestones. We recognized zero and $0.5 million of revenue related to this agreement for the year ended December 31, 2014 and 2013, respectively. There is no deferred revenue related to this agreement at December 31, 2014. | ||||||||||||||
Merck Sharp & Dohme Corp. | ||||||||||||||
In July 2013, we entered into a License Agreement with Merck Sharp & Dohme Corp (Merck). Under the terms of the agreement, we provided Merck with a non‑exclusive commercial license to certain patent rights to our Fc domains to apply to one of their compounds. We also provided Merck with contingent options to take additional non‑exclusive commercial licenses. The contingent options provide Merck an opportunity to take non‑exclusive commercial licenses at an amount less than the amount paid for the original license. The agreement provided for an upfront payment of $1.0 million and annual maintenance fees totaling $0.5 million. We are also eligible to receive future milestones and royalties as Merck advances the compound into clinical development. | ||||||||||||||
We determined that the deliverables under this agreement were the non‑exclusive commercial license and the options. The options are considered substantive and contingent and no amount of the upfront payment was allocated to these options. We also determined that the future milestones and related payments were substantive and contingent and did not allocate any of the upfront payment to the milestones. | ||||||||||||||
In the first quarter of 2014, Merck initiated a Phase 1 clinical trial which triggered a $0.5 million milestone payment to us. For the years ended December 31, 2014 and 2013 total revenue recognized was $0.6 million and $1.0 million respectively. As of December 31, 2014, we had deferred revenue of $0.1 million related to this agreement. | ||||||||||||||
As of December 31, 2014, the Company may be eligible to receive the following maximum payments from its collaborative partners and licensees based upon contractual terms in the agreements assuming all options are exercised and all milestones are achieved: | ||||||||||||||
Potential Milestones (in millions) (1) | ||||||||||||||
Total | ||||||||||||||
Partner | Development-based | Regulatory-based | Sales-based | Milestones | ||||||||||
MorphoSys | $ | 62.0 | $ | 187.0 | $ | 50.0 | $ | 299.0 | ||||||
Alexion | 51.0 | 168.0 | 180.0 | 399.0 | ||||||||||
BI | 9.0 | 6.0 | 12.0 | 27.0 | ||||||||||
CSL 2009 | 6.0 | 4.0 | 5.0 | 15.0 | ||||||||||
CSL 2013 | 8.0 | 4.0 | 24.5 | 36.5 | ||||||||||
Merck | 3.5 | 6.0 | — | 9.5 | ||||||||||
Novo Nordisk | 36.3 | 51.0 | 80.0 | 167.3 | ||||||||||
Janssen | 6.0 | — | 4.0 | 10.0 | ||||||||||
Total | $ | 181.8 | $ | 426.0 | $ | 355.5 | $ | 963.3 | ||||||
-1 | The payments are solely dependent upon activities of the collaborative partner or licensee. | |||||||||||||
The $9.5 million, $10.2 million and $9.5 million of revenue recorded for the years ended December 31, 2014, 2013 and 2012, respectively was earned principally from the following licensees (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Amgen | $ | 6.9 | $ | 2.2 | $ | 1.8 | ||||||||
MorphoSys | — | 3.0 | 2.0 | |||||||||||
Janssen | — | — | 1.4 | |||||||||||
Merck | 0.6 | 1.0 | — | |||||||||||
Alexion | 1.0 | 0.9 | — | |||||||||||
CSL | 0.7 | 2.9 | 1.8 | |||||||||||
BI | — | — | 1.2 | |||||||||||
Other | 0.3 | 0.2 | 1.3 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
As of December 31, 2014 and 2013 our accounts receivable included $3.0 million and $0.1 million from Novo Nordisk A/S and MorphoSys AG respectively. | ||||||||||||||
A substantial portion of our revenue is earned from collaboration partners outside the United States. Non‑U.S. revenue is denominated in U.S. dollars. A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2014, 2013 and 2012 is as follows (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
U.S. Revenue | $ | 8.6 | $ | 4.2 | $ | 4.4 | ||||||||
Non-U.S. Revenue | 0.9 | 6.0 | 5.1 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
Deferred Revenue | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
U.S. Revenue | $ | 8.6 | $ | 4.2 | $ | 4.4 | ||||||||
Non-U.S. Revenue | 0.9 | 6.0 | 5.1 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
Deferred Revenue | ||||||||||||||
Deferred revenue arises from payments received in advance of the culmination of the earnings process. We have classified deferred revenue expected to be recognized within the next 12 months as a current liability. We recognize deferred revenue as revenue in future periods when the applicable revenue recognition criteria have been met. The total amounts reported as deferred revenue were $4.6 million and $9.7 million for the years ended December 31, 2014 and 2013, respectively. | ||||||||||||||
Research and Development Expenses | Research and Development Expenses | |||||||||||||
Research and development expenses include costs we incur for our own and for our collaborators research and development activities. Research and development costs are expensed as incurred. These costs consist primarily of salaries and benefits, including associated stock‑based compensation, laboratory supplies, facility costs, and applicable overhead expenses of personnel directly involved in the research and development of new technology and products, as well as fees paid to other entities that conduct certain research development activities on our behalf. We estimate preclinical study and clinical trial expenses based on the services performed pursuant to the contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on our behalf based on the actual time and expenses incurred by them. Further, we accrue expenses related to clinical trials based on the level of patient enrollment and activity according to the related agreement. We monitor patient enrollment levels and related activity to the extent reasonably possible and adjust estimates accordingly. During 2014, 2013 and 2012 we expensed $18.5 million, $17.0 million and $12.7 million, respectively, for research and development. | ||||||||||||||
We capitalize acquired research and development technology licenses and third‑party contract rights and amortize the costs over the shorter of the license term or the expected useful life. We review the license arrangements and the amortization period on a regular basis and adjust the carrying value or the amortization period of the licensed rights if there is evidence of a change in the carrying value or useful life of the asset. See “Patents, licenses and other intangible assets.” | ||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||||||||||
We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase. | ||||||||||||||
The primary objectives for our investment portfolio are liquidity and safety of principal. Investments are made to achieve the highest rate of return for us, while maintaining consistency with these two objectives. | ||||||||||||||
Concnetrations of Risk | Concentrations of Risk | |||||||||||||
Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Amounts on deposit in excess of federally insured limits at December 31, 2014 and 2013 approximated $54.0 million and $77.5 million, respectively. | ||||||||||||||
We have payables with one service provider that represents 47% of our total payables and five service providers that represented 57% of our total payables for the years ended December 31, 2014 and 2013, respectively. We rely on two critical suppliers for the manufacture of our drug product for use in our clinical trials. While we believe that there are alternative vendors available, a change in manufacturing vendors could cause a delay in the availability of drug product and result in a delay of conducting and completing our clinical trials. No other vendor accounted for more than 10.0% of payables at December 31, 2014 and 2013. | ||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||||||||
Our financial instruments primarily consist of cash, money market funds, trade accounts receivable, accounts payable, accrued expenses and convertible notes payable. The fair value of cash, money market funds, trade accounts receivable, accounts payable and accrued expenses closely approximate their carrying value due to their short maturities. The carrying amounts of convertible notes payable approximate their fair value, as the interest rates, in consideration of the conversion feature, approximate the interest rates presently available to us. | ||||||||||||||
We determine the fair value of the principal amount of financial and nonfinancial assets and liabilities using the fair value hierarchy, which describes three levels of inputs that may be used to measure fair value, as follows: | ||||||||||||||
Level 1—Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | ||||||||||||||
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
There are no fair value assets or liabilities. | ||||||||||||||
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, ranging from three to seven years, or the lease term, whichever is shorter. Expenditures for repairs and maintenance are charged to expense as incurred while renewals and improvements are capitalized. Useful lives by asset category are as follows: | ||||||||||||||
Computers, software and equipment | 3 - 5 years | |||||||||||||
Furniture and fixtures | 5 - 7 years | |||||||||||||
Leasehold improvements | 5 - 7 years or remaining | |||||||||||||
lease term, whichever is less | ||||||||||||||
Patents, Licenses, and Other Intangible Assets | Patents, Licenses, and Other Intangible Assets | |||||||||||||
The cost of acquiring licenses is capitalized and amortized on the straight‑ line basis over the shorter of the term of the license or its estimated economic life, ranging from five to 25 years. Third‑party costs incurred for acquiring patents are capitalized. Capitalized costs are accumulated until the earlier of the period that a patent is issued or we abandon the patent claims. Cumulative capitalized patent costs are amortized on a straight‑line basis from the date of issuance over the shorter of the patent term or the estimated useful economic life of the patent, ranging from 13 to 20 years. Our senior management, with advice from outside patent counsel, assesses three primary criteria to determine if a patent will be capitalized initially: i) technical feasibility, ii) magnitude and scope of new technical function covered by the patent compared to the company’s existing technology and patent portfolio, particularly assessing the value added to our product candidates or licensing business, and iii) legal issues, primarily assessment of patentability and prosecution cost. We review our intellectual property on a regular basis to determine if there are changes in the estimated useful life of issued patents and if any capitalized costs for unissued patents should be abandoned. Capitalized patent costs related to abandoned patent filings are charged off in the year of the decision to abandon. During 2014, 2013 and 2012, we abandoned previously capitalized patent and licensing related charges of $509,000, $205,000 and $388,000, respectively. | ||||||||||||||
The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands): | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Patents, definite life | $ | 5,720 | $ | 4,834 | ||||||||||
Patents, pending issuance | 3,654 | 3,515 | ||||||||||||
Licenses and other amortizable intangible assets | 1,797 | 1,917 | ||||||||||||
Nonamortizable intangible assets (trademarks) | 400 | 369 | ||||||||||||
Total gross carrying amount | 11,571 | 10,635 | ||||||||||||
Accumulated amortization—patents | -1,776 | -1,395 | ||||||||||||
Accumulated amortization—licenses and other | -679 | -426 | ||||||||||||
Total intangible assets, net | $ | 9,116 | $ | 8,814 | ||||||||||
Amortization expense for patents, licenses, and other intangible assets was $694,000, $598,000 and $373,000 for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||
Future amortization expense for patents, licenses, and other intangible assets recorded as of December 31, 2014, and for which amortization has commenced, is as follows: | ||||||||||||||
Years ending | ||||||||||||||
December 31, | ||||||||||||||
(in thousands) | ||||||||||||||
2015 | $ | 535 | ||||||||||||
2016 | 538 | |||||||||||||
2017 | 538 | |||||||||||||
2018 | 527 | |||||||||||||
2019 | 515 | |||||||||||||
Thereafter | 2,408 | |||||||||||||
Total | $ | 5,061 | ||||||||||||
The above amortization expense forecast is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets, and other events. As of December 31, 2014, the Company has $3.7 million of intangible assets which are in‑process and have not been placed in service and, accordingly amortization on these assets has not commenced. | ||||||||||||||
Long-Lived Assets | Long‑Lived Assets | |||||||||||||
Management reviews long‑lived assets which include fixed assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value for our long‑lived assets is determined using the expected cash flows discounted at a rate commensurate with the risks involved. | ||||||||||||||
As of December 31, 2014, we determined that our continuing losses from operations triggered a review of the carrying value of our long‑lived assets including our capitalized patent and licensing costs. We conducted an impairment analysis of the assets in accordance with ASC 360 by estimating the future undiscounted cash flows as of December 31, 2014, by patent family, which included granted and pending patents and related licenses. For purposes of the analysis, we grouped our patents into the four primary technology groups, IIb, ADCC, Xtend and, bi‑specific, and compared the carrying value of the group to the undiscounted cash flows expected to be received from the patents in each group. We determined that the fair value of the potential future cash flows using this method was in excess of the carrying value of the intangible assets as of December 31, 2014. The patent groups assessed for impairment were the IIb, ADCC, Xtend and bi‑specific patent families and represented the lowest level of cash flows for evaluation. These four patent families cover all of our current product candidates and our current license agreements. We modeled the cash flows from our internal product development program XmAb7195 and licensed programs that use each particular category of patent asset. We used multiple published sources of pharmaceutical product development stage failure rates to estimate failure rates at each stage of clinical development in order to probability weight the cash flows for each internal and licensed program. We did not recognize a loss from impairment for the years ended December 31, 2014, 2013 or, 2012. | ||||||||||||||
Income Taxes | Income Taxes | |||||||||||||
We account for income taxes in accordance with accounting guidance which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. | ||||||||||||||
We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is a 50% or less likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. | ||||||||||||||
Our policy is to recognize interest and penalties on taxes, if any, as a component of income tax expense. We did not have any uncertain tax positions at December 31, 2014 or 2013. | ||||||||||||||
We are potentially subject to tax authority audits for the years 2011 and onwards for U.S. federal purposes and 2010 and onwards for state purposes. | ||||||||||||||
Stock-Based Compensation | Stock‑Based Compensation | |||||||||||||
We recognize compensation expense using a fair‑value‑based method for costs related to all share‑based payments, including stock options and shares issued under our Employee Stock Purchase Plan (“ESPP”). Stock‑based compensation cost related to employees and directors is measured at the grant date, based on the fair‑value—based measurement of the award using the Black‑Scholes method, and is recognized as expense over the requisite service period on a straight‑line basis. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent period if actual forfeitures differ from those estimates. We use historical data and industry published statistics to estimate pre‑vesting option forfeitures and record stock‑based compensation expense only for those awards that are expected to vest. We recorded stock‑based compensation (benefit) and expense for stock‑based awards to employees, directors and consultants of approximately $1.8 million, $198,000 and $29,000 for the years ended December 31, 2014, 2013 and 2012, respectively. Included in the 2014 total compensation expense is $172,000 under our ESPP. | ||||||||||||||
Options granted to individual service providers that are not employees or directors are accounted for at estimated fair value using the Black‑Scholes option‑pricing method and are subject to periodic re‑measurement over the period during which the services are rendered. | ||||||||||||||
Net Loss Per Share | Net Loss Per Share | |||||||||||||
Basic net loss per common share is computed by dividing the net loss by the weighted‑average number of common shares outstanding during the period. Potentially dilutive securities consisting of stock options at December 31, 2014, 2013 and 2012, and convertible preferred stock and convertible promissory notes at December 31, 2012 and 2011 were not included in the diluted net loss per common shares calculation because the inclusion of such shares would have had an antidilutive effect. | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands) | ||||||||||||||
Convertible preferred stock | — | — | 12,188 | |||||||||||
Convertible promissory notes | — | — | 2,800 | |||||||||||
Options to purchase common stock | 2,827 | 1,794 | 1,305 | |||||||||||
Employee stock purchase plan shares | 25 | — | — | |||||||||||
Total | 2,852 | 1,794 | 16,293 | |||||||||||
The loss for the period ended December 31, 2013 was adjusted, for purposes of the diluted net income per share calculation, to reflect the deemed contribution of $144.8 million. This reflects a deemed contribution of $148.1 million from the exchange of convertible preferred stock, a deemed dividend of $1.0 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which shares were sold in June 2013, and an additional deemed dividend of $2.3 million for the difference between the fair value of the shares of Series A‑1 convertible preferred stock and the price at which additional shares were sold in the subsequent Series A‑1 closing in September 2013. | ||||||||||||||
For 2013, the diluted loss per share calculation assumes the conversion of outstanding shares of convertible preferred stock into common stock using the as‑if converted method. | ||||||||||||||
Year Ended December 31 | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands, except | ||||||||||||||
per share data) | ||||||||||||||
Basic | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Deemed contribution | — | 144,765 | — | |||||||||||
Net income (loss) attributable to common stockholders for basic income per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted-average common shares outstanding | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Basic net income (loss) per common share | $ | -0.52 | $ | 34.18 | $ | -118.86 | ||||||||
Diluted: | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) attributable to common stockholders for basic net loss per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Deemed contribution | — | -144,765 | — | |||||||||||
Net loss attributable to common stockholders for diluted net loss per share | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Dilutive effect of conversion of convertible preferred stock | — | 13,173,208 | — | |||||||||||
Weighted-average number of common shares outstanding used in computing net loss per common share | 31,390,631 | 15,645,789 | 72,302 | |||||||||||
Diluted net loss per common share | $ | -0.52 | $ | -3.85 | $ | -118.86 | ||||||||
Segment Reporting | ||||||||||||||
Year Ended December 31 | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands, except | ||||||||||||||
per share data) | ||||||||||||||
Basic | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Deemed contribution | — | 144,765 | — | |||||||||||
Net income (loss) attributable to common stockholders for basic income per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted-average common shares outstanding | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Basic net income (loss) per common share | $ | -0.52 | $ | 34.18 | $ | -118.86 | ||||||||
Diluted: | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) attributable to common stockholders for basic net loss per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Deemed contribution | — | -144,765 | — | |||||||||||
Net loss attributable to common stockholders for diluted net loss per share | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Dilutive effect of conversion of convertible preferred stock | — | 13,173,208 | — | |||||||||||
Weighted-average number of common shares outstanding used in computing net loss per common share | 31,390,631 | 15,645,789 | 72,302 | |||||||||||
Diluted net loss per common share | $ | -0.52 | $ | -3.85 | $ | -118.86 | ||||||||
Segment Reporting | ||||||||||||||
The Company determines its segment reporting based upon the way the business is organized for making operating decisions and assessing performance. The Company has only one operating segment related to the development of pharmaceutical products. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Schedule of receivables from maximum payments from collaborative partners and licensees | ||||||||||||||
Potential Milestones (in millions) (1) | ||||||||||||||
Total | ||||||||||||||
Partner | Development-based | Regulatory-based | Sales-based | Milestones | ||||||||||
MorphoSys | $ | 62.0 | $ | 187.0 | $ | 50.0 | $ | 299.0 | ||||||
Alexion | 51.0 | 168.0 | 180.0 | 399.0 | ||||||||||
BI | 9.0 | 6.0 | 12.0 | 27.0 | ||||||||||
CSL 2009 | 6.0 | 4.0 | 5.0 | 15.0 | ||||||||||
CSL 2013 | 8.0 | 4.0 | 24.5 | 36.5 | ||||||||||
Merck | 3.5 | 6.0 | — | 9.5 | ||||||||||
Novo Nordisk | 36.3 | 51.0 | 80.0 | 167.3 | ||||||||||
Janssen | 6.0 | — | 4.0 | 10.0 | ||||||||||
Total | $ | 181.8 | $ | 426.0 | $ | 355.5 | $ | 963.3 | ||||||
-1 | The payments are solely dependent upon activities of the collaborative partner or licensee. | |||||||||||||
Schedule of revenue by licensees | The $9.5 million, $10.2 million and $9.5 million of revenue recorded for the years ended December 31, 2014, 2013 and 2012, respectively was earned principally from the following licensees (in millions): | |||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Amgen | $ | 6.9 | $ | 2.2 | $ | 1.8 | ||||||||
MorphoSys | — | 3.0 | 2.0 | |||||||||||
Janssen | — | — | 1.4 | |||||||||||
Merck | 0.6 | 1.0 | — | |||||||||||
Alexion | 1.0 | 0.9 | — | |||||||||||
CSL | 0.7 | 2.9 | 1.8 | |||||||||||
BI | — | — | 1.2 | |||||||||||
Other | 0.3 | 0.2 | 1.3 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
Schedule of revenue from U.S. and Non U.S. sources | A breakdown of our revenue from U.S. and Non‑U.S. sources for the years ended December 31, 2014, 2013 and 2012 is as follows (in millions): | |||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
U.S. Revenue | $ | 8.6 | $ | 4.2 | $ | 4.4 | ||||||||
Non-U.S. Revenue | 0.9 | 6.0 | 5.1 | |||||||||||
Total | $ | 9.5 | $ | 10.2 | $ | 9.5 | ||||||||
Schedule of useful lives by asset category | ||||||||||||||
Computers, software and equipment | 3 - 5 years | |||||||||||||
Furniture and fixtures | 5 - 7 years | |||||||||||||
Leasehold improvements | 5 - 7 years or remaining | |||||||||||||
lease term, whichever is less | ||||||||||||||
Schedule of carrying amount and accumulated amortization of patents, licenses, and other intangibles | The carrying amount and accumulated amortization of patents, licenses, and other intangibles is as follows (in thousands): | |||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Patents, definite life | $ | 5,720 | $ | 4,834 | ||||||||||
Patents, pending issuance | 3,654 | 3,515 | ||||||||||||
Licenses and other amortizable intangible assets | 1,797 | 1,917 | ||||||||||||
Nonamortizable intangible assets (trademarks) | 400 | 369 | ||||||||||||
Total gross carrying amount | 11,571 | 10,635 | ||||||||||||
Accumulated amortization—patents | -1,776 | -1,395 | ||||||||||||
Accumulated amortization—licenses and other | -679 | -426 | ||||||||||||
Total intangible assets, net | $ | 9,116 | $ | 8,814 | ||||||||||
Future amortization expense for patents, licenses, and other intangible assets | ||||||||||||||
Years ending | ||||||||||||||
December 31, | ||||||||||||||
(in thousands) | ||||||||||||||
2015 | $ | 535 | ||||||||||||
2016 | 538 | |||||||||||||
2017 | 538 | |||||||||||||
2018 | 527 | |||||||||||||
2019 | 515 | |||||||||||||
Thereafter | 2,408 | |||||||||||||
Total | $ | 5,061 | ||||||||||||
Schedule of potentially dilutive securities excluded from the calculation of diluted net loss per share as the effect would have been antidilutive | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands) | ||||||||||||||
Convertible preferred stock | — | — | 12,188 | |||||||||||
Convertible promissory notes | — | — | 2,800 | |||||||||||
Options to purchase common stock | 2,827 | 1,794 | 1,305 | |||||||||||
Employee stock purchase plan shares | 25 | — | — | |||||||||||
Total | 2,852 | 1,794 | 16,293 | |||||||||||
Schedule of calculation of diluted loss per shares | ||||||||||||||
Year Ended December 31 | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(in thousands, except | ||||||||||||||
per share data) | ||||||||||||||
Basic | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Deemed contribution | — | 144,765 | — | |||||||||||
Net income (loss) attributable to common stockholders for basic income per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted-average common shares outstanding | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Basic net income (loss) per common share | $ | -0.52 | $ | 34.18 | $ | -118.86 | ||||||||
Diluted: | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) attributable to common stockholders for basic net loss per share | $ | -16,422 | $ | 84,506 | $ | -8,594 | ||||||||
Deemed contribution | — | -144,765 | — | |||||||||||
Net loss attributable to common stockholders for diluted net loss per share | $ | -16,422 | $ | -60,259 | $ | -8,594 | ||||||||
Denominator: | ||||||||||||||
Weighted average number of common shares outstanding used in computing basic net (loss) income per common share | 31,390,631 | 2,472,581 | 72,302 | |||||||||||
Dilutive effect of conversion of convertible preferred stock | — | 13,173,208 | — | |||||||||||
Weighted-average number of common shares outstanding used in computing net loss per common share | 31,390,631 | 15,645,789 | 72,302 | |||||||||||
Diluted net loss per common share | $ | -0.52 | $ | -3.85 | $ | -118.86 | ||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Schedule of property and equipment | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(In thousands) | ||||||||
Computers, software and equipment | $ | 4,270 | $ | 3,514 | ||||
Furniture and fixtures | 97 | 89 | ||||||
Leasehold and tenant improvements | 3,086 | 3,081 | ||||||
7,453 | 6,684 | |||||||
Less accumulated depreciation and amortization | -6,554 | -6,377 | ||||||
$ | 899 | $ | 307 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Reconciliation of the federal statutory income tax rate to our effective income tax rate | |||||||||||
Year Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal statutory income tax rate | $ | -5,583 | $ | -20,488 | $ | -2,922 | |||||
Loss on settlement of notes | — | 18,884 | — | ||||||||
Non-deductible research and development credit | 435 | — | 336 | ||||||||
Stock based compensation | 478 | — | — | ||||||||
Other | 2 | 4 | 12 | ||||||||
Net change in valuation allowance | 4,668 | 1,600 | 2,574 | ||||||||
Net effective tax rate | $ | — | $ | — | $ | — | |||||
Schedule of tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and liabilities | |||||||||||
2014 | 2013 | ||||||||||
Deferred income tax assets | |||||||||||
Net operating loss carryforwards | $ | 47,401 | $ | 58,286 | |||||||
Research credits | 12,789 | 24,276 | |||||||||
Depreciation | 790 | 849 | |||||||||
Stock-based compensation | — | 52 | |||||||||
Accrued compensation | 373 | 137 | |||||||||
Deferred revenue | 1,836 | 3,899 | |||||||||
Gross deferred income tax assets | 63,189 | 87,499 | |||||||||
Valuation allowance | -59,602 | -84,045 | |||||||||
Net deferred income tax assets | 3,587 | 3,454 | |||||||||
Deferred income tax liabilities | |||||||||||
Patent costs | -3,199 | -2,929 | |||||||||
Licensing costs | -317 | -406 | |||||||||
Capitalized legal costs | -71 | -119 | |||||||||
Gross deferred income tax liabilities | -3,587 | -3,454 | |||||||||
Net deferred income tax asset/(liability) | $ | — | $ | — | |||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Schedule of stock options outstanding | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Exercisable options | 1,393,729 | 1,203,885 | 1,094,573 | |||||||||||
Weighted average exercise price per share of exercisable options | $ | 1.01 | $ | 0.59 | $ | 0.59 | ||||||||
Weighted average grant date fair value per share of options granted during the year | $ | 7.39 | $ | 3.78 | $ | 0.34 | ||||||||
Options available for future grants | 2,583,186 | 2,403,368 | 753,692 | |||||||||||
Weighted average remaining contractual life | 6.43 | 5.72 | 7.79 | |||||||||||
Summary of stock option activity | ||||||||||||||
Weighted- | ||||||||||||||
Weighted- | Average | |||||||||||||
Average | Remaining | |||||||||||||
Exercise | Contractual | Aggregate | ||||||||||||
Number of | Price | Term | Intrinsic Value | |||||||||||
Shares | (Per Share)(1) | (in years) | (in thousands)(2) | |||||||||||
Balances at December 31, 2012 | 1,304,848 | $ | 0.59 | 7.79 | ||||||||||
Options granted | 517,062 | 4.29 | ||||||||||||
Options canceled | -5,305 | 0.59 | ||||||||||||
Options exercised(3) | -22,391 | 0.59 | ||||||||||||
Balances at December 31, 2013 | 1,794,214 | 1.66 | 5.72 | $ | 13,429 | |||||||||
Options granted | 1,049,521 | 10.99 | ||||||||||||
Options forfeited | -1,000 | 10.31 | ||||||||||||
Options exercised(3) | -15,941 | 0.59 | ||||||||||||
Balances at December 31, 2014 | 2,826,794 | $ | 5.12 | 6.43 | $ | 30,863 | ||||||||
As of December 31, 2014: | ||||||||||||||
Options vested and expected to vest | 2,531,221 | $ | 4.72 | 6.12 | $ | 28,642 | ||||||||
Exercisable | 1,393,729 | $ | 1.01 | 3.68 | $ | 20,949 | ||||||||
Schedule of stock options outstanding and exercisable by exercise price | ||||||||||||||
Stock Options Outstanding | Stock Options Exercisable | |||||||||||||
Weighted- | ||||||||||||||
Average | ||||||||||||||
Remaining | Weighted- | Weighted- | ||||||||||||
Range of | Contractual | Average | Average | |||||||||||
Exercise | Number of | Term | Exercise Price | Number of | Exercise Price | |||||||||
Prices | Shares | (in years) | Per Share | Shares | Per Share | |||||||||
$0.59 - $4.25 | 1,763,294 | 4.71 | $ | 1.63 | 1,388,779 | $ | 0.99 | |||||||
$4.25 - $8.56 | 55,000 | 9.28 | $ | 7.73 | 4,950 | $ | 5.50 | |||||||
$9.26 – 16.52 | 1,008,500 | 9.28 | $ | 11.1 | — | $ | — | |||||||
2,826,794 | 6.43 | $ | 5.12 | 1,393,729 | $ | 1.01 | ||||||||
Schedule of weighted average assumptions used for estimation of fair value of stock options | ||||||||||||||
Options | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Common stock fair value per share | $ | 8.56 - 16.52 | $ | 5.50 | $ | 0.59 | ||||||||
Expected volatility | 77.4% | 86.7% | 63.7% | |||||||||||
Risk-free interest rate | 1.67% - 1.96% | 0.9% – 2.1% | 2.68% | |||||||||||
Expected dividend yield | — | — | — | |||||||||||
Expected term (in years) | 6.0 | 6.0 | 6.0 | |||||||||||
Schedule of weighted average assumptions used for estimation of fair value of ESPP | ||||||||||||||
ESPP | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Expected term (years) | 0.5 - 2.0 | — | — | |||||||||||
Expected volatility | 70.6% - 71.8% | — | — | |||||||||||
Risk-free interest rate | .06% - .46% | — | — | |||||||||||
Expected dividend yield | — | — | — | |||||||||||
Schedule of total employee, director and non-employee stock-based compensation expense recognized | ||||||||||||||
Years Ended | ||||||||||||||
December 31, | ||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | |||||||||||
General and administrative | $ | 848 | $ | 40 | $ | 19 | ||||||||
Research and development | 1,013 | 158 | 10 | |||||||||||
$ | 1,861 | $ | 198 | $ | 29 | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies | ||||||||
Schedule of future minimum payments under the non-cancelable operating and capital leases | Future minimum payments under the non‑cancelable operating and capital leases consist of the following at December 31, 2014 (in thousands): | |||||||
Capital | ||||||||
Equipment | Operating | |||||||
Years ending December 31, | Lease | Leases | ||||||
2015 | $ | 2 | $ | 398 | ||||
2016 | — | 598 | ||||||
2017 | — | 547 | ||||||
2018 | — | 564 | ||||||
2019 | — | 581 | ||||||
Thereafter | — | 299 | ||||||
Total | $ | 2 | $ | 2,987 | ||||
Condensed_Quarterly_Financial_1
Condensed Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Condensed Quarterly Financial Data (unaudited) | ||||||||||||||||
Schedule of Quarterly Financial Data | ||||||||||||||||
2014 Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
Total revenue | $ | 2,184 | $ | 824 | $ | 848 | $ | 5,664 | ||||||||
Loss from operations | -3,767 | -5,053 | -6,287 | -1,350 | ||||||||||||
Net loss | -3,751 | -5,044 | -6,278 | -1,349 | ||||||||||||
Basic net loss per common share | -0.12 | -0.16 | -0.2 | -0.04 | ||||||||||||
Diluted net loss per common share | $ | -0.12 | $ | -0.16 | $ | -0.2 | $ | -0.04 | ||||||||
2013 Quarter Ended | ||||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
Total revenue | $ | 1,345 | $ | 3,921 | $ | 3,161 | $ | 1,745 | ||||||||
Loss from operations | -3,961 | -1,006 | -1,843 | -3,710 | ||||||||||||
Net loss | -4,612 | -50,109 | -1,835 | -3,703 | ||||||||||||
Basic net loss per common share | -63.78 | 1,341.67 | -57.87 | -0.37 | ||||||||||||
Diluted net loss per common share | $ | -63.78 | $ | -3.88 | $ | -57.87 | $ | -0.37 | ||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Nov. 01, 2013 | Dec. 03, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Jun. 26, 2013 |
Fair value of financial instruments | |||||
Assets recorded at fair value | $0 | ||||
Liabilities recorded at fair value | $0 | ||||
Reverse Stock Split and Conversion of Preferred Stock | |||||
Reverse stock split ratio | 3.1 | ||||
Series A-1 Convertible Preferred Stock | |||||
Reverse Stock Split and Conversion of Preferred Stock | |||||
Conversion of Stock, Shares Converted | 49,671,392 | -49,671,392 | |||
Exchange of Series A-1 and A-2 preferred for common stock (in shares) | 16,022,915 | 5,561,006 | |||
Series A-2 Convertible Preferred Stock | |||||
Reverse Stock Split and Conversion of Preferred Stock | |||||
Conversion of Stock, Shares Converted | 1,851,814 | -1,851,814 | |||
Exchange of Series A-1 and A-2 preferred for common stock (in shares) | 597,359 | 1,851,814 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 23, 2013 | Jun. 26, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | |
segment | |||||||||||||||
item | |||||||||||||||
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share | |||||||||||||||
Anti-dilutive securities (in shares) | 2,852,000 | 1,794,000 | 16,293,000 | ||||||||||||
Deemed dividend (in dollars) | ($3,429,000) | ||||||||||||||
Basic numerator: | |||||||||||||||
Net loss | -1,349,000 | -6,278,000 | -5,044,000 | -3,751,000 | -3,703,000 | -1,835,000 | -50,109,000 | -4,612,000 | -16,422,000 | -60,259,000 | -8,594,000 | ||||
Deemed contribution (distribution) on exchange of preferred stock | 144,765,000 | ||||||||||||||
Net income (loss) attributable to common stockholders for basic net income (loss) per share | -16,422,000 | 84,506,000 | -8,594,000 | ||||||||||||
Denominator: | |||||||||||||||
Weighted average common shares outstanding | 31,390,631 | 2,472,581 | 72,302 | ||||||||||||
Basic net income (loss) per common share (in dollars per share) | ($0.04) | ($0.20) | ($0.16) | ($0.12) | ($0.37) | ($57.87) | $1,341.67 | ($63.78) | ($0.52) | $34.18 | ($118.86) | ||||
Diluted numerator: | |||||||||||||||
Net income (loss) attributable to common stockholders for basic net income (loss) per share | -16,422,000 | 84,506,000 | -8,594,000 | ||||||||||||
Deemed contribution | 144,765,000 | ||||||||||||||
Net loss attributable to common stockholders for diluted net loss per share | -16,422,000 | -60,259,000 | -8,594,000 | ||||||||||||
Denominator | |||||||||||||||
Weighted average common shares outstanding | 31,390,631 | 2,472,581 | 72,302 | ||||||||||||
Dilutive effect of conversion of convertible preferred stock | 13,173,208 | ||||||||||||||
Weighted Average Number of Shares Outstanding, Diluted | 31,390,631 | 15,645,789 | 72,302 | ||||||||||||
Diluted net loss per common share | ($0.04) | ($0.20) | ($0.16) | ($0.12) | ($0.37) | ($57.87) | ($3.88) | ($63.78) | ($0.52) | ($3.85) | ($118.86) | ||||
Segment Reporting [Abstract] | |||||||||||||||
Number of Operating Segments | 1 | ||||||||||||||
Stock-Based Compensation | |||||||||||||||
Stock-based compensation expense | 1,861,000 | 198,000 | 29,000 | ||||||||||||
Deferred Revenue | |||||||||||||||
Deferred revenue | 4,600,000 | 9,700,000 | |||||||||||||
Number of primary technology groups | 4 | ||||||||||||||
Convertible preferred stock | |||||||||||||||
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share | |||||||||||||||
Anti-dilutive securities (in shares) | 12,188,000 | ||||||||||||||
Convertible Promissory Notes | |||||||||||||||
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share | |||||||||||||||
Anti-dilutive securities (in shares) | 2,800,000 | ||||||||||||||
Employee stock options | |||||||||||||||
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share | |||||||||||||||
Anti-dilutive securities (in shares) | 2,827,000 | 1,794,000 | 1,305,000 | ||||||||||||
Employee Stock Purchase Plan | |||||||||||||||
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share | |||||||||||||||
Anti-dilutive securities (in shares) | 25,000 | ||||||||||||||
Stock-Based Compensation | |||||||||||||||
Stock-based compensation expense | 172,000 | ||||||||||||||
Series A-1 Convertible Preferred Stock | |||||||||||||||
Outstanding potentially dilutive securities have been excluded from the computations of diluted net loss per common share | |||||||||||||||
Deemed dividend (in dollars) | 2,300,000 | 1,000,000 | 1,000,000 | ||||||||||||
Deemed contribution | 2,300,000 | ||||||||||||||
Diluted numerator: | |||||||||||||||
Deemed contribution | $148,100,000 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Research and Development Expense [Abstract] | |||
Research and Development Expense | $18,516,000 | $17,000,000 | $12,668,000 |
Concentrations of Risk | |||
Amounts on deposit in excess of federally insured limits approximately | $54,000,000 | $77,500,000 | |
Payables | Service providers | |||
Concentrations of risk | |||
Number of service providers | 1 | 5 | |
Concentration risk percentage | 47.00% | 57.00% |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | |||
Patents, licenses, and other intangible assets | |||
Number of primary criteria to determine capitalization of patent | 3 | ||
Total gross carrying amount | $11,571,000 | $10,635,000 | |
Total intangible assets, net | 9,116,000 | 8,814,000 | |
Amortization expense for patents, licenses, and other intangible assets | 694,000 | 598,000 | 373,000 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2015 | 535,000 | ||
2016 | 538,000 | ||
2017 | 538,000 | ||
2018 | 527,000 | ||
2019 | 515,000 | ||
Thereafter | 2,408,000 | ||
Total | 5,061,000 | ||
Nonamortizable intangible assets (trademarks) | |||
Patents, licenses, and other intangible assets | |||
Nonamortizable intangible assets (trademarks) | 400,000 | 369,000 | |
Acquired licenses | Minimum | |||
Patents, licenses, and other intangible assets | |||
Estimated economic life | 5 years | ||
Acquired licenses | Maximum | |||
Patents, licenses, and other intangible assets | |||
Estimated economic life | 25 years | ||
Patents | |||
Patents, licenses, and other intangible assets | |||
Accumulated amortization | -1,776,000 | -1,395,000 | |
Patents | Minimum | |||
Patents, licenses, and other intangible assets | |||
Estimated economic life | 13 years | ||
Patents | Maximum | |||
Patents, licenses, and other intangible assets | |||
Estimated economic life | 20 years | ||
Patents, definite life | |||
Patents, licenses, and other intangible assets | |||
Amortizable intangible assets | 5,720,000 | 4,834,000 | |
Patents, pending issuance | |||
Patents, licenses, and other intangible assets | |||
Amortizable intangible assets | 3,654,000 | 3,515,000 | |
Licenses and other amortizable intangible assets | |||
Patents, licenses, and other intangible assets | |||
Amortizable intangible assets | 1,797,000 | 1,917,000 | |
Accumulated amortization | -679,000 | -426,000 | |
Capitalized patent and licensing | |||
Patents, licenses, and other intangible assets | |||
Impairment of Intangible Assets (Excluding Goodwill) | 509,000 | 205,000 | 388,000 |
In Process Intangible Assets [Member] | |||
Patents, licenses, and other intangible assets | |||
Total gross carrying amount | $3,700,000 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) | 12 Months Ended |
Dec. 31, 2014 | |
Computers, software and equipment | Minimum | |
Property and Equipment | |
Estimated useful lives of the assets | 3 years |
Computers, software and equipment | Maximum | |
Property and Equipment | |
Estimated useful lives of the assets | 5 years |
Furniture and fixtures | Minimum | |
Property and Equipment | |
Estimated useful lives of the assets | 5 years |
Furniture and fixtures | Maximum | |
Property and Equipment | |
Estimated useful lives of the assets | 7 years |
Leasehold improvements | Minimum | |
Property and Equipment | |
Estimated useful lives of the assets | 5 years |
Leasehold improvements | Maximum | |
Property and Equipment | |
Estimated useful lives of the assets | 7 years |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2014 | Dec. 31, 2014 | |
Revenue recognition | |||||||||||||
Total | $963,300,000 | $963,300,000 | $963,300,000 | ||||||||||
Revenue recognized | 5,664,000 | 848,000 | 824,000 | 2,184,000 | 1,745,000 | 3,161,000 | 3,921,000 | 1,345,000 | 9,520,000 | 10,172,000 | 9,524,000 | ||
Accounts receivable | 2,966,000 | 59,000 | 2,966,000 | 59,000 | 2,966,000 | ||||||||
Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 181,800,000 | 181,800,000 | 181,800,000 | ||||||||||
Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 426,000,000 | 426,000,000 | 426,000,000 | ||||||||||
Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 355,500,000 | 355,500,000 | 355,500,000 | ||||||||||
UNITED STATES | |||||||||||||
Revenue recognition | |||||||||||||
Revenue recognized | 8,600,000 | 4,200,000 | 4,400,000 | ||||||||||
Non United States [Member] | |||||||||||||
Revenue recognition | |||||||||||||
Revenue recognized | 900,000 | 6,000,000 | 5,100,000 | ||||||||||
Amgen, Inc. | |||||||||||||
Revenue recognition | |||||||||||||
Revenue recognized | 6,900,000 | 2,200,000 | 1,800,000 | 5,200,000 | |||||||||
MorphoSys | |||||||||||||
Revenue recognition | |||||||||||||
Total | 299,000,000 | 299,000,000 | 299,000,000 | ||||||||||
Revenue recognized | 0 | 3,000,000 | 2,000,000 | ||||||||||
Accounts receivable | 100,000 | 100,000 | |||||||||||
MorphoSys | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 62,000,000 | 62,000,000 | 62,000,000 | ||||||||||
MorphoSys | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 187,000,000 | 187,000,000 | 187,000,000 | ||||||||||
MorphoSys | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||
Alexion Pharmaceuticals, Inc. | |||||||||||||
Revenue recognition | |||||||||||||
Total | 399,000,000 | 399,000,000 | 399,000,000 | ||||||||||
Alexion Pharmaceuticals, Inc. | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 51,000,000 | 51,000,000 | 51,000,000 | ||||||||||
Alexion Pharmaceuticals, Inc. | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 168,000,000 | 168,000,000 | 168,000,000 | ||||||||||
Alexion Pharmaceuticals, Inc. | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 180,000,000 | 180,000,000 | 180,000,000 | ||||||||||
BI | |||||||||||||
Revenue recognition | |||||||||||||
Total | 27,000,000 | 27,000,000 | 27,000,000 | ||||||||||
BI | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 9,000,000 | 9,000,000 | 9,000,000 | ||||||||||
BI | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||
BI | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 12,000,000 | 12,000,000 | 12,000,000 | ||||||||||
Merck Sharp & Dohme Corp. | |||||||||||||
Revenue recognition | |||||||||||||
Total | 9,500,000 | 9,500,000 | 9,500,000 | ||||||||||
Revenue recognized | 500,000 | 600,000 | 1,000,000 | ||||||||||
Merck Sharp & Dohme Corp. | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 3,500,000 | 3,500,000 | 3,500,000 | ||||||||||
Merck Sharp & Dohme Corp. | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||
Novo Nordisk | |||||||||||||
Revenue recognition | |||||||||||||
Total | 167,300,000 | 167,300,000 | 167,300,000 | ||||||||||
Revenue recognized | 100,000 | ||||||||||||
Accounts receivable | 3,000,000 | 3,000,000 | 3,000,000 | ||||||||||
Novo Nordisk | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 36,300,000 | 36,300,000 | 36,300,000 | ||||||||||
Novo Nordisk | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 51,000,000 | 51,000,000 | 51,000,000 | ||||||||||
Novo Nordisk | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 80,000,000 | 80,000,000 | 80,000,000 | ||||||||||
Janssen | |||||||||||||
Revenue recognition | |||||||||||||
Total | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Revenue recognized | 0 | 0 | 1,400,000 | ||||||||||
Janssen | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||
Janssen | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||
2009 Research License and Commercialization Agreement | CSL Limited | |||||||||||||
Revenue recognition | |||||||||||||
Total | 15,000,000 | 15,000,000 | 15,000,000 | ||||||||||
Revenue recognized | 1,800,000 | ||||||||||||
2009 Research License and Commercialization Agreement | CSL Limited | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||
2009 Research License and Commercialization Agreement | CSL Limited | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||
2009 Research License and Commercialization Agreement | CSL Limited | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||
May 2013 Research License and Commercialization Agreement | CSL Limited | |||||||||||||
Revenue recognition | |||||||||||||
Total | 36,500,000 | 36,500,000 | 36,500,000 | ||||||||||
Revenue recognized | 700,000 | 2,400,000 | 1,800,000 | ||||||||||
May 2013 Research License and Commercialization Agreement | CSL Limited | Development-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 8,000,000 | 8,000,000 | 8,000,000 | ||||||||||
May 2013 Research License and Commercialization Agreement | CSL Limited | Regulatory-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||
May 2013 Research License and Commercialization Agreement | CSL Limited | Sales-based | |||||||||||||
Revenue recognition | |||||||||||||
Total | $24,500,000 | $24,500,000 | $24,500,000 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 7) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 2 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Jun. 30, 2010 | 31-May-13 | Oct. 31, 2014 | Jan. 31, 2013 | Dec. 31, 2010 | Jul. 31, 2013 | Dec. 31, 2009 | Mar. 31, 2013 | Dec. 31, 2007 | 31-May-13 | |
item | item | item | item | item | ||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | $963,300,000 | $963,300,000 | $963,300,000 | |||||||||||||||||||
Revenue recognized | 5,664,000 | 848,000 | 824,000 | 2,184,000 | 1,745,000 | 3,161,000 | 3,921,000 | 1,345,000 | 9,520,000 | 10,172,000 | 9,524,000 | |||||||||||
Current portion of deferred revenue | 2,254,000 | 3,444,000 | 2,254,000 | 3,444,000 | 2,254,000 | |||||||||||||||||
Term of adavnce notice period | 90 days | |||||||||||||||||||||
Novo Nordisk | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 2,500,000 | |||||||||||||||||||||
Research funding | 1,600,000 | |||||||||||||||||||||
Milestone payment received | 2,000,000 | |||||||||||||||||||||
Potential milestone payment | 167,300,000 | 167,300,000 | 167,300,000 | |||||||||||||||||||
Revenue recognized | 100,000 | |||||||||||||||||||||
Deferred revenue | 2,900,000 | 2,900,000 | 2,900,000 | |||||||||||||||||||
Research license term | 2 years | |||||||||||||||||||||
Additional research term | 12 months | |||||||||||||||||||||
MorphoSys | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 13,000,000 | |||||||||||||||||||||
Milestone payment received | 3,000,000 | |||||||||||||||||||||
Potential milestone payment | 299,000,000 | 299,000,000 | 299,000,000 | |||||||||||||||||||
Revenue from additional services provided | 400,000 | |||||||||||||||||||||
Revenue recognized | 0 | 3,000,000 | 2,000,000 | |||||||||||||||||||
Deferred revenue | 0 | 0 | 0 | |||||||||||||||||||
Number of clinical trials initiated | 2 | |||||||||||||||||||||
Amgen, Inc. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 11,000,000 | |||||||||||||||||||||
Milestone payment received | 2,000,000 | |||||||||||||||||||||
Revenue recognized | 6,900,000 | 2,200,000 | 1,800,000 | 5,200,000 | ||||||||||||||||||
Deferred revenue | 0 | 0 | 0 | |||||||||||||||||||
Estimated term of service period of research and development services | 72 months | |||||||||||||||||||||
Option term after delivery of the data from a Phase 2 proof-of-concept (POC) clinical trial | 90 days | |||||||||||||||||||||
Merck Sharp & Dohme Corp. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 1,000,000 | |||||||||||||||||||||
Annual maintenance fees | 500,000 | |||||||||||||||||||||
Potential milestone payment | 9,500,000 | 9,500,000 | 9,500,000 | |||||||||||||||||||
Revenue recognized | 500,000 | 600,000 | 1,000,000 | |||||||||||||||||||
Deferred revenue | 100,000 | 100,000 | 100,000 | |||||||||||||||||||
Number of compounds | 1 | |||||||||||||||||||||
Alexion Pharmaceuticals, Inc. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 399,000,000 | 399,000,000 | 399,000,000 | |||||||||||||||||||
Termination period if the breach remains uncured | 60 days | |||||||||||||||||||||
Termination period in case of non payment breach | 30 days | |||||||||||||||||||||
Janssen | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 1,000,000 | |||||||||||||||||||||
Potential milestone payment | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||||||||||
Revenue recognized | 0 | 0 | 1,400,000 | |||||||||||||||||||
Deferred revenue | 0 | 0 | 0 | |||||||||||||||||||
Research license revenue | 900,000 | |||||||||||||||||||||
Revenue from exercise of commercial option | 500,000 | |||||||||||||||||||||
Research license term | 2 years | |||||||||||||||||||||
Number of compounds | 3 | |||||||||||||||||||||
CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Number of compounds | 1 | |||||||||||||||||||||
Boehringer Ingelheim International GmbH [Member] | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Milestone payment received | 1,200,000 | |||||||||||||||||||||
Revenue recognized | 0 | 0 | ||||||||||||||||||||
Research license term | 3 years | |||||||||||||||||||||
Number of commercial options | 1 | |||||||||||||||||||||
Number of compounds | 2 | |||||||||||||||||||||
MedImmune L L C [Member] | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Research license revenue | 750,000 | |||||||||||||||||||||
Fair value of license and options | 750,000 | |||||||||||||||||||||
Interest held (as a percent) | 5.00% | |||||||||||||||||||||
License Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 500,000 | |||||||||||||||||||||
Revenue recognized | 0 | 500,000 | ||||||||||||||||||||
Deferred revenue | 0 | 0 | 0 | |||||||||||||||||||
Option and license agreement | Alexion Pharmaceuticals, Inc. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 3,000,000 | |||||||||||||||||||||
Annual maintenance fees | 500,000 | |||||||||||||||||||||
Revenue recognized | 1,000,000 | 900,000 | ||||||||||||||||||||
Deferred revenue | 1,600,000 | 1,600,000 | 1,600,000 | |||||||||||||||||||
Research license term | 5 years | |||||||||||||||||||||
Additional research term | 3 years | |||||||||||||||||||||
Extension fee | 2,000,000 | |||||||||||||||||||||
Annual maintenance fees payable during any extension of research term | 1,000,000 | |||||||||||||||||||||
Option fee | 4,000,000 | |||||||||||||||||||||
Number of different target programs | 6 | |||||||||||||||||||||
Milestone payment to be received for first product upon achievement of certain development, regulatory and commercial milestones | 66,500,000 | |||||||||||||||||||||
2009 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Nonrefundable upfront payment | 750,000 | |||||||||||||||||||||
Milestone payment received | 1,500,000 | |||||||||||||||||||||
Potential milestone payment | 15,000,000 | 15,000,000 | 15,000,000 | |||||||||||||||||||
Revenue recognized | 1,800,000 | |||||||||||||||||||||
Research license revenue | 300,000 | |||||||||||||||||||||
Research license term | 5 years | |||||||||||||||||||||
Number of technologies to which research license is provided | 1 | |||||||||||||||||||||
Number of commercial options | 5 | |||||||||||||||||||||
May 2013 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Milestone payment received | 2,500,000 | |||||||||||||||||||||
Potential milestone payment | 36,500,000 | 36,500,000 | 36,500,000 | |||||||||||||||||||
Revenue recognized | 700,000 | 2,400,000 | 1,800,000 | |||||||||||||||||||
Deferred revenue | 0 | 0 | 0 | |||||||||||||||||||
Development-based | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 181,800,000 | 181,800,000 | 181,800,000 | |||||||||||||||||||
Development-based | Novo Nordisk | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 36,300,000 | 36,300,000 | 36,300,000 | |||||||||||||||||||
Development-based | MorphoSys | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 62,000,000 | 62,000,000 | 62,000,000 | |||||||||||||||||||
Development-based | Merck Sharp & Dohme Corp. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 3,500,000 | 3,500,000 | 3,500,000 | |||||||||||||||||||
Development-based | Alexion Pharmaceuticals, Inc. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 51,000,000 | 51,000,000 | 51,000,000 | |||||||||||||||||||
Development-based | Janssen | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 6,000,000 | 6,000,000 | 6,000,000 | |||||||||||||||||||
Development-based | 2009 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 6,000,000 | 6,000,000 | 6,000,000 | |||||||||||||||||||
Development-based | May 2013 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 8,000,000 | 8,000,000 | 8,000,000 | |||||||||||||||||||
Regulatory-based | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 426,000,000 | 426,000,000 | 426,000,000 | |||||||||||||||||||
Regulatory-based | Novo Nordisk | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 51,000,000 | 51,000,000 | 51,000,000 | |||||||||||||||||||
Regulatory-based | MorphoSys | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 187,000,000 | 187,000,000 | 187,000,000 | |||||||||||||||||||
Regulatory-based | Merck Sharp & Dohme Corp. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 6,000,000 | 6,000,000 | 6,000,000 | |||||||||||||||||||
Regulatory-based | Alexion Pharmaceuticals, Inc. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 168,000,000 | 168,000,000 | 168,000,000 | |||||||||||||||||||
Regulatory-based | 2009 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 4,000,000 | 4,000,000 | 4,000,000 | |||||||||||||||||||
Regulatory-based | May 2013 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 4,000,000 | 4,000,000 | 4,000,000 | |||||||||||||||||||
Sales-based | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 355,500,000 | 355,500,000 | 355,500,000 | |||||||||||||||||||
Sales-based | Novo Nordisk | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 80,000,000 | 80,000,000 | 80,000,000 | |||||||||||||||||||
Sales-based | MorphoSys | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||||||
Sales-based | Alexion Pharmaceuticals, Inc. | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 180,000,000 | 180,000,000 | 180,000,000 | |||||||||||||||||||
Sales-based | Janssen | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 4,000,000 | 4,000,000 | 4,000,000 | |||||||||||||||||||
Sales-based | 2009 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||||||||
Sales-based | May 2013 Research License and Commercialization Agreement | CSL Limited | ||||||||||||||||||||||
Collaboration research and licensing agreements | ||||||||||||||||||||||
Potential milestone payment | $24,500,000 | $24,500,000 | $24,500,000 |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2009 | Dec. 31, 2010 | Jun. 30, 2011 | Dec. 31, 2011 |
the 2009 Notes | ||||
Amount of debt issued | $7.70 | |||
Interest rate (as a percent) | 10.00% | 12.50% | ||
the 2010 Notes | ||||
Amount of debt issued | $7.50 | |||
Interest rate (as a percent) | 10.00% | 12.50% |
Capital_Structure_Details
Capital Structure (Details) | Dec. 31, 2014 | Dec. 31, 2013 |
Capital Structure | ||
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property and equipment | |||
Property and equipment, gross | $7,453,000 | $6,684,000 | |
Less accumulated depreciation and amortization | -6,554,000 | -6,377,000 | |
Property, Plant and Equipment, Net | 899,000 | 307,000 | |
Depreciation expense | 188,000 | 113,000 | 154,000 |
Computers, software and equipment | |||
Property and equipment | |||
Property and equipment, gross | 4,270,000 | 3,514,000 | |
Furniture and fixtures | |||
Property and equipment | |||
Property and equipment, gross | 97,000 | 89,000 | |
Leasehold and tenant improvements | |||
Property and equipment | |||
Property and equipment, gross | 3,086,000 | 3,081,000 | |
Capital lease | |||
Property and equipment | |||
Property and equipment, gross | 22,000 | 22,000 | |
Less accumulated depreciation and amortization | -20,000 | -12,900 | |
Capital lease entered for computer equipment | $22,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of federal statutory income tax rate to effective income tax rate | |||
Federal statutory income tax rate | ($5,583,000) | ($20,488,000) | ($2,922,000) |
Loss on settlement of notes | 18,884,000 | ||
Non-deductible research and development credit | 435,000 | 336,000 | |
Stock based compensation | 478,000 | ||
Other | 2,000 | 4,000 | 12,000 |
Net change in valuation allowance | 4,668,000 | 1,600,000 | 2,574,000 |
Net effective tax rate | |||
Deferred income tax assets | |||
Net operating loss carryforwards | 47,401,000 | 58,286,000 | |
Research credits | 12,789,000 | 24,276,000 | |
Depreciation | 790,000 | 849,000 | |
Stock-based compensation | 52,000 | ||
Accrued compensation | 373,000 | 137,000 | |
Deferred revenue | 1,836,000 | 3,899,000 | |
Gross deferred income tax assets | 63,189,000 | 87,499,000 | |
Valuation allowance | -59,602,000 | -84,045,000 | |
Net deferred income tax assets | 3,587,000 | 3,454,000 | |
Deferred income tax liabilities | |||
Patent costs | -3,199,000 | -2,929,000 | |
Licensing costs | -317,000 | -406,000 | |
Capitalized legal costs | -71,000 | -119,000 | |
Gross deferred income tax liabilities | -3,587,000 | -3,454,000 | |
Net deferred income tax asset/(liability) | |||
Increase (decrease) in deferred tax asset valuation allowance | $3,000,000 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Federal | |
Income Taxes [Line Items] | |
Cumulative net operating loss carryforwards | $169.20 |
Tax credit carryforwards | 15.2 |
State | |
Income Taxes [Line Items] | |
Cumulative net operating loss carryforwards | $134.20 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 13 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2014 | Dec. 31, 2014 | Dec. 02, 2013 | |
item | ||||||
Stock options | ||||||
Stock-based compensation | ||||||
Total number of shares of common stock available for issuance | 2,583,186 | 2,403,368 | 753,692 | 2,583,186 | ||
Information with respect to stock options outstanding | ||||||
Exercisable options (in shares) | 1,393,729 | 1,203,885 | 1,094,573 | 1,393,729 | ||
Weighted-average exercise price per share of exercisable options (in dollars per share) | $1.01 | $0.59 | $0.59 | 1.01 | ||
Weighted average grant date fair value per share of options granted during the year (in dollars per share) | $7.39 | $3.78 | $0.34 | |||
Weighted-average remaining contractual life | 6 years 5 months 5 days | 5 years 8 months 19 days | 7 years 9 months 15 days | |||
The 2010 Plan | ||||||
Stock-based compensation | ||||||
Total number of shares of common stock available for issuance | 0 | 0 | ||||
The 2013 Plan | ||||||
Stock-based compensation | ||||||
Total number of shares of common stock available for issuance | 5,409,980 | 5,409,980 | ||||
Annual percentage increase in shares of common stock available for issuance | 4.00% | |||||
Increase in shares of common stock available for issuance (in shares) | 1,254,179 | |||||
Prior Plans | ||||||
Stock-based compensation | ||||||
Total number of shares of common stock available for issuance | 2 | |||||
Employee Stock Purchase Plan | ||||||
Stock-based compensation | ||||||
Total number of shares of common stock available for issuance | 581,286 | 581,286 | ||||
Initial term of plan | 2 years | |||||
Number of six month purchase periods | 4 | 4 | ||||
Purchase period | 6 months | |||||
Increase in shares of common stock available for issuance (in shares) | 313,545 | |||||
Awards issued under the plan (in shares) | 63,864 | |||||
Employee Stock Purchase Plan | Minimum | ||||||
Stock-based compensation | ||||||
Percentage of compensation that employees may withhold to purchase stock at a discount | 1.00% | 1.00% | ||||
Employee Stock Purchase Plan | Maximum | ||||||
Stock-based compensation | ||||||
Percentage of compensation that employees may withhold to purchase stock at a discount | 15.00% | 15.00% | ||||
Purchase price as percentage of stock price at the initial offering date | 85.00% | |||||
Purchase price as percentage of stock price at the purchase date | 85.00% | |||||
Annual percentage increase in shares of common stock available for issuance | 1.00% | |||||
Annual increase in shares of common stock available for issuance (in shares) | 621,814 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (Stock options, USD $) | 12 Months Ended | 13 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | |
Stock option activity, Number of Shares | ||||
Balance at the beginning of the period (in shares) | 1,794,214 | 1,304,848 | ||
Options granted (in shares) | 1,049,521 | 517,062 | ||
Options canceled (in shares) | -5,305 | |||
Options forfeited (in shares) | -1,000 | |||
Options exercised (in shares) | -15,941 | -22,391 | 0 | |
Balance at the end of the period (in shares) | 2,826,794 | 1,794,214 | 1,304,848 | 2,826,794 |
Options vested and expected to vest (in shares) | 2,531,221 | 2,531,221 | ||
Exercisable (in shares) | 1,393,729 | 1,203,885 | 1,094,573 | 1,393,729 |
Weighted Average Exercise Price (Per Share) | ||||
Balance at the beginning of the period (in dollars per share) | $1.66 | $0.59 | ||
Options granted (in dollars per share) | $10.99 | $4.29 | ||
Options canceled (in dollars per share) | $0.59 | |||
Options forfeited (in dollars per share) | $10.31 | |||
Options exercised (in dollars per share) | $0.59 | $0.59 | ||
Balance at the end of the period (in dollars per share) | $5.12 | $1.66 | $0.59 | 5.12 |
Options vested and expected to vest (in dollars per share) | $4.72 | 4.72 | ||
Exercisable (in dollars per share) | $1.01 | $0.59 | $0.59 | 1.01 |
Additional information | ||||
Weighted-Average Remaining Contractual Term, Balance outstanding | 6 years 5 months 5 days | 5 years 8 months 19 days | 7 years 9 months 15 days | |
Weighted-Average Remaining Contractual Term, Options vested and expected to vest | 6 years 1 month 13 days | |||
Weighted-Average Remaining Contractual Term, Exercisable | 3 years 8 months 5 days | |||
Aggregate Intrinsic Value, Balance outstanding | $30,863,000 | $13,429,000 | 30,863,000 | |
Aggregate Intrinsic Value, Options vested and expected to vest | 28,642,000 | 28,642,000 | ||
Aggregate Intrinsic Value, Exercisable | 20,949,000 | 20,949,000 | ||
Intrinsic value of options exercised | $155,000 | $191,000 | ||
The 2013 Plan | ||||
Stock option activity, Number of Shares | ||||
Options granted (in shares) | 1,063,500 |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Stock options outstanding and exercisable by exercise price | |
Stock Options Outstanding, Number of Shares | 2,826,794 |
Stock Options Outstanding, Remaining Contractual Term | 6 years 5 months 5 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $5.12 |
Stock Options Exercisable, Number of Shares | 1,393,729 |
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $1.01 |
$0.59 - $4.25 | |
Stock options outstanding and exercisable by exercise price | |
Range of Exercise Prices, lower limit (in dollars per share) | $0.59 |
Range of Exercise Prices, upper limit (in dollars per share) | $4.25 |
Stock Options Outstanding, Number of Shares | 1,763,294 |
Stock Options Outstanding, Remaining Contractual Term | 4 years 8 months 16 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $1.63 |
Stock Options Exercisable, Number of Shares | 1,388,779 |
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $0.99 |
$4.25 - $8.56 | |
Stock options outstanding and exercisable by exercise price | |
Range of Exercise Prices, lower limit (in dollars per share) | $4.25 |
Range of Exercise Prices, upper limit (in dollars per share) | $8.56 |
Stock Options Outstanding, Number of Shares | 55,000 |
Stock Options Outstanding, Remaining Contractual Term | 9 years 3 months 11 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $7.73 |
Stock Options Exercisable, Number of Shares | 4,950 |
Stock Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $5.50 |
$9.26 b 16.52 | |
Stock options outstanding and exercisable by exercise price | |
Range of Exercise Prices, lower limit (in dollars per share) | $9.26 |
Range of Exercise Prices, upper limit (in dollars per share) | $16.52 |
Stock Options Outstanding, Number of Shares | 1,008,500 |
Stock Options Outstanding, Remaining Contractual Term | 9 years 3 months 11 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $11.10 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 4) (USD $) | 11 Months Ended | 12 Months Ended | ||
Dec. 02, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Compensation expense | ||||
Total employee, director and non-employee stock-based compensation expense | $1,861,000 | $198,000 | $29,000 | |
Employee Stock Purchase Plan | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected volatility, low end of range (as a percent) | 70.60% | |||
Expected volatility, high end of range (as a percent) | 71.80% | |||
Risk-free interest rate, low end of range (as a percent) | 0.06% | |||
Risk-free interest rate, high end of range (as a percent) | 0.46% | |||
Compensation expense | ||||
Unamortized compensation expense related to unvested options | 204,000 | |||
Employee Stock Purchase Plan | Minimum | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected term (years) | 6 months | |||
Employee Stock Purchase Plan | Maximum | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Expected term (years) | 2 years | |||
Employee stock options | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Common stock fair value per share (in dollars per share) | $4.25 | $5.50 | $0.59 | |
Expected volatility (as a percent) | 77.40% | 86.70% | 63.70% | |
Risk-free interest rate, low end of range (as a percent) | 1.67% | 0.90% | ||
Risk-free interest rate, high end of range (as a percent) | 1.96% | 2.10% | ||
Risk-free interest rate (as a percent) | 2.68% | |||
Expected term (years) | 6 years | 6 years | 6 years | |
Compensation expense | ||||
Unamortized compensation expense related to unvested options | 7,600,000 | 895,000 | 26,000 | |
Period to recognize unamortized compensation expense | 3 years 6 months 26 days | |||
Employee stock options | Maximum | ||||
Weighted average assumptions for estimated fair value of employee stock options | ||||
Common stock fair value per share (in dollars per share) | $16.52 | |||
General and administrative | ||||
Compensation expense | ||||
Total employee, director and non-employee stock-based compensation expense | 848,000 | 40,000 | 19,000 | |
Research and development | ||||
Compensation expense | ||||
Total employee, director and non-employee stock-based compensation expense | $1,013,000 | $158,000 | $10,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2009 | 31-May-14 | |
Capital lease term | 3 years | |||
Capital Equipment Lease | ||||
2015 | $2,000 | |||
Total | 2,000 | |||
Operating Leases | ||||
2015 | 398,000 | |||
2016 | 598,000 | |||
2017 | 547,000 | |||
2018 | 564,000 | |||
2019 | 581,000 | |||
Thereafter | 299,000 | |||
Total | 2,987,000 | |||
Net rent expense | 597,000 | 547,000 | ||
Office Space | ||||
Capital lease term | 26 months | |||
Operating Leases | ||||
Net rent expense | $200,000 |
401k_Plan_Details
401(k) Plan (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
401(k) Plan | |||
Employer contributions | $0 | $0 | $0 |
Related_Parties_Details
Related Parties (Details) (USD $) | 0 Months Ended |
Sep. 04, 2013 | |
Related Parties | |
Waiver of debt availed by CEO | $166,000 |
Convertible_Promissory_Notes_a1
Convertible Promissory Notes and Conversion of Convertible Preferred Stock (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Conversion of Convertible Promissory Notes and Preferred Stock | |
Proceeds from the sale of Series A-1 preferred | $10,000 |
Convertible_Promissory_Notes_a2
Convertible Promissory Notes and Conversion of Convertible Preferred Stock (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Dec. 31, 2013 | Jun. 13, 2013 | Jun. 26, 2013 | Dec. 03, 2013 | Sep. 23, 2013 | Jun. 30, 2013 | Dec. 02, 2013 | |
Convertible Promissory Notes | |||||||
Loss on extinguishment of debt (in dollars) | ($48,556,000) | ||||||
Deemed contribution (distribution) on exchange of preferred stock | 144,765,000 | ||||||
Reduction in deemed contribution due to issuance cost | 116,000 | ||||||
Fair value of stock converted (in dollars) | 79,601,000 | ||||||
Share Price | $5.50 | ||||||
Aggregate purchase price of convertible preferred stock (in dollars) | 10,000,000 | ||||||
Deemed dividend (in dollars) | -3,429,000 | ||||||
Note Conversion Agreement | |||||||
Convertible Promissory Notes | |||||||
Associated transaction costs (in dollars) | 41,000 | ||||||
Series AE Converted To Series A-1 Preferred Shares | |||||||
Convertible Promissory Notes | |||||||
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock | 257,409 | ||||||
Deemed contribution (distribution) on exchange of preferred stock | 140,600,000 | ||||||
Reduction in deemed contribution due to issuance cost | 3,000,000 | ||||||
Series A1 Converted To Series A2 Preferred Shares | |||||||
Convertible Promissory Notes | |||||||
Deemed contribution (distribution) on exchange of preferred stock | 7,500,000 | ||||||
Series A-1 Convertible Preferred Stock | |||||||
Convertible Promissory Notes | |||||||
Number of shares issued on conversion of notes | 45,902,321 | ||||||
Number of preferred stock converted (in shares) | -49,671,392 | 49,671,392 | |||||
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock | 5,561,006 | 16,022,915 | |||||
Associated transaction costs (in dollars) | 40,000 | 34,000 | |||||
Fair value of stock issued (in dollars) | 4,700,000 | ||||||
Fair value of stock converted (in dollars) | 8,600,000 | ||||||
Convertible preferred stock issued (in shares) | 7,352,940 | 5,586,510 | 1,766,430 | ||||
Share Price | $1.36 | $1.36 | |||||
Aggregate purchase price of convertible preferred stock (in dollars) | 7,600,000 | 2,400,000 | |||||
Deemed dividend (in dollars) | 1,000,000 | 2,300,000 | 1,000,000 | ||||
Fair value of convertible preferred stock (in dollars per share) | $1.54 | $2.69 | |||||
Series A-1 Convertible Preferred Stock | Note Conversion Agreement | |||||||
Convertible Promissory Notes | |||||||
Number of shares issued on conversion of notes | 45,902,321 | ||||||
Number of preferred stock converted (in shares) | 5,303,597 | ||||||
Fair value of stock issued (in dollars) | 70,700,000 | ||||||
Share Price | $1.54 | ||||||
Series A-1 Convertible Preferred Stock | Series AE Converted To Series A-1 Preferred Shares | |||||||
Convertible Promissory Notes | |||||||
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock | 1,977,137 | ||||||
Fair value of stock issued (in dollars) | 3,000,000 | ||||||
Series A-2 Convertible Preferred Stock | |||||||
Convertible Promissory Notes | |||||||
Number of preferred stock converted (in shares) | -1,851,814 | 1,851,814 | |||||
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock | 1,851,814 | 597,359 | |||||
Fair value of stock issued (in dollars) | $1,100,000 | ||||||
Fair value of convertible preferred stock (in dollars per share) | $0.58 | ||||||
Series A-2 Convertible Preferred Stock | Note Conversion Agreement | |||||||
Convertible Promissory Notes | |||||||
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock | 1,766,097 | ||||||
Series A-2 Convertible Preferred Stock | Series A1 Converted To Series A2 Preferred Shares | |||||||
Convertible Promissory Notes | |||||||
Exchange of Series A-E/A-1 for A-1/A-2 Preferred stock | 85,717 |
Initial_Public_Offering_Detail
Initial Public Offering (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
Dec. 02, 2013 | Dec. 31, 2013 | Dec. 02, 2013 | |
Initial Public Offering | |||
Common stock sold under initial public offering (in shares) | 14,639,500 | ||
IPO price (in dollars per share) | $5.50 | ||
Proceeds from Issuance of Common Stock | $80,517,000 | ||
Net proceeds received from initial public offering | $72,500,000 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2015 | |
Subsequent Event [Line Items] | |||
Payments under lease agreement | $597,000 | $547,000 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Additional renewal period | 5 years | ||
Payments under lease agreement | $2,800,000 |
Condensed_Quarterly_Financial_2
Condensed Quarterly Financial Data (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Quarterly Financial Data (unaudited) | |||||||||||
Total revenue | $5,664 | $848 | $824 | $2,184 | $1,745 | $3,161 | $3,921 | $1,345 | $9,520 | $10,172 | $9,524 |
Loss from operations | -1,350 | -6,287 | -5,053 | -3,767 | -3,710 | -1,843 | -1,006 | -3,961 | -16,457 | -10,520 | -6,230 |
Net loss | ($1,349) | ($6,278) | ($5,044) | ($3,751) | ($3,703) | ($1,835) | ($50,109) | ($4,612) | ($16,422) | ($60,259) | ($8,594) |
Basic (in dollars per share) | ($0.04) | ($0.20) | ($0.16) | ($0.12) | ($0.37) | ($57.87) | $1,341.67 | ($63.78) | ($0.52) | $34.18 | ($118.86) |
Diluted (in dollars per share) | ($0.04) | ($0.20) | ($0.16) | ($0.12) | ($0.37) | ($57.87) | ($3.88) | ($63.78) | ($0.52) | ($3.85) | ($118.86) |
Uncategorized_Items
Uncategorized Items | ||||||||||
[us-gaap_TemporaryEquityCarryingAmountAttributableToParent] | 3,550,000 | 12,375,000 | 50,000,000 | 20,000,000 | 60,841,000 | |||||
[us-gaap_TemporaryEquitySharesOutstanding] | 857,792 | 1,328,941 | 2,416,281 | 7,936,483 | 25,245,566 |