Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 23, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Adamas Pharmaceuticals Inc | ||
Entity Central Index Key | 1,328,143 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 251,571,342 | ||
Entity Common Stock, Shares Outstanding | 22,219,774 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 23,735 | $ 33,104 |
Available-for-sale securities | 89,917 | 73,691 |
Accounts receivable | 794 | 1,284 |
Prepaid expenses and other current assets | 2,541 | 5,108 |
Total current assets | 116,987 | 113,187 |
Property and equipment, net | 3,156 | 2,353 |
Available-for-sale securities, non-current | 22,292 | 13,165 |
Other assets | 38 | 38 |
Total assets | 142,473 | 128,743 |
Current liabilities | ||
Accounts payable | 3,589 | 3,052 |
Accrued liabilities | 5,867 | 8,457 |
Other current liabilities | 287 | 298 |
Total current liabilities | 9,743 | 11,807 |
Non-current liabilities | 547 | 749 |
Total liabilities | 10,290 | 12,556 |
Commitments and Contingencies (Note 8) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value — 5,000,000 shares authorized, and zero shares issued and outstanding at December 31, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.001 par value — 100,000,000 shares authorized, 22,013,644 and 18,505,462 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively | 27 | 23 |
Additional paid-in capital | 254,558 | 178,473 |
Accumulated other comprehensive loss | (193) | (158) |
Accumulated deficit | (122,209) | (62,151) |
Total stockholders’ equity | 132,183 | 116,187 |
Total liabilities and stockholders’ equity | $ 142,473 | $ 128,743 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 22,013,644 | 18,505,462 |
Common stock, shares outstanding | 22,013,644 | 18,505,462 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 572 | $ 1,916 | $ 55,846 |
Operating expenses | |||
Research and development | 31,230 | 35,895 | 21,860 |
General and administrative, net | 30,326 | 23,458 | 15,472 |
Total operating expenses | 61,556 | 59,353 | 37,332 |
Income (loss) from operations | (60,984) | (57,437) | 18,514 |
Interest and other income (expense), net | 811 | 363 | (917) |
Income (loss) before income taxes | (60,173) | (57,074) | 17,597 |
Provision (benefit) for income taxes | (115) | (5,272) | 7,374 |
Net income (loss) | (60,058) | (51,802) | 10,223 |
Net income (loss) attributable to common stockholders: | |||
Basic | (60,058) | (51,802) | 8,968 |
Diluted | $ (60,058) | $ (51,802) | $ 9,069 |
Net income (loss) per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ (2.77) | $ (2.86) | $ 0.60 |
Diluted (in dollars per share) | $ (2.77) | $ (2.86) | $ 0.53 |
Weighted average number of shares used in computing net income (loss) attributable to common stockholders: | |||
Basic (in shares) | 21,711 | 18,111 | 14,837 |
Diluted (in shares) | 21,711 | 18,111 | 17,107 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (60,058) | $ (51,802) | $ 10,223 |
Unrealized gain (loss) on available-for-sale securities | (35) | 22 | (180) |
Comprehensive income (loss) | $ (60,093) | $ (51,780) | $ 10,043 |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock And Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Convertible preferred stock |
Beginning balance (in shares) at Dec. 31, 2013 | 4,719,174 | |||||
Beginning balance at Dec. 31, 2013 | $ 19,149 | |||||
Increase (decrease) in temporary equity | ||||||
Issuance of Series AA preferred stock from the exercise of preferred stock warrants (in shares) | 622,660 | |||||
Issuance of Series AA preferred stock from the exercise of preferred stock warrants | $ 8,747 | |||||
Conversion of preferred stock to common stock in April 2014 in connection with the IPO (in shares) | (5,341,834) | |||||
Conversion of preferred stock to common stock in April 2014 in connection with the IPO | $ (27,896) | |||||
Ending balance (in shares) at Dec. 31, 2014 | 0 | |||||
Ending balance at Dec. 31, 2014 | $ 0 | |||||
Beginning balance (in shares) at Dec. 31, 2013 | 9,515,528 | |||||
Beginning balance at Dec. 31, 2013 | $ 56,605 | $ 14 | $ 77,163 | $ (20,572) | ||
Increase (decrease) in shareholders' equity | ||||||
Exercise of stock options (in shares) | 738,539 | |||||
Exercise of stock options | 481 | $ 1 | 480 | |||
Excess tax benefit of stock option exercises | 1,599 | 1,599 | ||||
Exercise of common stock warrants (in shares) | 199,837 | |||||
Exercise of common stock warrants | 453 | 453 | ||||
Conversion of preferred stock to common stock in April 2014 in connection with the IPO (in shares) | 4,003,225 | |||||
Conversion of preferred stock to common stock in April 2014 in connection with the IPO | 27,896 | $ 4 | 27,892 | |||
Issuance of common stock in public offerings, net of discounts, commissions and issuance costs (in shares) | 3,081,371 | |||||
Issuance of common stock in public offerings, net of discounts, commissions and issuance costs | 42,632 | $ 3 | 42,629 | |||
Net unrealized gain (loss) on available-for-sale securities | (180) | $ (180) | ||||
Stock issued under employee stock purchase plan (in shares) | 12,875 | |||||
Stock issued under employee stock purchase plan | 162 | 162 | ||||
Stock-based compensation | 7,203 | 7,203 | ||||
Net income (loss) | 10,223 | 10,223 | ||||
Ending balance (in shares) at Dec. 31, 2014 | 17,551,375 | |||||
Ending balance at Dec. 31, 2014 | 147,074 | $ 22 | 157,581 | (180) | (10,349) | |
Ending balance (in shares) at Dec. 31, 2015 | 0 | |||||
Ending balance at Dec. 31, 2015 | $ 0 | |||||
Increase (decrease) in shareholders' equity | ||||||
Exercise of stock options (in shares) | 409,683 | |||||
Exercise of stock options | 761 | $ 0 | 761 | |||
Vesting of common stock | 112 | 112 | ||||
Issuance of common stock in conjunction with Controlled Equity Offering, net of commissions and issuance costs(in shares) | 509,741 | |||||
Issuance of common stock in conjunction with Controlled Equity Offering, net of commissions and issuance costs | 9,657 | $ 1 | 9,656 | |||
Issuance of common stock in conjunction with warrant exercises (in shares) | 3,484 | |||||
Net unrealized gain (loss) on available-for-sale securities | 22 | 22 | ||||
Stock issued under employee stock purchase plan (in shares) | 31,179 | |||||
Stock issued under employee stock purchase plan | 407 | 407 | ||||
Stock-based compensation | 9,956 | 9,956 | ||||
Net income (loss) | (51,802) | (51,802) | ||||
Ending balance (in shares) at Dec. 31, 2015 | 18,505,462 | |||||
Ending balance at Dec. 31, 2015 | 116,187 | $ 23 | 178,473 | (158) | (62,151) | |
Ending balance (in shares) at Dec. 31, 2016 | 0 | |||||
Ending balance at Dec. 31, 2016 | $ 0 | |||||
Increase (decrease) in shareholders' equity | ||||||
Exercise of stock options (in shares) | 586,956 | |||||
Exercise of stock options | 3,042 | 3,041 | ||||
Vesting of common stock | 34 | 34 | ||||
Issuance of common stock in public offerings, net of discounts, commissions and issuance costs (in shares) | 2,875,000 | |||||
Issuance of common stock in public offerings, net of discounts, commissions and issuance costs | 61,822 | $ 3 | 61,819 | |||
Net unrealized gain (loss) on available-for-sale securities | (35) | (35) | ||||
Stock issued under employee stock purchase plan (in shares) | 46,226 | |||||
Stock issued under employee stock purchase plan | 620 | 620 | ||||
Stock-based compensation | 10,571 | 10,571 | ||||
Net income (loss) | (60,058) | (60,058) | ||||
Ending balance (in shares) at Dec. 31, 2016 | 22,013,644 | |||||
Ending balance at Dec. 31, 2016 | $ 132,183 | $ 27 | $ 254,558 | $ (193) | $ (122,209) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income (loss) | $ (60,058) | $ (51,802) | $ 10,223 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||
Depreciation | 808 | 435 | 155 |
Stock-based compensation | 10,571 | 9,956 | 7,203 |
Change in preferred stock warrant value | 0 | 0 | 983 |
Net accretion of discounts and amortization of premiums of available-for-sale securities | (301) | 875 | (1,361) |
Loss on fixed asset disposal | 0 | 0 | 111 |
Changes in assets and liabilities | |||
Accrued interest of available-for-sale securities | (2) | 110 | 0 |
Prepaid expenses and other assets | 2,643 | (4,416) | (381) |
Accounts receivable | 490 | (760) | (395) |
Accounts payable | 502 | (788) | 1,521 |
Accrued liabilities and other liabilities | (2,721) | (820) | 9,734 |
Net cash provided by (used in) operating activities | (48,068) | (47,210) | 27,793 |
Cash flows from investing activities | |||
Purchases of property and equipment | (1,624) | (1,399) | (1,285) |
Purchases of available-for-sale securities | (103,528) | (59,828) | (96,095) |
Maturities of available-for-sale securities | 78,443 | 69,285 | 0 |
Net cash provided by (used in) investing activities | (26,709) | 8,058 | (97,380) |
Cash flows from financing activities | |||
Proceeds from public offerings, net of offering costs | 61,822 | 9,657 | 42,632 |
Proceeds from issuance of common stock upon exercise of stock options | 2,966 | 746 | 1,011 |
Proceeds from employee stock purchase plan | 620 | 407 | 162 |
Repurchase of common stock | 0 | 0 | (370) |
Proceeds from issuance of common and preferred stock upon exercise of warrants | 0 | 0 | 1,986 |
Net cash provided by financing activities | 65,408 | 10,810 | 45,421 |
Net decrease in cash and cash equivalents | (9,369) | (28,342) | (24,166) |
Cash and cash equivalents at beginning of period | 33,104 | 61,446 | 85,612 |
Cash and cash equivalents at end of period | 23,735 | 33,104 | 61,446 |
Supplemental disclosure | |||
Cash paid for income taxes | 0 | 4,691 | 341 |
Supplemental disclosure of noncash investing and financing activities | |||
Purchases of property and equipment included in accounts payable and accrued expense | 148 | 161 | 0 |
Stock option exercise settled after period end | $ 76 | $ 0 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Adamas Pharmaceuticals, Inc. (the “Company”) is a pharmaceutical company that discovers and develops chrono-synchronous therapies to improve the daily lives of people affected by chronic neurologic disorders. The Company pioneered a platform to develop medicines for chronic neurologic disorders based upon an understanding of time-dependent biologic processes responsible for disease activity and drug response. The Company calls these medicines chrono-synchronous therapies. The Company’s portfolio includes: ADS-5102 : a chrono-synchronous amantadine therapy with a U.S. Food and Drug Administration (“FDA”) accepted New Drug Application (“NDA”) for the treatment of levodopa-induced dyskinesia (“LID”) in patients with Parkinson’s disease. LID is a form of dyskinesia (abnormality or impairment of voluntary movement) associated with levodopa, a drug used to treat Parkinson's disease. The NDA for ADS-5102 in LID has a Prescription Drug User Fee Act (“PDUFA”) date, or deadline by which the FDA must review its NDA, of August 24, 2017, and, if approved, the Company plans to launch ADS-5102 later in 2017. ADS-4101 : a chrono-synchronous lacosamide therapy in clinical development for the treatment of partial onset seizures in patients with epilepsy. The active ingredient in ADS-4101 is lacosamide, an anti-epileptic previously approved by the FDA, which is currently marketed by UCB as VIMPAT ® (lacosamide). Namenda XR ® (memantine hydrochloride) extended-release capsules and Namzaric ® (memantine hydrochloride extended-release and donepezil hydrochloride) capsules: two commercially available drugs currently marketed by Forest Laboratories Holdings Limited (“Forest”), an indirect wholly-owned subsidiary of Allergan plc (collectively, “Allergan”) in the United States for the treatment of moderate to severe Alzheimer’s disease. The Company is eligible to receive royalties on net sales of Namenda XR ® and Namzaric ® beginning in June of 2018 and May of 2020, respectively. In January 2016, the Company completed a follow-on public offering of 2,875,000 shares of its common stock, which includes the exercise in full by the underwriters of their option to purchase 375,000 shares of common stock, at an offering price of $23.00 per share. Proceeds from the follow-on public offering were approximately $61.8 million , net of underwriting discounts and offering-related transaction costs. The Company was incorporated in the State of Delaware on November 15, 2000. The Company’s headquarters and operations are located in Emeryville, California. The Company has four insignificant subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, clinical trial accruals, fair value of assets and liabilities, income taxes, and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results may differ from those estimates. Liquidity and Financial Condition To date, a substantial majority of the Company’s resources have been dedicated to the research and development of its products. The Company has not generated any commercial revenue from the sale of its products, and does not anticipate the generation of any commercial product revenue until it receives the necessary regulatory approval to launch one of its products. Based upon the current status of, and plans for, its product development and commercialization, the Company believes that the existing cash, cash equivalents, and investments of $ 135.9 million as of December 31, 2016 will be adequate to satisfy the Company’s capital needs through at least the next twelve months. However, the process of developing and commercializing products requires significant research and development, preclinical testing and clinical trials, manufacturing arrangements, as well as regulatory approvals. These activities, together with the Company’s general and administrative expenses, are expected to result in significant operating losses until the commercialization of the Company’s products or license agreements generate sufficient revenue to offset expenses. While the Company had net income during 2014, 2013, and 2012, it has not generated any commercial revenue from sales of its products. Under its license agreement with Allergan, the Company received the final milestone payment in 2014, and is not entitled to receive any royalties for net sales of Namzaric ® until mid-2020 and Namenda XR ® until mid-2018. To achieve sustained profitability, the Company, alone or with others, must successfully develop its product candidates, obtain required regulatory approvals, and successfully manufacture and market its products. Forward Stock Split In March 2014, the Board of Directors of the Company and stockholders approved a forward stock split of the Company’s common and preferred stock. As a result, common and preferred stock, stock options, and warrants to purchase common and preferred stock were adjusted in the ratio of 2 :1, effective March 24, 2014. All common and preferred shares and per share amounts presented in these condensed consolidated financial statements for all periods have been retroactively adjusted to reflect the 2 -for-1 forward stock split. No fractional shares were issued. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities, when purchased, of less than three months. Investments The Company classifies its investments as “available-for-sale.” In general, these investments are free of trading restrictions. The Company carries these investments at fair value, based on quoted market prices or other readily available market information. Quoted market prices for U.S. government and corporate bonds include both principal and accrued interest components. Unrealized gains and losses are included in accumulated other comprehensive income, which is reflected as a separate component of stockholders’ equity in its Consolidated Balance Sheets. Gains and losses are recognized when realized in its Consolidated Statements of Income. When the Company determines that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in income. Gains and losses are determined using the specific identification method. The Company considers all marketable debt securities with a maturity of less than one year to be short-term investments, with all others considered to be long-term investments. All of the Company’s available-for-sale securities are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investments’ fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, its intent to sell or hold the security, and whether or not the Company will be required to sell the security before the recovery of its amortized cost. Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. Segments In accordance with ASC 280-10-50, Segment Reporting, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company operates in one reportable segment: the development and commercialization of therapeutics targeting chronic disorders of the central nervous system. Revenue Recognition The Company recognizes revenue when all four of the following criteria have been met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Revenue under license arrangements is recognized based on the performance requirements of the contract. Determinations of whether persuasive evidence of an arrangement exists and whether delivery has occurred or services have been rendered are based on management’s judgments regarding the fixed nature of the fees charged for deliverables and the collectability of those fees. Should changes in conditions cause management to determine that these criteria are not met for any new or modified transactions, revenue recognized could be adversely affected. The Company generates revenue from collaboration and license agreements for the development and commercialization of products. Collaboration and license agreements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined objectives, and royalties on sales of commercialized products. The Company’s performance obligations under the collaboration and license agreements may include the license or transfer of intellectual property rights, obligations to provide research and development services and related materials, and obligations to participate on certain development and/or commercialization committees with the partners. For revenue agreements with multiple-element arrangements, the Company allocates revenue to each non-contingent element based on the relative-selling-price of each element in an arrangement. When applying the relative-selling-price method, the Company determines the selling price for each deliverable using the following estimation hierarchy: (i) vendor-specific objective evidence of fair value of the deliverable, if it exists, (ii) third-party evidence of selling price, if vendor-specific objective evidence is not available, or (iii) the vendor’s best estimate of selling price, if neither vendor-specific nor third-party evidence is available. Revenue allocated is then recognized when the four basic revenue recognition criteria, mentioned above, are met for each element. The Company recognizes payments that are contingent upon achievement of a substantive milestone in their entirety in the period in which the milestone is achieved. Milestones are defined as events that can only be achieved based on the Company’s performance and there is substantive uncertainty about whether the event will be achieved at the inception of the arrangement. Events that are contingent only on the passage of time or only on counterparty performance are not considered milestones subject to this guidance. Further, the amounts received must relate solely to prior performance, be reasonable relative to all of the deliverables and payment terms within the agreement and commensurate with the Company’s performance to achieve the milestone after commencement of the agreement. Amounts related to research and development funding and full-time equivalents assigned to the license agreement are recognized as the related services or activities are performed, in accordance with the contract terms. Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and short and long-term investments. Cash, cash equivalents, and investments are deposited with financial institutions or invested in security issuers that management believes are creditworthy. Deposits may, at times, exceed the amount of insurance provided on such deposits. To date, the Company has not experienced any losses on invested cash and cash equivalents. Risk and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of results of clinical trials and reaching milestones, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships, and dependence on key individuals. Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary approvals. If the Company is denied approval, approval is delayed, or the Company is unable to maintain approval, it could have a materially adverse impact on the Company. The Company has expended and will continue to expend substantial funds to conduct research, development, and clinical testing of its product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to conduct research and development activities and commercialize its products. Additional funds may not be available on acceptable terms, if at all. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs or alter its product commercialization plans, which may materially and adversely affect its business, financial condition, and operations. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and ten years . Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease, which is five years . Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized. Leases At the inception of a lease, the Company evaluates the lease agreement to determine whether the lease is an operating, capital or build-to-suit lease using the criteria in ASC 840, “Leases.” Certain lease agreements also require the Company to make additional payments for taxes, insurance, and other operating expenses incurred during the lease period, which are expensed as incurred. For operating leases, the Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred liability. Where lease agreements contain rent escalation clauses, rent abatements and/or concessions, such as rent holidays and tenant improvement allowances, the Company applies them in the determination of straight-line expense over the lease term. Accounting for Long-Lived Assets The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by the comparison of the carrying amount to the future net cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets as of December 31, 2016 . Clinical Trial Accruals The Company’s clinical trial accruals are based on estimates of patient enrollment and related costs at clinical investigator sites as well as estimates for the services received and efforts expended pursuant to contracts with multiple research institutions and clinical research organizations (“CROs”) that conduct and manage clinical trials on the Company’s behalf. The Company estimates clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage clinical trials on its behalf. In accruing service fees, the Company obtains the reported level of patient enrollment at each site and estimates the time period over which services are to be performed and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. Research and Development Research and development (“R&D”) expenses include salaries and related compensation, contractor and consultant fees, external clinical trial expenses performed by contract research organizations (“CRO”), licensing fees, acquired intellectual property with no alternative future use, and facility and administrative expense allocations. In addition, the Company funds R&D at research institutions under agreements that are generally cancelable at its option. Research costs typically consist of applied research and preclinical and toxicology work. Pharmaceutical manufacturing development costs consist of product formulation, chemical analysis, and the transfer and scale-up of manufacturing at facilities operated by the Company’s contract manufacturers. Clinical development costs include the costs of Phase 1, Phase 2, and Phase 3 clinical trials. These costs are a significant component of the Company’s research and development expenses. The Company accrues costs for clinical trial activities performed by contract research organizations and other third parties based upon the estimated amount of work completed on each study as provided by the CRO. These estimates are reviewed for reasonableness by the Company’s internal clinical personnel, and the Company aims to match the accrual to actual services performed by the organizations as determined by patient enrollment levels and related activities. The Company monitors patient enrollment levels and related activities using available information; however, if the Company underestimates activity levels associated with various studies at a given point in time, the Company could be required to record significant additional R&D expenses in future periods when the actual activity level becomes known. The Company charges all such costs to R&D expenses. Non-refundable advance payments are capitalized and expensed as the related goods are delivered or services are performed. Convertible Preferred Stock The Company classifies the convertible preferred stock as temporary equity on the balance sheets due to certain change of control events that are outside the Company’s control, including liquidation, sale, or transfer of the Company, as holders of the convertible preferred stock could have caused redemption of the shares. Shares of convertible preferred stock were converted to common stock upon close of the IPO in April 2014. Convertible Preferred Stock Warrants The Company accounts for its convertible preferred stock warrants as a liability based upon the characteristics and provisions of each instrument. Convertible preferred stock warrants classified as a liability are recorded on the Company’s balance sheet at their fair value on the date of issuance and were revalued on each subsequent balance sheet, with fair value changes recognized as increases or reductions in the statements of operations. The Company adjusted the liability for changes in fair value of these warrants until the earlier of: (i) exercise of warrants, (ii) expiration of warrants, (iii) a change of control of the Company, or (iv) the closing of the Company’s IPO. At those times, the convertible preferred stock warrant liability was adjusted to fair value in the condensed consolidated statements of operations and comprehensive income and, upon the closing of the Company’s IPO in April 2014, the final fair value was reclassified to additional paid-in capital. Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, short-term investments, accounts receivable, long-term investments and other current assets, other assets, accounts payable, accrued liabilities approximate fair value due to the short-term nature or determinable value of these items. The fair value of convertible preferred stock warrants is determined using readily available market information. See also Note 4 for further details of the Company’s fair value instruments. Income Taxes The Company accounts for income taxes under the asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company follows the provisions of ASC 740, Income Taxes, under which it assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents are options granted under the Company’s stock awards plans and are calculated under the treasury stock method. Common equivalent shares from unexercised stock options, unvested restricted stock units, and convertible preferred stock warrants are excluded from the computation when there is a loss as their effect is anti-dilutive, or if the exercise price of such options is greater than the average market price of the stock for the period. Prior to April 10, 2014, the Company calculated its basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. Under the two-class method, the Company determined whether it had net income attributable to common stockholders, which includes the results of operations less current period convertible preferred stock non-cumulative dividends. If it was determined that the Company had net income attributable to common stockholders during a period, the related undistributed earnings were then allocated between common stock and the convertible preferred stock based on the weighted average number of shares outstanding during the period to determine the numerator for the basic net income per share attributable to common stockholders. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities to determine the numerator for the diluted net income per share attributable to common stockholders. Stock-Based Compensation The Company accounts for stock-based compensation of stock options granted to employees and directors and for employee stock purchase plan shares by estimating the fair value of stock-based awards using the Black-Scholes option-pricing model. The Company accounts for stock-based compensation of restricted stock units granted to employees based on the closing price of the Company’s common stock on the date of grant. The fair value of stock-based awards are recognized and amortized over the applicable vesting period. All stock options awarded to non-employees are accounted for at the fair value of the consideration received or the fair value of the equity instrument issued, as calculated using the Black-Scholes model. Stock options granted to non-employees are subject to periodic revaluation at each reporting date as the underlying equity instruments vest. In order to estimate the value of share-based awards, the Company uses the Black-Scholes model, which requires the use of certain subjective assumptions. The most significant subjective assumptions are management’s estimates of the expected volatility and the expected term of the award. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from any of these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . The amendment in this ASU provides guidance on the revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The core principle of this update provides guidance to identify the performance obligations under the contract(s) with a customer and how to allocate the transaction price to the performance obligations in the contract. It further provides guidance to recognize revenue when (or as) the entity satisfies a performance obligation. This standard will replace most existing revenue recognition guidance. On July 9, 2015, the FASB approved a one-year deferral of the effective date of this standard to 2018 for public companies, with an option that would permit companies to adopt the standard as early as the original effective date of 2017. Early adoption prior to the original effective date is not permitted. Since the issuance of ASU 2014-09, the FASB has issued several amendments which clarify certain points, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , ASU 2016-10, Identifying Performance Obligations and Licensing , ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting , and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients. The Company plans to adopt the new standard in the first quarter of fiscal year 2018. The Company is currently evaluating the method of adoption and effect the new guidance will have on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . This ASU provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a Company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about the company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this update are effective for annual periods ending after December 15, 2016, and for interim periods within annual periods beginning after December 15, 2016 with early adoption permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . Under ASU 2015-17, a reporting entity is required to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. Current guidance requiring the offsetting of deferred tax assets and liabilities of a tax-paying component of an entity and presentation as a single noncurrent amount is not affected. This ASU is effective for public business entities issuing financial statements for the annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for financial statements as of the beginning of an interim or annual reporting period. Entities may apply the update prospectively to all deferred tax assets and liabilities and taxes, or retrospectively for all periods presented. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The authoritative guidance significantly amends the current accounting for leases. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) a financing lease or (ii) an operating lease. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases. For sale leaseback transactions, a sale will only be recognized if the criteria in the new revenue recognition standard are met. For public business entities, this guidance is effective for fiscal periods beginning after December 15, 2018 and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect the new guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation . The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company adopted ASU No. 2016-09 in the fourth quarter of fiscal 2016 and the implementation of this standard did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments. The new guidance changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect the new guidance will have on its consolidated financial statements. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | BALANCE SHEET COMPONENTS Prepaid expenses and other current assets (in thousands) December 31, 2016 2015 Income tax receivable $ 168 $ 4,293 Prepaid expenses 1,279 545 Prepaid clinical trial 37 255 Other current assets 1,057 15 Prepaid expenses and other current assets $ 2,541 $ 5,108 Property and equipment, net (in thousands) December 31, 2016 2015 Computer equipment and software $ 2,128 $ 869 Equipment 252 62 Furniture and fixtures 466 429 Leasehold improvements 1,645 1,619 4,491 2,979 Less: Accumulated depreciation and amortization (1,335 ) (626 ) Property and equipment, net $ 3,156 $ 2,353 Depreciation expense was $808,000 , $ 435,000 , and $ 155,000 for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Accrued liabilities (in thousands) December 31, 2016 2015 Accrued salaries and related benefit expenses $ 3,696 $ 3,372 Clinical trial accruals 1,041 4,097 Accrued consulting and other professional fees 864 749 Income and other taxes 37 53 Other 229 186 Accrued liabilities $ 5,867 $ 8,457 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS In accordance with ASC 820-10, Fair Value Measurements and Disclosures, the Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows: • Level 1 inputs, which include quoted prices in active markets for identical assets or liabilities; • Level 2 inputs, which include observable inputs other than Level 1 inputs, 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 asset or liability. For available-for-sale securities, the Company reviews trading activity and pricing as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and • Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgment or estimation. The following table represents the fair value hierarchy for the Company’s financial assets and liabilities which require fair value measurement on a recurring basis (in thousands): Fair Value Measurements at December 31, 2016 Total Level 1 Level 2 Level 3 Assets Money market $ 192 $ 192 $ — $ — Corporate debt 51,233 — 51,233 — U.S. Treasury notes 60,976 — 60,976 — Total assets measured at fair value $ 112,401 $ 192 $ 112,209 $ — Fair Value Measurements at December 31, 2015 Total Level 1 Level 2 Level 3 Assets Money market $ 23,430 $ 23,430 $ — $ — Corporate debt 56,787 — 56,787 — U.S. Treasury notes 30,069 — 30,069 — Total assets measured at fair value $ 110,286 $ 23,430 $ 86,856 $ — Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy. Corporate debt and U.S. Treasury notes are measured at fair value using Level 2 inputs. The Company reviews trading activity and pricing for these investments as of each measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level 2 of the fair value hierarchy. Upon issuance of the convertible preferred stock warrants, the Company estimated the fair value of the liability and subsequent remeasurement using the option pricing model at each reporting date, using the following inputs: the risk‑free interest rates, the expected dividend rates, the remaining expected life of the warrants, and the expected volatility of the price of the underlying stock. The estimates were based, in part, on subjective assumptions and could differ materially in future periods. This results in the classification of the preferred stock warrant liability as Level 3 of the fair value hierarchy. The following table includes a roll forward of the financial instruments classified within Level 3 of the fair value hierarchy (in thousands): Fair Value Using Level 3 Inputs Convertible Preferred Stock Warrant Liability Balance at December 31, 2013 $ 6,232 Change in fair value recorded in Other (income) expense, net 983 Exercise of warrants (7,215 ) Balance at December 31, 2014 — Balance at December 31, 2015 — Balance at December 31, 2016 $ — There were no transfers to or from Level 1 and Level 2 during the years ended December 31, 2016 and 2015 . |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS The Company’s investments consist of corporate debt and U.S. Treasury notes classified as available-for-sale securities. The Company limits the amount of investment exposure as to institution, maturity, and investment type. To mitigate credit risk, the Company invests in investment grade corporate debt and United States Treasury notes. Such securities are reported at fair value, with unrealized gains and losses excluded from earnings and shown separately as a component of accumulated other comprehensive income (loss) within stockholders’ equity. Realized gains and losses are reclassified from other comprehensive income (loss) to other income (expense) on the condensed consolidated statements of operations when incurred. The Company may pay a premium or receive a discount upon the purchase of available-for-sale securities. Interest earned and gains realized on available-for-sale securities and amortization of discounts received and accretion of premiums paid on the purchase of available-for-sale securities are included in investment income. The following table is a summary of amortized cost, unrealized gain and loss, and the fair value of available-for-sale securities as of December 31, 2016 and 2015 (in thousands): December 31, 2016 Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value Investments: Corporate debt $ 51,354 $ — $ (121 ) $ 51,233 U.S. Treasury notes 61,048 5 (77 ) 60,976 Total $ 112,402 $ 5 $ (198 ) $ 112,209 Reported as: Short-term investments $ 90,050 $ 1 $ (134 ) $ 89,917 Long-term investments 22,352 4 (64 ) 22,292 Total $ 112,402 $ 5 $ (198 ) $ 112,209 December 31, 2015 Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value Investments: Corporate debt $ 56,892 $ — $ (105 ) $ 56,787 U.S. Treasury notes 30,122 1 (54 ) 30,069 Total $ 87,014 $ 1 $ (159 ) $ 86,856 Reported as: Short-term investments $ 73,817 $ 1 $ (127 ) $ 73,691 Long-term investments 13,197 — (32 ) 13,165 Total $ 87,014 $ 1 $ (159 ) $ 86,856 Short-term and long-term investments include accrued interest of $ 0.3 million and $ 0.1 million , respectively, as of December 31, 2016 . Short-term and long-term investments includes accrued interest of $ 0.4 million and $ 36,000 , respectively, as of December 31, 2015 . The Company has not incurred any realized gains or losses on investments for the years ended December 31, 2016 and 2015 . Investments are classified as short-term or long-term depending on the underlying investment’s maturity date. Long-term investments held by the Company have a maturity date range of greater than 12 months and a maximum of 16 months as of December 31, 2016 . |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2016 | |
License Agreements | |
License Agreements | LICENSE AGREEMENTS In November 2012, the Company granted Allergan an exclusive license, with right to sublicense, certain of the Company’s intellectual property rights relating to human therapeutics containing memantine in the United States. In connection with these rights, Allergan markets and sells Namzaric ® and Namenda XR ® for the treatment of moderate to severe dementia related to Alzheimer’s disease. Pursuant to the agreement, Allergan made an upfront payment of $65.0 million . The Company earned and received additional cash payments totaling $ 95.0 million upon achievement by Allergan of certain development and regulatory milestones. Under the agreement, external costs incurred related to the prosecution and litigation of intellectual property rights are reimbursable. For the twelve months ended December 31, 2016, reimbursed expenses amounting to $2.4 million are reflected as a reduction to general and administrative, net. In addition, the Company may earn tiered royalty payments based on future net sales of Namzaric ® and Namenda XR ® . The Company identified the following two non-contingent performance deliverables under the license agreement: (i) transfer of intellectual property rights, inclusive of the related technology know-how conveyance (“license and know-how” or “license”) and (ii) the obligation to participate on the Joint Development Committee (“JDC”). The Company concluded that the license and the know-how together represent a single deliverable, and therefore the two together have been accounted for as a single unit of accounting. There was no separate consideration identified in the agreement for the deliverables and there was no right of return under the agreement. The Company considered the provisions of the multiple-element arrangement guidance in determining whether the deliverables outlined above have standalone value. The transfer of license and know-how has standalone value separate from the obligation to participate on the JDC, as the agreement allows Allergan to sublicense its rights to the acquired license to a third party. Further, the Company believes that Allergan has research and development expertise with compounds similar to those licensed under the agreement and has the ability to engage other third parties to develop these compounds, allowing Allergan to realize the value of the license and know-how without receiving the JDC participation. The Company developed its best estimates of selling prices (“BESP”) for each deliverable in order to allocate the non‑contingent arrangement consideration to the two units of accounting. Based on BESP analysis, value assigned to the obligation to participate on the JDC was a negligible amount. Accordingly, the entire upfront license fee of $ 65.0 million was allocated to the transfer of license and technical know-how. Revenue recognition commenced upon delivery of the license and was recognized on a straight-line basis through the period of the transfer of the know-how. Allergan was able to derive value from the license as the know-how was transferred. A straight-line pattern of revenue recognition is only acceptable when a more precise pattern cannot be discerned. The way in which the transfer of know-how occurred did not give rise to a more precise pattern of recognition, and the Company therefore recognized revenue on a straight-line basis over the period of the transfer of the know-how (from November 2012 to February 2013). In November and December 2013, the Company received a total of $ 40.0 million in milestone payments under its license agreement with Allergan. The milestone payments were for the successful completion of studies that supported the New Drug Application (“NDA”) filing with the FDA for Namzaric ® by Allergan. In May 2014, the Company received an additional $ 25.0 million milestone payment under the license agreement. This milestone payment was a result of the FDA’s acceptance of the NDA for Namzaric ® . In December 2014, the Company received a final $ 30.0 million milestone payment in connection with the FDA approval of Namzaric ® . These amounts have been recorded as revenue when received in the consolidated statements of operations and comprehensive income during 2013 and 2014, respectively. The Company is entitled to receive royalties on net sales in the United States by Allergan, its affiliates, or any of its sublicensees of controlled-release versions of memantine products covered by the terms of the license agreement. Beginning in May 2020, the Company will be entitled to receive royalties in the low to mid-teens from Allergan for sales of Namzaric ® in the United States. Beginning in June 2018, the Company will be entitled to receive royalties in the low to mid-single digits for sales of Namenda XR ® in the United States. Allergan’s obligation to pay royalties with respect to fixed-dose memantine-donepezil products, including Namzaric ® , continues until the later of (i) 15 years after the commercial launch of the first fixed-dose memantine-donepezil product by Allergan in the United States or (ii) the expiration of the Orange Book listed patents for which Allergan obtained rights from the Company covering such product. Allergan’s obligation to pay royalties with respect to Namenda XR ® continues until the expiration of the Orange Book listed patents covering such products. However, Allergan’s obligation to pay royalties for any product covered by the license is eliminated in any quarter where there is significant competition from generics. |
Warrants to Purchase Common or
Warrants to Purchase Common or Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants to Purchase Common or Preferred Stock | WARRANTS TO PURCHASE COMMON OR PREFERRED STOCK In conjunction with various financings between 2002 and 2012, the Company issued warrants to purchase 758,994 shares of convertible preferred stock and 127,780 shares of common stock. The relative fair value of these warrants was determined using the Black-Scholes model and was amortized to interest expense over the term of each loan, unless subsequently modified. Immediately prior to the completion of the Company’s IPO in 2014, 206,162 of the warrants to purchase common stock were either exercised for cash or automatically net exercised for a total issuance of 199,837 shares of common stock, pursuant to the terms of the warrants. In July 2015, warrants to purchase an aggregate of 7,116 shares of common stock were exercised in a cashless exercise, resulting in the issuance of 3,484 shares of common stock. As of December 31, 2016 and 2015 , warrants to purchase zero and 7,116 shares of common stock were outstanding, respectively. Prior to the IPO in April 2014, the warrants to purchase convertible preferred stock were classified as a liability and remeasured to fair value each reporting period. The Company had estimated the fair value of these liabilities using the Black-Scholes model and assumptions that were based on the individual characteristics of the warrants on the valuation date, as well as the assumptions for expected volatility, expected life, dividends, and risk-free interest rate. The remeasurement of the fair value of the outstanding warrants from December 31, 2013 through the date of the conversion to a common stock warrant and following the exercise resulted in a $ 1.0 million expense recorded to other income (expense), net in the Company’s consolidated statements of operations and comprehensive income. As of both December 31, 2016 and 2015 , there were no warrants to purchase convertible preferred stock outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Lease Commitments The Company leases approximately 18,500 square feet of office space in Emeryville, California under an operating lease that expires April 30, 2020. The lease provides for periods of escalating rent. The total cash payments over the life of the lease are divided by the total number of months in the lease period and the average rent is charged to expense each month during the lease period. As of December 31, 2016 , future minimum lease payments under the non-cancelable facility operating lease were as follows (in thousands): December 31, 2016 2017 $ 614 2018 634 2019 653 2020 224 2021 — Thereafter — Total $ 2,125 The Company’s total rent expense was approximately $ 625,000 , $ 628,000 , and $ 277,000 for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Purchase Commitments The Company enters into contracts in the normal course of business that include, among others, arrangements with clinical research organizations for clinical trials, vendors for pre-clinical research, and vendors for clinical supply manufacturing. These contracts generally provide for termination upon notice, and therefore the Company believes that its obligations under these agreements are not material. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown, because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification In accordance with the Company’s amended and restated certificate of incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving in such capacity. There have been no claims to date, and the Company has a directors and officers liability insurance policy that may enable it to recover a portion of any amounts paid for future claims. Litigation In November 2012, the Company granted Forest an exclusive license to certain of the Company’s intellectual property rights relating to human therapeutics containing memantine in the United States. Under the terms of that license agreement, Forest has the right to enforce such intellectual property rights which are related to its right to market and sell Namzaric ® and Namenda XR ® for the treatment of moderate to severe dementia related to Alzheimer’s disease. The Company has a right to participate in, but not control, such enforcement actions by Forest. As of the date of this filing, several companies have submitted Abbreviated New Drug Applications, or ANDAs, to the FDA requesting permission to manufacture and market generic versions of Namenda XR ® , on which the Company is entitled to receive royalties from Forest beginning in June 2018. In the notices, these companies allege that the patents associated with Namenda XR ® , some of which are owned by Forest or licensed by Forest from Merz Pharma GmbH & Co. KGaA, and others of which are owned by the Company and licensed by the Company exclusively to Forest in the United States, are invalid, unenforceable, and/or will not be infringed by the companies’ manufacture, use, or sale of generic versions of Namenda XR ® . The Company, Forest, Merz Pharma GmbH & Co. KGaA, and Merz Pharmaceuticals GmbH (together Merz) filed lawsuits in the U.S. District Court for the District of Delaware for infringement of the relevant patents against all of these companies. The Company and Forest have entered into a series of settlement agreements with all Namenda XR ® ANDA filers, except for one defendant with respect to the certain patents subject to the Markman ruling described below. Entry dates for generic Namenda XR ® are governed by the settlement agreements in that action. Subject to those agreements, the earliest date on which any of these agreements grants a license to market generic version of Namenda XR ® is January 31, 2020 or in the alternative, an option to launch an authorized generic version of Namenda XR ® beginning on January 31, 2021. In January 2016, the Delaware District Court issued a claim construction (Markman) ruling in the Namenda XR ® litigation that includes findings of indefiniteness as to certain claim terms in the asserted patents licensed by the Company to Forest. On July 26, 2016, the District Court issued a final judgment of invalidity on those patents based upon the Markman ruling. The Company and Forest filed the notice of appeal of that final judgment to the United States Court of Appeals for the Federal Circuit. The appeal is ongoing. If the appeal is unsuccessful, generic entry of Namenda XR ® could occur prior to January 31, 2020. Additionally, as of the date of this filing, a number of companies have submitted ANDAs requesting permission to manufacture and market generic versions of Namzaric ® , on which the Company is entitled to receive royalties from Forest beginning in May 2020. The Company and Forest have begun to file lawsuits alleging infringement of the relevant patents against Namzaric ® ANDA filers, who are seeking to launch generic versions of Namzaric ® , in the same court as heard the Namenda XR ® litigation. As of the date of this filing, the Company and Forest have settled with all but one active defendants, including the first filers on all the available dosage forms of Namzaric ® , granting a license to market the first generic versions of Namzaric ® on January 1, 2025 subject to the settlement agreements. The Company and Forest will continue to enforce the patents associated with Namzaric ® . From time to time, the Company may be party to legal proceedings, investigations, and claims in the ordinary course of its business. Other than the matters described above, the Company is not presently a party to any material legal proceedings. |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | CONVERTIBLE PREFERRED STOCK The Company’s amended and restated certificate of incorporation filed on April 15, 2014, authorizes 5,000,000 shares of preferred stock, of which there were no shares outstanding as of December 31, 2016 and 2015 . Upon close of the IPO in April 2014, all of the Company’s outstanding shares of convertible preferred stock were automatically converted into shares of common stock. At December 31, 2013, the convertible preferred stock consisted of the below (in thousands except share and per share data). The fair value was approximately $ 27.9 million upon completion of the IPO. Shares Per Share Liquidation Preference Carrying Value Series Authorized Outstanding Series AA 5,000,000 3,431,620 $ 3.81 $ 6,521 Series AA-1 1,700,000 1,287,554 50.00 12,628 6,700,000 4,719,174 $ 19,149 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Common Stock The amended and restated certificate of incorporation authorizes the Company to issue 100,000,000 shares of common stock. Common stockholders are entitled to dividends as and when declared by the board of directors, subject to the rights of holders of all classes of stock outstanding having priority rights as to dividends. There have been no dividends declared to date. Each share of common stock is entitled to one vote. The Company has classified payments received for all unvested shares of common stock issued upon the early exercise of stock options as employee deposits (a liability) as these options are not considered to be substantively exercised until vested. At December 31, 2016 and December 31, 2015 , zero and 3,000 shares of common stock, respectively, from early exercised options were unvested. Public Offering In April 2014, the Company issued and sold 3,000,000 shares of its common stock in its initial public offering (“IPO”) at a public offering price of $ 16.00 per share, for net proceeds of approximately $ 41.4 million after deducting underwriting discounts and commissions of approximately $ 3.4 million and expenses of approximately $ 3.2 million . In May 2014, the Company issued and sold 81,371 shares of its common stock pursuant to the underwriters’ partial exercise of their option to purchase additional shares, for net proceeds of approximately $ 1.2 million after deducting underwriting discounts and commissions of approximately $ 91,000 . Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into an aggregate of 4,003,225 shares of common stock. In addition, all of the Company’s convertible preferred stock warrants outstanding at the close of the IPO were converted into common stock. In January 2016, the Company completed a follow-on public offering of 2,875,000 shares of common stock, which includes the exercise in full by the underwriters of their option to purchase 375,000 shares of common stock, at an offering price of $23.00 per share. Proceeds from the follow-on public offering were approximately $61.8 million , net of underwriting discounts and offering-related transaction costs. Controlled Equity Offering On June 1, 2015, the Company entered into a Controlled Equity Offering Sales Agreement (“Sales Agreement”) with a sales agent, pursuant to which the Company was able to, at its discretion, issue and sell common stock from time to time with a value of up to a maximum of $ 25.0 million in an at-the-market offering. The sales agent earned a 3% commission on gross proceeds for any sales of common stock made under the Sales Agreement. During the year ended December 31, 2016 , there were no shares sold under the Sales Agreement. The Company sold a total of 509,741 shares under the Sales Agreement in 2015 at prevailing market prices with an average price of $20.04 for net proceeds of $9.7 million . The Sales Agreement was terminated in November 2016. Shares reserved for Future Issuance Shares of Company’s common stock reserved for future issuance are as follows: December 31, 2016 December 31, 2015 Common stock awards issued and outstanding 5,483,557 5,328,378 Authorized for future issuance under 2014 Equity Incentive Plan 1,576,926 1,463,415 Authorized for future issuance under 2016 Inducement Plan 334,062 — Employee stock purchase plan 532,849 394,148 Total 7,927,394 7,185,941 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Stock Compensation Plans In October 2002, the Company established its 2002 Employee, Director, and Consultant Stock Plan and in December 2007, the Company established its 2007 Stock Plan. No further grants were then made under the 2002 Plan. In February 2014, the Company’s board of directors adopted, and in March 2014 the Company’s stockholders approved, the 2014 Equity Incentive Plan (the “2014 Plan”), which became effective on the completion of the IPO. No further grants were then made under the 2007 Plan. Under the 2014 Plan, 1,993,394 shares of the Company’s common stock were made available for issuance which included all shares that, as of the effective time, were reserved for issuance pursuant to the 2007 Plan, and is subject to further increase for shares that were subject to outstanding options under the 2007 Plan and the 2002 Plan as of the effective time that thereafter expire, terminate, or otherwise are forfeited or reacquired. The number of shares of the Company’s common stock reserved for issuance pursuant to the 2014 Plan will automatically increase on the first day of each fiscal year for a period of up to 10 years , commencing on the first day of the fiscal year following 2014, in an amount equal to 4% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding fiscal year, or a lesser number of shares as determined by the Company’s board of directors. For 2016 and 2015 , the common stock available for issuance under the 2014 Plan increased by 739,708 and 701,763 shares of common stock, respectively. As of December 31, 2016 , the number of shares available for issuance under the 2014 Plan was 1,576,926 . Options granted under the 2014 Stock Plan may have terms of up to ten years. All options issued to date have had a ten year life. The exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, as determined by the board of directors. The exercise price of an ISO and NSO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant, respectively, as determined by the board of directors. The exercise price of a NSO shall not be less than the par value per share of common stock. The options granted generally vest over four years and vest at a rate of 25% upon the first anniversary of the issuance date and 1/48th per month thereafter. Restricted stock units granted vest at a rate of 25% per year over four years. In March 2016, the Company’s board of directors approved the 2016 Inducement Plan (the “Inducement Plan”) under which 450,000 shares of the Company’s common stock were made available for issuance. Options granted under the Inducement Plan may have terms of up to ten years. All options issued to date have had a ten year life. Consistent with the 2014 Plan, options granted generally vest over four years and vest at a rate of 25% upon the first anniversary of the issuance date and 1/48th per month thereafter. Restricted stock units granted vest at a rate of 25% per year over four years. The Inducement Plan was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules. Stock Option Activity The stock option and related activity under all of the Company’s stock compensation plans is summarized as follows: Outstanding Options Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (thousands) Number of Shares Weighted Average Exercise Price Stock Options Balances, December 31, 2015 5,328,378 $ 8.57 Options granted 1,042,975 14.75 Options exercised (586,956 ) 5.18 Options forfeited (436,672 ) 13.85 Options expired (77,529 ) 17.70 Balances, December 31, 2016 5,270,196 $ 9.60 7.06 $ 39,744 Vested and expected to vest, December 31, 2016 5,123,793 $ 9.49 7.03 $ 39,182 Vested, December 31, 2016 3,178,726 $ 7.12 6.25 $ 31,719 The aggregate intrinsic value of options outstanding, vested and expected to vest, and vested were calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock as of December 31, 2016 of $16.90 . During the years ended December 31, 2016 , 2015 , and 2014 , the Company granted stock options to employees to purchase 1,030,375 , 917,150 , and 2,310,583 shares of common stock, respectively, with a weighted-average grant date fair value of $9.15 , $11.47 , and $10.77 , respectively. As of December 31, 2016 , there was total unrecognized compensation cost related to unvested options of approximately $19.1 million . This cost is expected to be recognized over a period of 2.4 years . The total fair value of employee stock options vested for the years ended December 31, 2016 , 2015 , and 2014 was $8.4 million , $10.0 million and $0.9 million , respectively. The options outstanding and exercisable by exercise price at December 31, 2016 is summarized as follows: Options Outstanding Options Exercisable Weighted- Average Remaining Life (in years) Weighted- Average Exercise Price Weighted- Average Exercise Price Number of Shares Number of Shares Range of Exercise Prices $0.00 - 0.99 1,136,066 4.94 $ 0.67 1,136,066 $ 0.67 $1.00 - 8.99 538,052 5.02 2.71 538,052 2.71 $9.00 - 10.99 1,402,600 7.13 9.00 1,402,600 9.00 $11.00 - 16.99 1,049,597 8.87 14.45 268,046 14.74 $17.00 - 26.22 1,143,881 8.41 17.99 506,035 18.14 5,270,196 7.06 $ 9.60 3,850,799 $ 7.26 The weighted average remaining contractual life and aggregated intrinsic value of options exercisable as of December 31, 2016 are 6.40 years and $37.7 million , respectively. The aggregate intrinsic value of options exercised was approximately $6.6 million , $6.6 million , and $10.0 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The aggregate intrinsic value is calculated as the pre-tax difference between the weighted-average exercise price of the underlying awards and the closing price per share of $16.90 of the Company’s common stock on December 31, 2016 . The calculation excludes any awards with an exercise price higher than the closing price of the Company’s common stock on December 31, 2016 . Restricted Stock Unit Activity The restricted stock unit and related activity under all of the Company’s stock compensation plans is summarized as follows: Outstanding Units Weighted-Average Restricted Stock Units Number of Shares Unvested, December 31, 2015 — $ — Granted 229,561 14.59 Vested — — Forfeited (16,200 ) 13.66 Unvested, December 31, 2016 213,361 $ 14.66 As of December 31, 2016 , there was total unrecognized compensation cost related to unvested RSU’s of approximately $2.6 million . This cost is expected to be recognized over a period of 3.4 years . Employee Stock Purchase Plan In February 2014, the Company’s board of directors adopted and, in March 2014, the Company’s stockholders approved, the 2014 Employee Stock Purchase Plan (the “ESPP”), which became effective on the completion of the Company’s IPO. The ESPP authorized the issuance of 262,762 shares. Under the ESPP, employees, subject to certain restrictions, may purchase shares of common stock at 85% of the fair market value at either the beginning of the offering period or the date of purchase, whichever is less. Purchases are limited to the lesser of 15% of each employee’s eligible annual compensation or $25,000 . Through the end of 2016 , the Company has issued a total of 90,280 shares under the ESPP. The number of shares available for future issuance under the plan were 532,849 at December 31, 2016 . Beginning January 1, 2015 and continuing through and including January 1, 2024, the amount of common stock reserved for issuance under the ESPP will increase annually on that date by the lesser of (i) one percent ( 1% ) of the total number of shares of common stock outstanding on such December 31, (ii) 520,000 shares of common stock, or (iii) a number of shares as determined by the board of directors prior to the beginning of each year, which shall be the lesser of (i) or (ii) above. For 2016 and 2015 , the common stock available for issuance under the ESPP increased by 184,927 and 175,440 shares of common stock, respectively. Stock-Based Compensation Expense The following table reflects stock-based compensation expense recognized for the years ended December 31, 2016 , 2015 , and 2014 (in thousands): Years Ended December 31, 2016 2015 2014 Research and development: Employees $ 2,645 $ 2,492 $ 1,157 Non-employee consultants 210 664 1,331 General and administrative: Employees 7,446 6,388 2,887 Non-employee consultants 270 412 1,828 Total expense $ 10,571 $ 9,956 $ 7,203 The Company’s method of valuation for share-based awards is based on the Black-Scholes model. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. A description of the assumptions follows: • The expected stock price volatility assumption was determined by examining the historical volatilities of a group of industry peers, as well as taking into consideration the Company’s own historical volatility since its IPO in 2014. • The risk-free interest rate is based on the U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. • The expected term of the options granted represents the average period the stock options are expected to remain outstanding. The Company has elected to use the “simplified method” for estimating the expected term, which is calculated as the mid-point between the vesting period and the contractual term of the options. • The expected dividend yield assumption was based on the Company’s historical and expectation of dividend payouts. • Determination of the fair value of the shares of common stock underlying the stock options historically has been the responsibility of the Company’s board of directors. Subsequent to the IPO in April 2014, the fair value of common stock is determined based on the closing price of the NASDAQ Global Market exchange. As stock-based compensation expense recognized in the Consolidated Statement of Operations for fiscal years 2016 , 2015 , and 2014 is based on awards ultimately expected to vest, each has been reduced for estimated forfeitures, based on historical experience. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimated the fair value of employee stock options and ESPP shares on the date of grant using the Black-Scholes model with the following weighted-average assumptions: Years Ended December 31, 2016 2015 2014 Stock Options Expected price volatility 69% - 71% 68% - 80% 90% - 96% Risk-free interest rate 1.23% - 1.81% 1.37% - 1.95% 1.84% - 2.20% Expected term (in years) 5.50 - 6.25 5.50 - 6.25 6.75 - 7.00 Dividend yield — — — Years Ended December 31, 2016 2015 2014 Employee Stock Purchase Plan Expected price volatility 68% - 73% 56% - 62% 67% - 75% Risk-free interest rate 0.49% - 0.60% 0.07% - 0.41% 0.02% - 0.05% Expected term (in years) 0.50 0.50 0.50 Dividend yield — — — Stock-based compensation expense related to employee stock options for the years ended December 31, 2016 , 2015 , and 2014 was $9.3 million , $8.7 million , and $4.0 million , respectively. Stock-based compensation expense related to the ESPP plan for the years ended December 31, 2016 , 2015 , and 2014 was $0.3 million , $0.2 million , and $69,200 , respectively. Stock-based compensation expense related to restricted stock units was $0.5 million for the year ended December 31, 2016 , and zero for the years ended December 31, 2015 and 2014 . Non-Employee Stock-Based Compensation During the years ended December 31, 2016 , 2015 , and 2014 , the Company granted options to purchase 12,600 , zero , and 199,550 shares of common stock to consultants, respectively. These options are granted in exchange for consulting services to be rendered and are measured and recognized as the stock options are earned. Options issued during the year ended 2016 were granted to a member of the Company’s board of directors. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered. The Company estimated the fair value of non-employee stock options using the Black-Scholes model with the following weighted-average assumptions: Years Ended December 31, 2016 2015 2014 Expected price volatility 71% - 77% 76% - 82% 72% - 98% Risk-free interest rate 1.47% - 2.46% 1.84% - 2.26% 0.81% - 2.75% Expected term (in years) 7.00 - 9.75 8.00 - 9.00 3.25 - 10.00 Dividend yield — — — Compensation expense related to non-employee options for years ended December 31, 2016 , 2015 , and 2014 was approximately $0.5 million , $1.1 million , and $3.2 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income (loss) before provision for income tax is summarized as follows (in thousands): Year Ended December 31, 2016 2015 2014 United States $ (60,147 ) $ (57,074 ) $ 17,599 International (26 ) — (2 ) Total $ (60,173 ) $ (57,074 ) $ 17,597 The provision for income taxes is summarized as follows (in thousands): December 31, 2016 2015 2014 Current: Federal $ (116 ) $ (5,273 ) $ 7,367 State 1 1 7 Foreign — — — (115 ) (5,272 ) 7,374 Deferred: Federal — — — State — — — Foreign — — — — — — Provision (benefit) for income taxes $ (115 ) $ (5,272 ) $ 7,374 During 2014, the Company reduced its current Federal and state taxes payable by $1.6 million related to excess tax benefits from stock-based compensation, offsetting additional paid-in capital. There was no reduction related to excess tax benefits from stock-based compensation for the years ended December 31, 2016 and 2015 . The provision for income taxes differs from the amount computed by applying the federal income tax rate of 35% to pretax income (loss) from operations as a result of the following: December 31, 2016 2015 2014 Statutory federal income tax rate $ (21,079 ) $ (19,976 ) $ 6,159 State income taxes, net of federal tax benefits (9 ) 1 1 Warrants — — 344 Foreign rate differential 10 — 1 Tax credits (3,905 ) (8,303 ) (168 ) Net operating loss carryback — 4,099 — Change in statutory rates 624 — — Stock compensation (1,109 ) 821 302 State net operating losses 1,779 — — Other 109 1,330 (70 ) Change in valuation allowance 23,465 16,756 805 Income tax provision $ (115 ) $ (5,272 ) $ 7,374 Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2016 2015 Net operating loss carryforwards $ 29,102 $ 12,665 Research and development tax credits 14,453 8,652 Accruals and reserves 395 345 Stock compensation 6,902 5,341 Depreciation and amortization 1,765 2,149 Total deferred tax assets 52,617 29,152 Less: Valuation allowance (52,617 ) (29,152 ) Net deferred tax assets $ — $ — The deferred income tax assets have been fully offset by a valuation allowance, as realization is dependent on future earnings, if any, the timing and amount of which are uncertain. The net valuation allowance increased by $23.5 million and $18.9 million for the years ended December 31, 2016 and 2015 , respectively. The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company’s deferred tax assets, and the timing, likelihood, and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the deferred tax assets will be realized; accordingly, a full valuation allowance has been established and no deferred tax asset is shown in the accompanying balance sheets. As of December 31, 2016 and December 31, 2015 , the Company had federal net operating loss carryforwards of approximately $73.0 million and $25.0 million , respectively, available to reduce future taxable income. The Company also had state net operating loss carryforwards of approximately $61.8 million as of December 31, 2016 and December 31, 2015 . The federal net operating loss carryforward begins expiring in 2025, and the state net operating loss carryforward begins expiring in 2016, if not utilized. In the year ended December 31, 2016 , $7.6 million of California net operating loss carryforwards expired. The Company has federal research and development tax credit carryforwards of approximately $3.5 million . If not utilized, the carryforwards will begin expiring in 2024. The Company has state research and development credit carryforwards of approximately $2.7 million which do not expire. The Company also has orphan drug credit carryforwards of $9.7 million . Under federal and similar state tax statutes, changes in the Company’s ownership may limit its ability to use its available net operating loss and tax credit carryforwards. The annual limitation, as a result of a change of control, may result in the expiration of net operating losses and credits before utilization. The Company’s ability to use its remaining net operating loss and tax credit carryforwards may be further limited if the Company experiences a Section 382 ownership change in connection with future changes in its stock ownership. Uncertain Tax Positions The total amounts of unrecognized tax benefits for the years ended December 31, 2016 , 2015 , and 2014 were $3.2 million , $1.8 million , and $2.6 million , respectively. If recognized, none of the unrecognized tax benefits would affect the effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2016 2015 2014 Balance at the beginning of the year $ 1,820 $ 2,608 $ 2,270 Additions based on prior period tax positions 93 980 348 Additions based on current period tax positions 1,275 — — Reductions based on prior period tax positions — (1,768 ) (10 ) Balance at the end of the year $ 3,188 $ 1,820 $ 2,608 The Company’s policy is to account for interest and penalties as income tax expense. The Company accrued $11,000 of interest related to unrecognized tax benefits during the year ended December 31, 2014. The Company accrued no interest related to unrecognized tax benefits during the years ended December 31, 2016 and 2015 . Additionally, the interest accrued in 2014 of $11,000 was reversed due to the 2015 net operating loss carryback claim and refund. The Company files income tax returns in the U.S. federal jurisdiction, California, Virginia, New York, and India. The Company is subject to U.S. federal income tax examination for the calendar years ending 2001 through 2016 due to net operating losses that have been carried forward for tax purposes. Additionally, the Company is subject to state income tax examinations for the 2005 through 2016 calendar years due to net operating losses that are being carried forward for tax purposes. The Company is subject to audit by the Indian tax authorities from 2013 onward. The Company is not currently under audit in any major tax jurisdiction. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NET INCOME PER SHARE A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share is as follows (in thousands, except per share data): December 31, 2016 2015 2014 Historical net income (loss) per share Numerator: Net income (loss) $ (60,058 ) $ (51,802 ) $ 10,223 Noncumulative dividend on preferred stock — — (432 ) Undistributed earnings allocated to preferred stockholders — — (823 ) Basic net income (loss) attributable to common stockholders (60,058 ) (51,802 ) 8,968 Adjustment to net income (loss) for dilutive securities — — 101 Diluted net income (loss) attributable to common stockholders $ (60,058 ) $ (51,802 ) $ 9,069 Denominator: Basic common shares outstanding: Basic common shares outstanding: weighted average common shares outstanding 21,711 18,116 14,849 Less: weighted average unvested common shares subject to repurchase — (5 ) (12 ) Weighted average number of common shares used in calculating net income (loss) per share—basic 21,711 18,111 14,837 Dilutive securities: Common stock options — — 2,148 Warrants to purchase common stock — — 122 Weighted average number of common shares used in calculating net income (loss) per share—diluted 21,711 18,111 17,107 Net income (loss) per share attributable to common stockholders Basic $ (2.77 ) $ (2.86 ) $ 0.60 Diluted $ (2.77 ) $ (2.86 ) $ 0.53 The following shares of potentially dilutive securities were excluded from the computation of diluted net income (loss) per share of common stock for the periods presented, because including them would have been anti-dilutive (in thousands): December 31, 2016 2015 2014 Options to purchase common stock 5,523 5,249 441 Total 5,523 5,249 441 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following table represents certain unaudited quarterly information for the eight quarters ended December 31, 2016 . This data has been derived from unaudited consolidated financial statements that, in the opinion of the Company’s management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such information when read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto appearing elsewhere in this report. These operating results are not necessarily indicative of results for any future period (in thousands, except per share data): Year Ended December 31, 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 175 $ 222 $ 138 $ 37 Operating expenses 14,163 17,282 14,781 15,330 Net loss (13,828 ) (16,876 ) (14,394 ) (14,960 ) Net loss per share, basic and diluted (0.65 ) (0.78 ) (0.66 ) (0.68 ) Year Ended December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 226 $ 398 $ 768 $ 524 Operating expenses 12,452 14,551 15,763 16,587 Net loss (12,202 ) (14,051 ) (14,859 ) (10,690 ) (1) Net loss per share, basic and diluted (0.69 ) (0.78 ) (0.81 ) (0.58 ) (1) In the fourth quarter of 2015 the Company recorded an out-of-period correcting adjustment of $2.9 million to record an income tax benefit related to the carryback of a portion of the current year loss to obtain a tax refund from the prior year which was not properly accounted for in the interim periods of 2015. The Company has determined that the adjustment is not material to any current or interim periods. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, clinical trial accruals, fair value of assets and liabilities, income taxes, and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results may differ from those estimates. |
Liquidity and Financial Condition | Liquidity and Financial Condition To date, a substantial majority of the Company’s resources have been dedicated to the research and development of its products. The Company has not generated any commercial revenue from the sale of its products, and does not anticipate the generation of any commercial product revenue until it receives the necessary regulatory approval to launch one of its products. Based upon the current status of, and plans for, its product development and commercialization, the Company believes that the existing cash, cash equivalents, and investments of $ 135.9 million as of December 31, 2016 will be adequate to satisfy the Company’s capital needs through at least the next twelve months. However, the process of developing and commercializing products requires significant research and development, preclinical testing and clinical trials, manufacturing arrangements, as well as regulatory approvals. These activities, together with the Company’s general and administrative expenses, are expected to result in significant operating losses until the commercialization of the Company’s products or license agreements generate sufficient revenue to offset expenses. While the Company had net income during 2014, 2013, and 2012, it has not generated any commercial revenue from sales of its products. Under its license agreement with Allergan, the Company received the final milestone payment in 2014, and is not entitled to receive any royalties for net sales of Namzaric ® until mid-2020 and Namenda XR ® until mid-2018. To achieve sustained profitability, the Company, alone or with others, must successfully develop its product candidates, obtain required regulatory approvals, and successfully manufacture and market its products. |
Forward Stock Split | Forward Stock Split In March 2014, the Board of Directors of the Company and stockholders approved a forward stock split of the Company’s common and preferred stock. As a result, common and preferred stock, stock options, and warrants to purchase common and preferred stock were adjusted in the ratio of 2 :1, effective March 24, 2014. All common and preferred shares and per share amounts presented in these condensed consolidated financial statements for all periods have been retroactively adjusted to reflect the 2 -for-1 forward stock split. No fractional shares were issued. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities, when purchased, of less than three months. |
Investments | Investments The Company classifies its investments as “available-for-sale.” In general, these investments are free of trading restrictions. The Company carries these investments at fair value, based on quoted market prices or other readily available market information. Quoted market prices for U.S. government and corporate bonds include both principal and accrued interest components. Unrealized gains and losses are included in accumulated other comprehensive income, which is reflected as a separate component of stockholders’ equity in its Consolidated Balance Sheets. Gains and losses are recognized when realized in its Consolidated Statements of Income. When the Company determines that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in income. Gains and losses are determined using the specific identification method. The Company considers all marketable debt securities with a maturity of less than one year to be short-term investments, with all others considered to be long-term investments. All of the Company’s available-for-sale securities are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investments’ fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, extent of the loss related to credit of the issuer, the expected cash flows from the security, its intent to sell or hold the security, and whether or not the Company will be required to sell the security before the recovery of its amortized cost. |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. |
Segment | Segments In accordance with ASC 280-10-50, Segment Reporting, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company operates in one reportable segment: the development and commercialization of therapeutics targeting chronic disorders of the central nervous system. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when all four of the following criteria have been met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. Revenue under license arrangements is recognized based on the performance requirements of the contract. Determinations of whether persuasive evidence of an arrangement exists and whether delivery has occurred or services have been rendered are based on management’s judgments regarding the fixed nature of the fees charged for deliverables and the collectability of those fees. Should changes in conditions cause management to determine that these criteria are not met for any new or modified transactions, revenue recognized could be adversely affected. The Company generates revenue from collaboration and license agreements for the development and commercialization of products. Collaboration and license agreements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined objectives, and royalties on sales of commercialized products. The Company’s performance obligations under the collaboration and license agreements may include the license or transfer of intellectual property rights, obligations to provide research and development services and related materials, and obligations to participate on certain development and/or commercialization committees with the partners. For revenue agreements with multiple-element arrangements, the Company allocates revenue to each non-contingent element based on the relative-selling-price of each element in an arrangement. When applying the relative-selling-price method, the Company determines the selling price for each deliverable using the following estimation hierarchy: (i) vendor-specific objective evidence of fair value of the deliverable, if it exists, (ii) third-party evidence of selling price, if vendor-specific objective evidence is not available, or (iii) the vendor’s best estimate of selling price, if neither vendor-specific nor third-party evidence is available. Revenue allocated is then recognized when the four basic revenue recognition criteria, mentioned above, are met for each element. The Company recognizes payments that are contingent upon achievement of a substantive milestone in their entirety in the period in which the milestone is achieved. Milestones are defined as events that can only be achieved based on the Company’s performance and there is substantive uncertainty about whether the event will be achieved at the inception of the arrangement. Events that are contingent only on the passage of time or only on counterparty performance are not considered milestones subject to this guidance. Further, the amounts received must relate solely to prior performance, be reasonable relative to all of the deliverables and payment terms within the agreement and commensurate with the Company’s performance to achieve the milestone after commencement of the agreement. Amounts related to research and development funding and full-time equivalents assigned to the license agreement are recognized as the related services or activities are performed, in accordance with the contract terms. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents and short and long-term investments. Cash, cash equivalents, and investments are deposited with financial institutions or invested in security issuers that management believes are creditworthy. Deposits may, at times, exceed the amount of insurance provided on such deposits. To date, the Company has not experienced any losses on invested cash and cash equivalents. |
Risk and Uncertainties | Risk and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of results of clinical trials and reaching milestones, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships, and dependence on key individuals. Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary approvals. If the Company is denied approval, approval is delayed, or the Company is unable to maintain approval, it could have a materially adverse impact on the Company. The Company has expended and will continue to expend substantial funds to conduct research, development, and clinical testing of its product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to conduct research and development activities and commercialize its products. Additional funds may not be available on acceptable terms, if at all. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs or alter its product commercialization plans, which may materially and adversely affect its business, financial condition, and operations. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally between three and ten years . Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease, which is five years . Maintenance and repairs are charged to expense as incurred, and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized. |
Leases | Leases At the inception of a lease, the Company evaluates the lease agreement to determine whether the lease is an operating, capital or build-to-suit lease using the criteria in ASC 840, “Leases.” Certain lease agreements also require the Company to make additional payments for taxes, insurance, and other operating expenses incurred during the lease period, which are expensed as incurred. For operating leases, the Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred liability. Where lease agreements contain rent escalation clauses, rent abatements and/or concessions, such as rent holidays and tenant improvement allowances, the Company applies them in the determination of straight-line expense over the lease term. |
Accounting for Long-Lived Assets | Accounting for Long-Lived Assets The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by the comparison of the carrying amount to the future net cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. |
Clinical Trial Accruals | Clinical Trial Accruals The Company’s clinical trial accruals are based on estimates of patient enrollment and related costs at clinical investigator sites as well as estimates for the services received and efforts expended pursuant to contracts with multiple research institutions and clinical research organizations (“CROs”) that conduct and manage clinical trials on the Company’s behalf. The Company estimates clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage clinical trials on its behalf. In accruing service fees, the Company obtains the reported level of patient enrollment at each site and estimates the time period over which services are to be performed and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. |
Research and Development | Research and Development Research and development (“R&D”) expenses include salaries and related compensation, contractor and consultant fees, external clinical trial expenses performed by contract research organizations (“CRO”), licensing fees, acquired intellectual property with no alternative future use, and facility and administrative expense allocations. In addition, the Company funds R&D at research institutions under agreements that are generally cancelable at its option. Research costs typically consist of applied research and preclinical and toxicology work. Pharmaceutical manufacturing development costs consist of product formulation, chemical analysis, and the transfer and scale-up of manufacturing at facilities operated by the Company’s contract manufacturers. Clinical development costs include the costs of Phase 1, Phase 2, and Phase 3 clinical trials. These costs are a significant component of the Company’s research and development expenses. The Company accrues costs for clinical trial activities performed by contract research organizations and other third parties based upon the estimated amount of work completed on each study as provided by the CRO. These estimates are reviewed for reasonableness by the Company’s internal clinical personnel, and the Company aims to match the accrual to actual services performed by the organizations as determined by patient enrollment levels and related activities. The Company monitors patient enrollment levels and related activities using available information; however, if the Company underestimates activity levels associated with various studies at a given point in time, the Company could be required to record significant additional R&D expenses in future periods when the actual activity level becomes known. The Company charges all such costs to R&D expenses. Non-refundable advance payments are capitalized and expensed as the related goods are delivered or services are performed. |
Convertible Preferred Stock.. | Convertible Preferred Stock The Company classifies the convertible preferred stock as temporary equity on the balance sheets due to certain change of control events that are outside the Company’s control, including liquidation, sale, or transfer of the Company, as holders of the convertible preferred stock could have caused redemption of the shares. Shares of convertible preferred stock were converted to common stock upon close of the IPO in April 2014. |
Convertible Preferred Stock Warrants | Convertible Preferred Stock Warrants The Company accounts for its convertible preferred stock warrants as a liability based upon the characteristics and provisions of each instrument. Convertible preferred stock warrants classified as a liability are recorded on the Company’s balance sheet at their fair value on the date of issuance and were revalued on each subsequent balance sheet, with fair value changes recognized as increases or reductions in the statements of operations. The Company adjusted the liability for changes in fair value of these warrants until the earlier of: (i) exercise of warrants, (ii) expiration of warrants, (iii) a change of control of the Company, or (iv) the closing of the Company’s IPO. At those times, the convertible preferred stock warrant liability was adjusted to fair value in the condensed consolidated statements of operations and comprehensive income and, upon the closing of the Company’s IPO in April 2014, the final fair value was reclassified to additional paid-in capital. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, short-term investments, accounts receivable, long-term investments and other current assets, other assets, accounts payable, accrued liabilities approximate fair value due to the short-term nature or determinable value of these items. The fair value of convertible preferred stock warrants is determined using readily available market information. See also Note 4 for further details of the Company’s fair value instruments. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company follows the provisions of ASC 740, Income Taxes, under which it assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. |
Basic and Diluted Net Income (Loss) Per Share | Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents are options granted under the Company’s stock awards plans and are calculated under the treasury stock method. Common equivalent shares from unexercised stock options, unvested restricted stock units, and convertible preferred stock warrants are excluded from the computation when there is a loss as their effect is anti-dilutive, or if the exercise price of such options is greater than the average market price of the stock for the period. Prior to April 10, 2014, the Company calculated its basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. Under the two-class method, the Company determined whether it had net income attributable to common stockholders, which includes the results of operations less current period convertible preferred stock non-cumulative dividends. If it was determined that the Company had net income attributable to common stockholders during a period, the related undistributed earnings were then allocated between common stock and the convertible preferred stock based on the weighted average number of shares outstanding during the period to determine the numerator for the basic net income per share attributable to common stockholders. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities to determine the numerator for the diluted net income per share attributable to common stockholders. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation of stock options granted to employees and directors and for employee stock purchase plan shares by estimating the fair value of stock-based awards using the Black-Scholes option-pricing model. The Company accounts for stock-based compensation of restricted stock units granted to employees based on the closing price of the Company’s common stock on the date of grant. The fair value of stock-based awards are recognized and amortized over the applicable vesting period. All stock options awarded to non-employees are accounted for at the fair value of the consideration received or the fair value of the equity instrument issued, as calculated using the Black-Scholes model. Stock options granted to non-employees are subject to periodic revaluation at each reporting date as the underlying equity instruments vest. In order to estimate the value of share-based awards, the Company uses the Black-Scholes model, which requires the use of certain subjective assumptions. The most significant subjective assumptions are management’s estimates of the expected volatility and the expected term of the award. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from any of these estimates, stock-based compensation expense and the Company’s results of operations could be materially impacted. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . The amendment in this ASU provides guidance on the revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The core principle of this update provides guidance to identify the performance obligations under the contract(s) with a customer and how to allocate the transaction price to the performance obligations in the contract. It further provides guidance to recognize revenue when (or as) the entity satisfies a performance obligation. This standard will replace most existing revenue recognition guidance. On July 9, 2015, the FASB approved a one-year deferral of the effective date of this standard to 2018 for public companies, with an option that would permit companies to adopt the standard as early as the original effective date of 2017. Early adoption prior to the original effective date is not permitted. Since the issuance of ASU 2014-09, the FASB has issued several amendments which clarify certain points, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , ASU 2016-10, Identifying Performance Obligations and Licensing , ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting , and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients. The Company plans to adopt the new standard in the first quarter of fiscal year 2018. The Company is currently evaluating the method of adoption and effect the new guidance will have on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . This ASU provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a Company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about the company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendments in this update are effective for annual periods ending after December 15, 2016, and for interim periods within annual periods beginning after December 15, 2016 with early adoption permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . Under ASU 2015-17, a reporting entity is required to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. Current guidance requiring the offsetting of deferred tax assets and liabilities of a tax-paying component of an entity and presentation as a single noncurrent amount is not affected. This ASU is effective for public business entities issuing financial statements for the annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for financial statements as of the beginning of an interim or annual reporting period. Entities may apply the update prospectively to all deferred tax assets and liabilities and taxes, or retrospectively for all periods presented. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The authoritative guidance significantly amends the current accounting for leases. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) a financing lease or (ii) an operating lease. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases. For sale leaseback transactions, a sale will only be recognized if the criteria in the new revenue recognition standard are met. For public business entities, this guidance is effective for fiscal periods beginning after December 15, 2018 and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the effect the new guidance will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation . The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. The Company adopted ASU No. 2016-09 in the fourth quarter of fiscal 2016 and the implementation of this standard did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments. The new guidance changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect the new guidance will have on its consolidated financial statements. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets (in thousands) December 31, 2016 2015 Income tax receivable $ 168 $ 4,293 Prepaid expenses 1,279 545 Prepaid clinical trial 37 255 Other current assets 1,057 15 Prepaid expenses and other current assets $ 2,541 $ 5,108 |
Schedule of property and equipment, net | Property and equipment, net (in thousands) December 31, 2016 2015 Computer equipment and software $ 2,128 $ 869 Equipment 252 62 Furniture and fixtures 466 429 Leasehold improvements 1,645 1,619 4,491 2,979 Less: Accumulated depreciation and amortization (1,335 ) (626 ) Property and equipment, net $ 3,156 $ 2,353 |
Schedule of accrued liabilities | Accrued liabilities (in thousands) December 31, 2016 2015 Accrued salaries and related benefit expenses $ 3,696 $ 3,372 Clinical trial accruals 1,041 4,097 Accrued consulting and other professional fees 864 749 Income and other taxes 37 53 Other 229 186 Accrued liabilities $ 5,867 $ 8,457 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for the Company’s financial assets and liabilities which require fair value measurement on a recurring basis | The following table represents the fair value hierarchy for the Company’s financial assets and liabilities which require fair value measurement on a recurring basis (in thousands): Fair Value Measurements at December 31, 2016 Total Level 1 Level 2 Level 3 Assets Money market $ 192 $ 192 $ — $ — Corporate debt 51,233 — 51,233 — U.S. Treasury notes 60,976 — 60,976 — Total assets measured at fair value $ 112,401 $ 192 $ 112,209 $ — Fair Value Measurements at December 31, 2015 Total Level 1 Level 2 Level 3 Assets Money market $ 23,430 $ 23,430 $ — $ — Corporate debt 56,787 — 56,787 — U.S. Treasury notes 30,069 — 30,069 — Total assets measured at fair value $ 110,286 $ 23,430 $ 86,856 $ — |
Roll forward of the financial instruments classified within Level 3 of the fair value hierarchy | The following table includes a roll forward of the financial instruments classified within Level 3 of the fair value hierarchy (in thousands): Fair Value Using Level 3 Inputs Convertible Preferred Stock Warrant Liability Balance at December 31, 2013 $ 6,232 Change in fair value recorded in Other (income) expense, net 983 Exercise of warrants (7,215 ) Balance at December 31, 2014 — Balance at December 31, 2015 — Balance at December 31, 2016 $ — |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of amortized cost, unrealized gain and loss and the fair value of available-for-sale securities | The following table is a summary of amortized cost, unrealized gain and loss, and the fair value of available-for-sale securities as of December 31, 2016 and 2015 (in thousands): December 31, 2016 Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value Investments: Corporate debt $ 51,354 $ — $ (121 ) $ 51,233 U.S. Treasury notes 61,048 5 (77 ) 60,976 Total $ 112,402 $ 5 $ (198 ) $ 112,209 Reported as: Short-term investments $ 90,050 $ 1 $ (134 ) $ 89,917 Long-term investments 22,352 4 (64 ) 22,292 Total $ 112,402 $ 5 $ (198 ) $ 112,209 December 31, 2015 Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value Investments: Corporate debt $ 56,892 $ — $ (105 ) $ 56,787 U.S. Treasury notes 30,122 1 (54 ) 30,069 Total $ 87,014 $ 1 $ (159 ) $ 86,856 Reported as: Short-term investments $ 73,817 $ 1 $ (127 ) $ 73,691 Long-term investments 13,197 — (32 ) 13,165 Total $ 87,014 $ 1 $ (159 ) $ 86,856 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under a non-cancelable facility operating lease | As of December 31, 2016 , future minimum lease payments under the non-cancelable facility operating lease were as follows (in thousands): December 31, 2016 2017 $ 614 2018 634 2019 653 2020 224 2021 — Thereafter — Total $ 2,125 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of convertible preferred stock | At December 31, 2013, the convertible preferred stock consisted of the below (in thousands except share and per share data). The fair value was approximately $ 27.9 million upon completion of the IPO. Shares Per Share Liquidation Preference Carrying Value Series Authorized Outstanding Series AA 5,000,000 3,431,620 $ 3.81 $ 6,521 Series AA-1 1,700,000 1,287,554 50.00 12,628 6,700,000 4,719,174 $ 19,149 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of shares of Company's common stock reserved for future issuance | Shares of Company’s common stock reserved for future issuance are as follows: December 31, 2016 December 31, 2015 Common stock awards issued and outstanding 5,483,557 5,328,378 Authorized for future issuance under 2014 Equity Incentive Plan 1,576,926 1,463,415 Authorized for future issuance under 2016 Inducement Plan 334,062 — Employee stock purchase plan 532,849 394,148 Total 7,927,394 7,185,941 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Option Plans | |
Schedule of activity under the company's stock option plans | The stock option and related activity under all of the Company’s stock compensation plans is summarized as follows: Outstanding Options Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (thousands) Number of Shares Weighted Average Exercise Price Stock Options Balances, December 31, 2015 5,328,378 $ 8.57 Options granted 1,042,975 14.75 Options exercised (586,956 ) 5.18 Options forfeited (436,672 ) 13.85 Options expired (77,529 ) 17.70 Balances, December 31, 2016 5,270,196 $ 9.60 7.06 $ 39,744 Vested and expected to vest, December 31, 2016 5,123,793 $ 9.49 7.03 $ 39,182 Vested, December 31, 2016 3,178,726 $ 7.12 6.25 $ 31,719 |
Summary of information about stock options | The options outstanding and exercisable by exercise price at December 31, 2016 is summarized as follows: Options Outstanding Options Exercisable Weighted- Average Remaining Life (in years) Weighted- Average Exercise Price Weighted- Average Exercise Price Number of Shares Number of Shares Range of Exercise Prices $0.00 - 0.99 1,136,066 4.94 $ 0.67 1,136,066 $ 0.67 $1.00 - 8.99 538,052 5.02 2.71 538,052 2.71 $9.00 - 10.99 1,402,600 7.13 9.00 1,402,600 9.00 $11.00 - 16.99 1,049,597 8.87 14.45 268,046 14.74 $17.00 - 26.22 1,143,881 8.41 17.99 506,035 18.14 5,270,196 7.06 $ 9.60 3,850,799 $ 7.26 |
Schedule of restricted stock unit and related activity | The restricted stock unit and related activity under all of the Company’s stock compensation plans is summarized as follows: Outstanding Units Weighted-Average Restricted Stock Units Number of Shares Unvested, December 31, 2015 — $ — Granted 229,561 14.59 Vested — — Forfeited (16,200 ) 13.66 Unvested, December 31, 2016 213,361 $ 14.66 |
Schedule of allocation of total stock-based compensation expense | The following table reflects stock-based compensation expense recognized for the years ended December 31, 2016 , 2015 , and 2014 (in thousands): Years Ended December 31, 2016 2015 2014 Research and development: Employees $ 2,645 $ 2,492 $ 1,157 Non-employee consultants 210 664 1,331 General and administrative: Employees 7,446 6,388 2,887 Non-employee consultants 270 412 1,828 Total expense $ 10,571 $ 9,956 $ 7,203 |
Employee Stock Options | |
Stock Option Plans | |
Schedule of assumptions used to estimate fair value of stock options | The Company estimated the fair value of employee stock options and ESPP shares on the date of grant using the Black-Scholes model with the following weighted-average assumptions: Years Ended December 31, 2016 2015 2014 Stock Options Expected price volatility 69% - 71% 68% - 80% 90% - 96% Risk-free interest rate 1.23% - 1.81% 1.37% - 1.95% 1.84% - 2.20% Expected term (in years) 5.50 - 6.25 5.50 - 6.25 6.75 - 7.00 Dividend yield — — — |
Employee Stock Purchase Plan | |
Stock Option Plans | |
Schedule of assumptions used to estimate fair value of stock options | Years Ended December 31, 2016 2015 2014 Employee Stock Purchase Plan Expected price volatility 68% - 73% 56% - 62% 67% - 75% Risk-free interest rate 0.49% - 0.60% 0.07% - 0.41% 0.02% - 0.05% Expected term (in years) 0.50 0.50 0.50 Dividend yield — — — |
Non-employees stock options | |
Stock Option Plans | |
Schedule of assumptions used to estimate fair value of stock options | The Company estimated the fair value of non-employee stock options using the Black-Scholes model with the following weighted-average assumptions: Years Ended December 31, 2016 2015 2014 Expected price volatility 71% - 77% 76% - 82% 72% - 98% Risk-free interest rate 1.47% - 2.46% 1.84% - 2.26% 0.81% - 2.75% Expected term (in years) 7.00 - 9.75 8.00 - 9.00 3.25 - 10.00 Dividend yield — — — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Summary of income before provision for income tax | Income (loss) before provision for income tax is summarized as follows (in thousands): Year Ended December 31, 2016 2015 2014 United States $ (60,147 ) $ (57,074 ) $ 17,599 International (26 ) — (2 ) Total $ (60,173 ) $ (57,074 ) $ 17,597 |
Summary of income tax provision | The provision for income taxes is summarized as follows (in thousands): December 31, 2016 2015 2014 Current: Federal $ (116 ) $ (5,273 ) $ 7,367 State 1 1 7 Foreign — — — (115 ) (5,272 ) 7,374 Deferred: Federal — — — State — — — Foreign — — — — — — Provision (benefit) for income taxes $ (115 ) $ (5,272 ) $ 7,374 |
Schedule showing the difference of provision for income taxes from the amount computed by applying the federal income tax rate of 35% to pretax income from operations | The provision for income taxes differs from the amount computed by applying the federal income tax rate of 35% to pretax income (loss) from operations as a result of the following: December 31, 2016 2015 2014 Statutory federal income tax rate $ (21,079 ) $ (19,976 ) $ 6,159 State income taxes, net of federal tax benefits (9 ) 1 1 Warrants — — 344 Foreign rate differential 10 — 1 Tax credits (3,905 ) (8,303 ) (168 ) Net operating loss carryback — 4,099 — Change in statutory rates 624 — — Stock compensation (1,109 ) 821 302 State net operating losses 1,779 — — Other 109 1,330 (70 ) Change in valuation allowance 23,465 16,756 805 Income tax provision $ (115 ) $ (5,272 ) $ 7,374 |
Schedule of significant components of the Company's deferred tax assets | Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2016 2015 Net operating loss carryforwards $ 29,102 $ 12,665 Research and development tax credits 14,453 8,652 Accruals and reserves 395 345 Stock compensation 6,902 5,341 Depreciation and amortization 1,765 2,149 Total deferred tax assets 52,617 29,152 Less: Valuation allowance (52,617 ) (29,152 ) Net deferred tax assets $ — $ — |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2016 2015 2014 Balance at the beginning of the year $ 1,820 $ 2,608 $ 2,270 Additions based on prior period tax positions 93 980 348 Additions based on current period tax positions 1,275 — — Reductions based on prior period tax positions — (1,768 ) (10 ) Balance at the end of the year $ 3,188 $ 1,820 $ 2,608 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerator and denominator used in calculation of basic and diluted net income (loss) per share | A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share is as follows (in thousands, except per share data): December 31, 2016 2015 2014 Historical net income (loss) per share Numerator: Net income (loss) $ (60,058 ) $ (51,802 ) $ 10,223 Noncumulative dividend on preferred stock — — (432 ) Undistributed earnings allocated to preferred stockholders — — (823 ) Basic net income (loss) attributable to common stockholders (60,058 ) (51,802 ) 8,968 Adjustment to net income (loss) for dilutive securities — — 101 Diluted net income (loss) attributable to common stockholders $ (60,058 ) $ (51,802 ) $ 9,069 Denominator: Basic common shares outstanding: Basic common shares outstanding: weighted average common shares outstanding 21,711 18,116 14,849 Less: weighted average unvested common shares subject to repurchase — (5 ) (12 ) Weighted average number of common shares used in calculating net income (loss) per share—basic 21,711 18,111 14,837 Dilutive securities: Common stock options — — 2,148 Warrants to purchase common stock — — 122 Weighted average number of common shares used in calculating net income (loss) per share—diluted 21,711 18,111 17,107 Net income (loss) per share attributable to common stockholders Basic $ (2.77 ) $ (2.86 ) $ 0.60 Diluted $ (2.77 ) $ (2.86 ) $ 0.53 |
Schedule of outstanding shares of potentially dilutive securities excluded from the computation of diluted net income per share of common stock, because including them would have been anti-dilutive | The following shares of potentially dilutive securities were excluded from the computation of diluted net income (loss) per share of common stock for the periods presented, because including them would have been anti-dilutive (in thousands): December 31, 2016 2015 2014 Options to purchase common stock 5,523 5,249 441 Total 5,523 5,249 441 |
Quarterly Financial Informati32
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly information | These operating results are not necessarily indicative of results for any future period (in thousands, except per share data): Year Ended December 31, 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 175 $ 222 $ 138 $ 37 Operating expenses 14,163 17,282 14,781 15,330 Net loss (13,828 ) (16,876 ) (14,394 ) (14,960 ) Net loss per share, basic and diluted (0.65 ) (0.78 ) (0.66 ) (0.68 ) Year Ended December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 226 $ 398 $ 768 $ 524 Operating expenses 12,452 14,551 15,763 16,587 Net loss (12,202 ) (14,051 ) (14,859 ) (10,690 ) (1) Net loss per share, basic and diluted (0.69 ) (0.78 ) (0.81 ) (0.58 ) (1) In the fourth quarter of 2015 the Company recorded an out-of-period correcting adjustment of $2.9 million to record an income tax benefit related to the carryback of a portion of the current year loss to obtain a tax refund from the prior year which was not properly accounted for in the interim periods of 2015. The Company has determined that the adjustment is not material to any current or interim periods. |
Description of Business (Detail
Description of Business (Details) $ / shares in Units, $ in Thousands | Jan. 06, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($)subsidiaryproduct$ / sharesshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)shares |
Initial Public Offering [Line Items] | ||||
Number of developed medicines | product | 2 | |||
Share price (in dollars per share) | $ 16.90 | |||
Proceeds from public offerings, net of offering costs | $ | $ 61,822 | $ 9,657 | $ 42,632 | |
Number of subsidiaries | subsidiary | 4 | |||
Stock options | ||||
Initial Public Offering [Line Items] | ||||
Share price (in dollars per share) | $ 16.90 | |||
Common Stock | ||||
Initial Public Offering [Line Items] | ||||
Common stock shares sold | shares | 2,875,000 | 2,875,000 | 3,081,371 | |
Share price (in dollars per share) | $ 23 | |||
Proceeds from public offerings, net of offering costs | $ | $ 61,800 | |||
Common Stock | Stock options | Underwriters | ||||
Initial Public Offering [Line Items] | ||||
Common stock shares sold | shares | 375,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Forward Stock Split (Details) $ in Millions | Mar. 24, 2014 | Dec. 31, 2016USD ($) |
Accounting Policies [Abstract] | ||
Cash, cash equivalents and investments | $ 135.9 | |
Convertible Preferred And Common Stock Warrant | ||
Stock split ratio | ||
Stock split ratio | 2 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Segments (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Risk and Uncertainties (Details) | 12 Months Ended |
Dec. 31, 2016program | |
Accounting Policies [Abstract] | |
Number of research or development programs which the Company may have to delay or reduce the scope | 1 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Leasehold improvements | |
Property and Equipment | |
Estimated useful lives of the assets | 5 years |
Minimum | |
Property and Equipment | |
Estimated useful lives of the assets | 3 years |
Maximum | |
Property and Equipment | |
Estimated useful lives of the assets | 10 years |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Prepaid expenses and other current assets | |||
Income tax receivable | $ 168 | $ 4,293 | |
Prepaid expenses | 1,279 | 545 | |
Prepaid clinical trial | 37 | 255 | |
Other current assets | 1,057 | 15 | |
Prepaid expenses and other current assets | 2,541 | 5,108 | |
Property and equipment, gross | 4,491 | 2,979 | |
Less: Accumulated depreciation and amortization | (1,335) | (626) | |
Property and equipment, net | 3,156 | 2,353 | |
Depreciation expense | 808 | 435 | $ 155 |
Accrued liabilities | |||
Accrued salaries and related benefit expenses | 3,696 | 3,372 | |
Clinical trial accruals | 1,041 | 4,097 | |
Accrued consulting and other professional fees | 864 | 749 | |
Income and other taxes | 37 | 53 | |
Other | 229 | 186 | |
Accrued liabilities | 5,867 | 8,457 | |
Computer equipment and software | |||
Prepaid expenses and other current assets | |||
Property and equipment, gross | 2,128 | 869 | |
Equipment | |||
Prepaid expenses and other current assets | |||
Property and equipment, gross | 252 | 62 | |
Furniture and fixtures | |||
Prepaid expenses and other current assets | |||
Property and equipment, gross | 466 | 429 | |
Leasehold improvements | |||
Prepaid expenses and other current assets | |||
Property and equipment, gross | $ 1,645 | $ 1,619 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair value measurement on a recurring basis | ||
Assets | $ 112,401 | $ 110,286 |
Level 1 | ||
Fair value measurement on a recurring basis | ||
Assets | 192 | 23,430 |
Level 2 | ||
Fair value measurement on a recurring basis | ||
Assets | 112,209 | 86,856 |
Level 3 | ||
Fair value measurement on a recurring basis | ||
Assets | 0 | 0 |
Money market | ||
Fair value measurement on a recurring basis | ||
Assets | 192 | 23,430 |
Money market | Level 1 | ||
Fair value measurement on a recurring basis | ||
Assets | 192 | 23,430 |
Money market | Level 2 | ||
Fair value measurement on a recurring basis | ||
Assets | 0 | 0 |
Money market | Level 3 | ||
Fair value measurement on a recurring basis | ||
Assets | 0 | 0 |
Corporate debt | ||
Fair value measurement on a recurring basis | ||
Assets | 51,233 | 56,787 |
Corporate debt | Level 1 | ||
Fair value measurement on a recurring basis | ||
Assets | 0 | 0 |
Corporate debt | Level 2 | ||
Fair value measurement on a recurring basis | ||
Assets | 51,233 | 56,787 |
Corporate debt | Level 3 | ||
Fair value measurement on a recurring basis | ||
Assets | 0 | 0 |
U.S. Treasury notes | ||
Fair value measurement on a recurring basis | ||
Assets | 60,976 | 30,069 |
U.S. Treasury notes | Level 1 | ||
Fair value measurement on a recurring basis | ||
Assets | 0 | 0 |
U.S. Treasury notes | Level 2 | ||
Fair value measurement on a recurring basis | ||
Assets | 60,976 | 30,069 |
U.S. Treasury notes | Level 3 | ||
Fair value measurement on a recurring basis | ||
Assets | $ 0 | $ 0 |
Fair Value Measurements - Rollf
Fair Value Measurements - Rollforward of Level 3 financial instruments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Transfers Between Level 1 and Level 2, Description and Policy [Abstract] | |||
Fair vale Level 1 and 2 transfers | $ 0 | $ 0 | |
Fair vale Level 2 and 1 transfers | 0 | 0 | |
Warrants to purchase convertible preferred stock | |||
Roll forward of the financial instruments classified within Level 3 of the fair value hierarchy | |||
Balance at the beginning of the period | $ 6,232,000 | ||
Change in fair value recorded in Other (income) expense, net | 983,000 | ||
Exercise of warrants | (7,215,000) | ||
Balance at the end of the period | 0 | ||
Balance at the end of the period | $ 6,232,000 | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale securities | ||
Amortized Cost | $ 112,402 | $ 87,014 |
Gross Unrealized Gains | 5 | 1 |
Gross Unrealized Losses | (198) | (159) |
Fair Value | 112,209 | 86,856 |
Short-term investments | ||
Available-for-sale securities | ||
Amortized Cost | 90,050 | 73,817 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (134) | (127) |
Fair Value | 89,917 | 73,691 |
Accrued interest | 300 | 400 |
Long-term investments | ||
Available-for-sale securities | ||
Amortized Cost | 22,352 | 13,197 |
Gross Unrealized Gains | 4 | |
Gross Unrealized Losses | (64) | (32) |
Fair Value | 22,292 | 13,165 |
Accrued interest | $ 100 | 36 |
Long-term investments | Minimum | ||
Available-for-sale securities | ||
Maturity range of long term investment | 12 months | |
Long-term investments | Maximum | ||
Available-for-sale securities | ||
Maturity range of long term investment | 16 months | |
Corporate debt | ||
Available-for-sale securities | ||
Amortized Cost | $ 51,354 | 56,892 |
Gross Unrealized Losses | (121) | (105) |
Fair Value | 51,233 | 56,787 |
U.S. Treasury notes | ||
Available-for-sale securities | ||
Amortized Cost | 61,048 | 30,122 |
Gross Unrealized Gains | 5 | 1 |
Gross Unrealized Losses | (77) | (54) |
Fair Value | $ 60,976 | $ 30,069 |
License Agreements (Details)
License Agreements (Details) $ in Millions | Nov. 30, 2012USD ($) | Dec. 31, 2014USD ($) | May 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2016USD ($)deliverableitemcomponent |
Collaboration and License Agreements | |||||
Final milestone payment received | $ 30 | ||||
Period describing the commercial launch of dose | 15 years | ||||
License agreement | |||||
Collaboration and License Agreements | |||||
Upfront payment received | $ 65 | ||||
Maximum total additional cash payments receivable upon achievement of certain development and regulatory milestones | 95 | ||||
Prosecution and litigation cost | $ 2.4 | ||||
Number of non-contingent performance deliverables | deliverable | 2 | ||||
Number of components of intellectual property rights accounted for as a single unit of accounting | component | 2 | ||||
Amount of consideration for non-contingent performance deliverables | $ 0 | ||||
Number of units of accounting | item | 2 | ||||
Amount of upfront license fee allocated to transfer of license and technical know-how | $ 65 | ||||
Total milestone payments received | $ 40 | ||||
Additional milestone payment received | $ 25 |
Warrants to Purchase Common o43
Warrants to Purchase Common or Preferred Stock (Details) - USD ($) $ in Millions | 1 Months Ended | 4 Months Ended | ||||
Jul. 31, 2015 | Apr. 30, 2014 | Apr. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warrants to Purchase Common or Preferred Stock | ||||||
Number of warrants exercised (in shares) | 7,116 | |||||
Expenses recorded | $ 1 | |||||
Common Stock | ||||||
Warrants to Purchase Common or Preferred Stock | ||||||
Warrants exercised for total issuance of shares (in shares) | 199,837 | |||||
Warrants exercised for common stock (in shares) | 3,484 | |||||
Warrants to purchase convertible preferred stock | ||||||
Warrants to Purchase Common or Preferred Stock | ||||||
Issue of warrants to purchase shares (in shares) | 758,994 | |||||
Number of warrants outstanding (in shares) | 0 | 0 | ||||
Warrants to purchase common stock | ||||||
Warrants to Purchase Common or Preferred Stock | ||||||
Issue of warrants to purchase shares (in shares) | 127,780 | 206,162 | ||||
Number of warrants outstanding (in shares) | 0 | 7,116 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||
Lease agreement square footage | ft² | 18,500 | ||
Future minimum lease payments under non-cancelable facility operating leases | |||
2,017 | $ 614 | ||
2,018 | 634 | ||
2,019 | 653 | ||
2,020 | 224 | ||
2,021 | 0 | ||
Thereafter | 0 | ||
Total | 2,125 | ||
Rent expense | $ 625 | $ 628 | $ 277 |
Commitments and Contingencies45
Commitments and Contingencies - Litigation (Details) | 12 Months Ended |
Dec. 31, 2016defendantclaim | |
Loss Contingencies [Line Items] | |
Number of claims | claim | 0 |
Namenda XR | |
Loss Contingencies [Line Items] | |
Number of defendants not entered into settlement agreements | defendant | 1 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 15, 2014 | Dec. 31, 2013 |
Convertible preferred stock | |||||
Convertible Preferred Stock | |||||
Authorized Shares | 5,000,000 | 6,700,000 | |||
Outstanding Shares | 0 | 0 | 4,719,174 | ||
Fair value of convertible of preferred stock | $ 27,900 | ||||
Carrying Value | $ 0 | $ 0 | $ 0 | $ 19,149 | |
Series AA | |||||
Convertible Preferred Stock | |||||
Authorized Shares | 5,000,000 | ||||
Outstanding Shares | 3,431,620 | ||||
Per Share Liquidation Preference (in dollars per share) | $ 3.81 | ||||
Carrying Value | $ 6,521 | ||||
Series AA-1 | |||||
Convertible Preferred Stock | |||||
Authorized Shares | 1,700,000 | ||||
Outstanding Shares | 1,287,554 | ||||
Per Share Liquidation Preference (in dollars per share) | $ 50 | ||||
Carrying Value | $ 12,628 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Dec. 31, 2016vote$ / sharesshares | Jan. 06, 2016USD ($)$ / sharesshares | Jun. 01, 2015USD ($) | May 31, 2014USD ($)shares | Apr. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2016USD ($)vote$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Sep. 30, 2016$ / shares | Mar. 31, 2016shares |
Shareholders' Equity | ||||||||||
Authorized shares of common stock | 100,000,000 | 100,000,000 | 100,000,000 | |||||||
Dividends declared | $ | $ 0 | |||||||||
Number of votes per share | vote | 1 | 1 | ||||||||
Total shares of common stock sold | 22,013,644 | 3,000,000 | 22,013,644 | 18,505,462 | ||||||
Proceeds from public offering of common stock, net of underwriting discounts | $ | $ 1,200,000 | $ 41,400,000 | ||||||||
Underwriting discount and commissions | $ | $ 91,000 | 3,400,000 | ||||||||
Shares issuance expenses | $ | $ 3,200,000 | |||||||||
Share price (in dollars per share) | $ / shares | $ 16.90 | $ 16.90 | ||||||||
Gross proceeds | $ | $ 61,822,000 | $ 9,657,000 | $ 42,632,000 | |||||||
Total common stock reserved for future issuance (in shares) | 7,927,394 | 7,927,394 | 7,185,941 | |||||||
2016 Inducement Plan | ||||||||||
Shareholders' Equity | ||||||||||
Total common stock reserved for future issuance (in shares) | 450,000 | |||||||||
Employee Stock Purchase Plan | ||||||||||
Shareholders' Equity | ||||||||||
Total common stock reserved for future issuance (in shares) | 532,849 | 532,849 | 394,148 | |||||||
Controlled Equity Offering | ||||||||||
Shareholders' Equity | ||||||||||
Common stock shares sold | 509,741 | 0 | ||||||||
Share price (in dollars per share) | $ / shares | $ 20.04 | |||||||||
Gross proceeds | $ | $ 9,700,000 | |||||||||
Value of shares authorized (up to) | $ | $ 25,000,000 | |||||||||
Controlled Equity Offering | Cantor | ||||||||||
Shareholders' Equity | ||||||||||
Commission of sale proceeds | 3.00% | |||||||||
Common Stock | ||||||||||
Shareholders' Equity | ||||||||||
Public offering price (in dollars per share) | $ / shares | $ 16 | |||||||||
Convertible preferred stock converted into common stock (in shares) | 4,003,225 | 4,003,225 | ||||||||
Common stock shares sold | 2,875,000 | 2,875,000 | 3,081,371 | |||||||
Share price (in dollars per share) | $ / shares | $ 23 | |||||||||
Gross proceeds | $ | $ 61,800,000 | |||||||||
Stock options | ||||||||||
Shareholders' Equity | ||||||||||
Unvested shares of common stock from early exercised options | 0 | 0 | 3,000 | |||||||
Share price (in dollars per share) | $ / shares | $ 16.90 | $ 16.90 | ||||||||
Total common stock reserved for future issuance (in shares) | 5,483,557 | 5,483,557 | 5,328,378 | |||||||
Stock options | 2014 Equity Incentive Plan | ||||||||||
Shareholders' Equity | ||||||||||
Authorized for future issuance (in shares) | 1,576,926 | 1,576,926 | 1,463,415 | |||||||
Stock options | 2016 Inducement Plan | ||||||||||
Shareholders' Equity | ||||||||||
Authorized for future issuance (in shares) | 334,062 | 334,062 | 0 | |||||||
Stock options | Underwriters | ||||||||||
Shareholders' Equity | ||||||||||
Total shares of common stock sold | 81,371 | |||||||||
Stock options | Common Stock | Over-Allotment Option | ||||||||||
Shareholders' Equity | ||||||||||
Common stock shares sold | 375,000 | |||||||||
Stock options | Common Stock | Underwriters | ||||||||||
Shareholders' Equity | ||||||||||
Common stock shares sold | 375,000 |
Stock-Based Compensations - Sto
Stock-Based Compensations - Stock Compensation Plans (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 34 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Mar. 31, 2016 | |
Stock Option Plans | ||||||
Number of shares available for future issuance under the plan | 7,927,394 | 7,185,941 | 7,927,394 | |||
Weighted- Average Remaining Contractual Term (years) | ||||||
Vested, end of the period | 6 years 4 months 23 days | |||||
Aggregate Intrinsic Value (thousands) | ||||||
Vested, end of the period | $ 37,700,000 | $ 37,700,000 | ||||
Fair value of common stock (in dollars per share) | $ 16.90 | $ 16.90 | ||||
Stock-based compensation expense | $ 10,571,000 | $ 9,956,000 | $ 7,203,000 | |||
Stock options | ||||||
Stock Option Plans | ||||||
Number of shares available for future issuance under the plan | 5,483,557 | 5,328,378 | 5,483,557 | |||
Number of Shares | ||||||
Balances, beginning of the period (in shares) | 5,328,378 | |||||
Options granted (in shares) | 1,042,975 | |||||
Options exercised (in shares) | (586,956) | |||||
Options forfeited (in shares) | (436,672) | |||||
Options expired (in shares) | (77,529) | |||||
Balances, end of the period (in shares) | 5,270,196 | 5,328,378 | 5,270,196 | |||
Vested and expected to vest, end of the period (in shares) | 5,123,793 | 5,123,793 | ||||
Vested, end of the period (in shares) | 3,178,726 | 3,178,726 | ||||
Weighted Average Exercise Price | ||||||
Balances, beginning of the period (in dollars per share) | $ 8.57 | |||||
Options granted (in dollars per share) | 14.75 | |||||
Options exercised (in dollars per share) | 5.18 | |||||
Options forfeited (in dollars per share) | 13.85 | |||||
Options expired (in dollars per share) | 17.70 | |||||
Balances, end of the period (in dollars per share) | 9.60 | $ 8.57 | $ 9.60 | |||
Vested and expected to vest, end of the period (in shares) | 9.49 | 9.49 | ||||
Vested, end of the period (in shares) | $ 7.12 | $ 7.12 | ||||
Weighted- Average Remaining Contractual Term (years) | ||||||
Balances, end of the period | 7 years 22 days | |||||
Vested and expected to vest, end of the period | 7 years 10 days | |||||
Vested, end of the period | 6 years 3 months | |||||
Aggregate Intrinsic Value (thousands) | ||||||
Balances, end of the period | $ 39,744,000 | $ 39,744,000 | ||||
Vested and expected to vest, end of the period | 39,182,000 | 39,182,000 | ||||
Vested, end of the period | $ 31,719,000 | $ 31,719,000 | ||||
Fair value of common stock (in dollars per share) | $ 16.90 | $ 16.90 | ||||
Stock options | Maximum | ||||||
Stock Option Plans | ||||||
Term of awards | 10 years | |||||
Restricted Stock Units (RSUs) | ||||||
Aggregate Intrinsic Value (thousands) | ||||||
Period for recognition of unrecognized compensation cost | 3 years 5 months | |||||
Stock-based compensation expense | $ 500,000 | $ 0 | $ 0 | |||
Employee Stock Options | ||||||
Number of Shares | ||||||
Options granted (in shares) | 1,030,375 | 917,150 | 2,310,583 | |||
Aggregate Intrinsic Value (thousands) | ||||||
Weighted-average grant date fair value (in dollars per share) | $ 9.15 | $ 11.47 | $ 10.77 | |||
Compensation not yet recognized | $ 19,100,000 | $ 19,100,000 | ||||
Period for recognition of unrecognized compensation cost | 2 years 5 months | |||||
Total fair value of awards vested | $ 8,400,000 | $ 10,000,000 | $ 900,000 | |||
Stock-based compensation expense | $ 9,300,000 | $ 8,700,000 | $ 4,000,000 | |||
Non-employees stock options | ||||||
Number of Shares | ||||||
Options granted (in shares) | 12,600 | 0 | 199,550 | |||
Aggregate Intrinsic Value (thousands) | ||||||
Stock-based compensation expense | $ 500,000 | $ 1,100,000 | $ 3,200,000 | |||
Employee Stock Purchase Plan | ||||||
Stock Option Plans | ||||||
Increase in common stock available for issuance (in shares) | 184,927 | 175,440 | ||||
Exercise price as a percentage of estimated fair value of the shares on the date of grant | 85.00% | |||||
Number of shares available for future issuance under the plan | 532,849 | 532,849 | ||||
Aggregate Intrinsic Value (thousands) | ||||||
Number of shares authorized under the plan | 262,762 | |||||
Value of shares that an employee is permitted to purchase | $ 25,000 | |||||
Total number of shares issued under the plan | 90,280 | |||||
Stock-based compensation expense | $ 300,000 | $ 200,000 | $ 69,200 | |||
Employee Stock Purchase Plan | Maximum | ||||||
Stock Option Plans | ||||||
Increase in common stock reserved for issuance as a percentage of total number of shares of the Company's capital stock outstanding on the last day of the preceding fiscal year | 1.00% | |||||
Aggregate Intrinsic Value (thousands) | ||||||
Percentage of annual compensation of the employee to be deducted for purchase of shares | 15.00% | |||||
Threshold number of shares to determine increase in common stock reserved for future issuance | 520,000 | |||||
2002 Plan | ||||||
Stock Option Plans | ||||||
Shares of common stock available for future grant or issuance | 0 | 0 | ||||
2007 Stock Plan | ||||||
Stock Option Plans | ||||||
Shares of common stock available for future grant or issuance | 0 | 0 | ||||
2007 Stock Plan | Stock options | Maximum | ||||||
Stock Option Plans | ||||||
Term of awards | 10 years | |||||
2014 Equity Incentive Plan | ||||||
Stock Option Plans | ||||||
Shares of common stock available for future grant or issuance | 1,576,926 | 1,576,926 | ||||
Increase in common stock reserved for issuance as a percentage of total number of shares of the Company's capital stock outstanding on the last day of the preceding fiscal year | 4.00% | |||||
2014 Equity Incentive Plan | Minimum | ||||||
Stock Option Plans | ||||||
Exercise price as a percentage of estimated fair value of the shares on the date of grant | 100.00% | |||||
Exercise price as a percentage of estimated grant date fair value of shares for a 10% shareholder | 110.00% | |||||
2014 Equity Incentive Plan | Stock options | ||||||
Stock Option Plans | ||||||
Shares of common stock available for future grant or issuance | 1,993,394 | |||||
Increase in common stock available for issuance (in shares) | 739,708 | 701,763 | ||||
Vesting period | 4 years | |||||
Vesting percentage on first anniversary of the issuance date | 25.00% | |||||
Monthly vesting percentage of options after first anniversary of issuance date | 2.08% | |||||
Aggregate Intrinsic Value (thousands) | ||||||
Number of shares authorized under the plan | 1,576,926 | 1,463,415 | 1,576,926 | |||
2014 Equity Incentive Plan | Stock options | Maximum | ||||||
Stock Option Plans | ||||||
Term of awards | 10 years | |||||
2014 Equity Incentive Plan | Restricted Stock Units (RSUs) | ||||||
Stock Option Plans | ||||||
Vesting period | 4 years | |||||
Award vesting rights percentage | 25.00% | |||||
2014 Equity Incentive Plan | ISO | ||||||
Stock Option Plans | ||||||
Threshold ownership percentage of shareholder for determining exercise price of awards granted | 10.00% | |||||
2016 Inducement Plan | ||||||
Stock Option Plans | ||||||
Number of shares available for future issuance under the plan | 450,000 | |||||
2016 Inducement Plan | Stock options | ||||||
Aggregate Intrinsic Value (thousands) | ||||||
Number of shares authorized under the plan | 334,062 | 0 | 334,062 | |||
2016 Inducement Plan | Restricted Stock Units (RSUs) | ||||||
Stock Option Plans | ||||||
Vesting period | 4 years | |||||
Award vesting rights percentage | 25.00% | |||||
2016 Inducement Plan | Employee Stock Options | ||||||
Stock Option Plans | ||||||
Term of awards | 10 years | |||||
Vesting period | 4 years | |||||
Vesting percentage on first anniversary of the issuance date | 25.00% | |||||
Monthly vesting percentage of options after first anniversary of issuance date | 2.08% | |||||
2016 Inducement Plan | Employee Stock Options | Maximum | ||||||
Stock Option Plans | ||||||
Term of awards | 10 years |
Stock-Based Compensation - Outs
Stock-Based Compensation - Outstanding and Exercisable Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Options Outstanding and Exercisable | |||
Weighted average remaining contractual life of options exercisable | 6 years 4 months 23 days | ||
Aggregated intrinsic value | $ 37,700 | ||
Share price (in dollars per share) | $ 16.90 | ||
Stock options | |||
Options Outstanding and Exercisable | |||
Options Outstanding, Number of Shares | 5,270,196 | ||
Options Outstanding, Weighted- Average Remaining Life (in years) | 7 years 22 days | ||
Options Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 9.60 | ||
Options Exercisable, Number of Shares | 3,850,799 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 7.26 | ||
Weighted average remaining contractual life of options exercisable | 6 years 3 months | ||
Aggregated intrinsic value | $ 31,719 | ||
Aggregate intrinsic value of exercises | $ 6,600 | $ 6,600 | $ 10,000 |
Share price (in dollars per share) | $ 16.90 | ||
$0.00 - 0.99 | Stock options | |||
Options Outstanding and Exercisable | |||
Exercise price, lower range limit (in dollars per share) | 0 | ||
Exercise price, upper range limit (in dollars per share) | $ 0.99 | ||
Options Outstanding and Exercisable | |||
Options Outstanding, Number of Shares | 1,136,066 | ||
Options Outstanding, Weighted- Average Remaining Life (in years) | 4 years 11 months 10 days | ||
Options Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 0.67 | ||
Options Exercisable, Number of Shares | 1,136,066 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 0.67 | ||
$1.00 - 8.99 | Stock options | |||
Options Outstanding and Exercisable | |||
Exercise price, lower range limit (in dollars per share) | 1 | ||
Exercise price, upper range limit (in dollars per share) | $ 8.99 | ||
Options Outstanding and Exercisable | |||
Options Outstanding, Number of Shares | 538,052 | ||
Options Outstanding, Weighted- Average Remaining Life (in years) | 5 years 8 days | ||
Options Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 2.71 | ||
Options Exercisable, Number of Shares | 538,052 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 2.71 | ||
$9.00 - 10.99 | Stock options | |||
Options Outstanding and Exercisable | |||
Exercise price, lower range limit (in dollars per share) | 9 | ||
Exercise price, upper range limit (in dollars per share) | $ 10.99 | ||
Options Outstanding and Exercisable | |||
Options Outstanding, Number of Shares | 1,402,600 | ||
Options Outstanding, Weighted- Average Remaining Life (in years) | 7 years 1 month 18 days | ||
Options Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 9 | ||
Options Exercisable, Number of Shares | 1,402,600 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 9 | ||
$11.00 - 16.99 | Stock options | |||
Options Outstanding and Exercisable | |||
Exercise price, lower range limit (in dollars per share) | 11 | ||
Exercise price, upper range limit (in dollars per share) | $ 16.99 | ||
Options Outstanding and Exercisable | |||
Options Outstanding, Number of Shares | 1,049,597 | ||
Options Outstanding, Weighted- Average Remaining Life (in years) | 8 years 10 months 14 days | ||
Options Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 14.45 | ||
Options Exercisable, Number of Shares | 268,046 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 14.74 | ||
$17.00 - 26.22 | Stock options | |||
Options Outstanding and Exercisable | |||
Exercise price, lower range limit (in dollars per share) | 17 | ||
Exercise price, upper range limit (in dollars per share) | $ 26.22 | ||
Options Outstanding and Exercisable | |||
Options Outstanding, Number of Shares | 1,143,881 | ||
Options Outstanding, Weighted- Average Remaining Life (in years) | 8 years 4 months 28 days | ||
Options Outstanding, Weighted- Average Exercise Price (in dollars per share) | $ 17.99 | ||
Options Exercisable, Number of Shares | 506,035 | ||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 18.14 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Number of Shares | |
Unvested, Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 229,561 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (16,200) |
Unvested, Ending balance (in shares) | shares | 213,361 |
Weighted-Average Grant Date Fair Value | |
Unvested, Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 14.59 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 13.66 |
Unvested, Ending balance (in dollars per share) | $ / shares | $ 14.66 |
Unrecognized compensation cost | $ | $ 2.6 |
Period for recognition of unrecognized compensation cost | 3 years 5 months |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 10,571 | $ 9,956 | $ 7,203 |
Employee Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 9,300 | 8,700 | 4,000 |
Employee Stock Options | Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 2,645 | 2,492 | 1,157 |
Employee Stock Options | General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 7,446 | 6,388 | 2,887 |
Non-employees stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 500 | 1,100 | 3,200 |
Non-employees stock options | Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 210 | 664 | 1,331 |
Non-employees stock options | General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 270 | $ 412 | $ 1,828 |
Stock-Based Compensations - Wei
Stock-Based Compensations - Weighted-average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Stock Options | |||
Assumptions to estimate the fair value of stock options | |||
Expected price volatility, minimum | 69.00% | 68.00% | 90.00% |
Expected price volatility, maximum | 71.00% | 80.00% | 96.00% |
Risk-free interest rate, minimum | 1.23% | 1.37% | 1.84% |
Risk-free interest rate, maximum | 1.81% | 1.95% | 2.20% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Employee Stock Options | Minimum | |||
Assumptions to estimate the fair value of stock options | |||
Expected term | 5 years 6 months | 5 years 6 months | 6 years 9 months |
Employee Stock Options | Maximum | |||
Assumptions to estimate the fair value of stock options | |||
Expected term | 6 years 3 months | 6 years 3 months | 7 years |
Employee Stock Purchase Plan | |||
Assumptions to estimate the fair value of stock options | |||
Expected price volatility, minimum | 68.00% | 56.00% | 67.00% |
Expected price volatility, maximum | 73.00% | 62.00% | 75.00% |
Risk-free interest rate, minimum | 0.49% | 0.07% | 0.02% |
Risk-free interest rate, maximum | 0.60% | 0.41% | 0.05% |
Expected term | 6 months | 6 months | 6 months |
Dividend yield | 0.00% | 0.00% | 0.00% |
Non-employees stock options | |||
Assumptions to estimate the fair value of stock options | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Non-employees stock options | Minimum | |||
Assumptions to estimate non-employee stock options | |||
Expected price volatility | 71.00% | 76.00% | 72.00% |
Risk-free interest rate | 1.47% | 1.84% | 0.81% |
Expected term | 7 years | 8 years | 3 years 3 months |
Non-employees stock options | Maximum | |||
Assumptions to estimate non-employee stock options | |||
Expected price volatility | 77.00% | 82.00% | 98.00% |
Risk-free interest rate | 2.46% | 2.26% | 2.75% |
Expected term | 9 years 9 months | 9 years | 10 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income (loss) before provision for income tax | ||||
United States | $ (60,147,000) | $ (57,074,000) | $ 17,599,000 | |
International | (26,000) | 0 | (2,000) | |
Income (loss) before income taxes | (60,173,000) | (57,074,000) | 17,597,000 | |
Current: | ||||
Federal | (116,000) | (5,273,000) | 7,367,000 | |
State | 1,000 | 1,000 | 7,000 | |
Foreign | 0 | 0 | 0 | |
Current income tax provision (benefit) | (115,000) | (5,272,000) | 7,374,000 | |
Deferred: | ||||
Federal | 0 | 0 | 0 | |
State | 0 | 0 | 0 | |
Foreign | 0 | 0 | 0 | |
Deferred income tax provision | 0 | |||
Provision (benefit) for income taxes | $ (115,000) | (5,272,000) | 7,374,000 | |
Increase (decrease) in accrued taxes payable | 0 | (1,600,000) | $ 0 | |
Federal income tax rate | 35.00% | |||
Difference of provision for income taxes from the amount computed by applying the federal income tax rate of 35% to pretax income from operations | ||||
Statutory federal income tax rate | $ (21,079,000) | (19,976,000) | 6,159,000 | |
State income taxes, net of federal tax benefits | (9,000) | 1,000 | 1,000 | |
Warrants | 0 | 0 | 344,000 | |
Foreign rate differential | 10,000 | 0 | 1,000 | |
Tax credits | (3,905,000) | (8,303,000) | (168,000) | |
Net operating loss carryback | 0 | 4,099,000 | 0 | |
Change in statutory rates | 624,000 | 0 | 0 | |
Stock compensation | (1,109,000) | 821,000 | 302,000 | |
State net operating losses | 1,779,000 | 0 | 0 | |
Other | 109,000 | 1,330,000 | (70,000) | |
Change in valuation allowance | 23,465,000 | 16,756,000 | 805,000 | |
Provision (benefit) for income taxes | (115,000) | (5,272,000) | $ 7,374,000 | |
Significant components of the Company's deferred tax assets | ||||
Net operating loss carryforwards | 29,102,000 | 12,665,000 | ||
Research and development tax credits | 14,453,000 | 8,652,000 | ||
Accruals and reserves | 395,000 | 345,000 | ||
Stock compensation | 6,902,000 | 5,341,000 | ||
Depreciation and amortization | 1,765,000 | 2,149,000 | ||
Total deferred tax assets | 52,617,000 | 29,152,000 | ||
Less: Valuation allowance | (52,617,000) | (29,152,000) | ||
Net deferred tax assets | 0 | 0 | ||
Increase (decrease) in net valuation allowance | $ 23,500,000 | $ 18,900,000 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 73 | $ 25 |
State | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 61.8 | $ 61.8 |
Operating loss carryforwards, amount expired | $ 7.6 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) - Research and development tax credit carryforward $ in Millions | Dec. 31, 2016USD ($) |
Tax credit carryforwards | |
Tax credit carryforwards | $ 9.7 |
Federal | |
Tax credit carryforwards | |
Tax credit carryforwards | 3.5 |
State | |
Tax credit carryforwards | |
Tax credit carryforwards | $ 2.7 |
Income Taxes - Uncertain Tax Po
Income Taxes - Uncertain Tax Positions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits that would impact effective tax rate | $ 0 | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance at the beginning of the year | 1,820,000 | $ 2,608,000 | $ 2,270,000 |
Additions based on prior period tax positions | 93,000 | 980,000 | 348,000 |
Additions based on current period tax positions | 1,275,000 | 0 | 0 |
Reductions based on prior period tax positions | 0 | (1,768,000) | (10,000) |
Balance at the end of the year | 3,188,000 | 1,820,000 | 2,608,000 |
Interest related to unrecognized tax benefits | $ 0 | $ 0 | 11,000 |
Reversal of interest accrued | $ 11,000 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Historical net income (loss) per share | |||||||||||
Net income (loss) | $ (14,960) | $ (14,394) | $ (16,876) | $ (13,828) | $ (10,690) | $ (14,859) | $ (14,051) | $ (12,202) | $ (60,058) | $ (51,802) | $ 10,223 |
Noncumulative dividend on preferred stock | 0 | 0 | (432) | ||||||||
Undistributed earnings allocated to preferred stockholders | 0 | 0 | (823) | ||||||||
Basic net income (loss) attributable to common stockholders | (60,058) | (51,802) | 8,968 | ||||||||
Adjustment to net income (loss) for dilutive securities | 0 | 0 | 101 | ||||||||
Diluted net income (loss) attributable to common stockholders | $ (60,058) | $ (51,802) | $ 9,069 | ||||||||
Basic common shares outstanding: | |||||||||||
Basic common shares outstanding: weighted average common shares outstanding | 21,711 | 18,116 | 14,849 | ||||||||
Less: weighted average unvested common shares subject to repurchase | 0 | (5) | (12) | ||||||||
Weighted average number of common shares used in calculating net income (loss) per share—basic | 21,711 | 18,111 | 14,837 | ||||||||
Dilutive securities: | |||||||||||
Common stock options (in shares) | 0 | 0 | 2,148 | ||||||||
Warrants to purchase common stock (in shares) | 0 | 0 | 122 | ||||||||
Weighted average number of common shares used in calculating net income (loss) per share—diluted (in shares) | 21,711 | 18,111 | 17,107 | ||||||||
Net income (loss) per share attributable to common stockholders | |||||||||||
Basic (in dollars per share) | $ (2.77) | $ (2.86) | $ 0.60 | ||||||||
Diluted (in dollars per share) | $ (2.77) | $ (2.86) | $ 0.53 | ||||||||
Total anti-dilutive securities (in shares) | 5,523 | 5,249 | 441 | ||||||||
Options to purchase common stock | |||||||||||
Net income (loss) per share attributable to common stockholders | |||||||||||
Total anti-dilutive securities (in shares) | 5,523 | 5,249 | 441 |
Quarterly Financial Informati58
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 37 | $ 138 | $ 222 | $ 175 | $ 524 | $ 768 | $ 398 | $ 226 | |||
Operating expenses | 15,330 | 14,781 | 17,282 | 14,163 | 16,587 | 15,763 | 14,551 | 12,452 | $ 61,556 | $ 59,353 | $ 37,332 |
Net loss | $ (14,960) | $ (14,394) | $ (16,876) | $ (13,828) | $ (10,690) | $ (14,859) | $ (14,051) | $ (12,202) | $ (60,058) | $ (51,802) | $ 10,223 |
Net income (loss) per share attributable to common stockholders: | |||||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.68) | $ (0.66) | $ (0.78) | $ (0.65) | $ (0.58) | $ (0.81) | $ (0.78) | $ (0.69) | |||
Basic (in dollars per share) | $ (2.77) | $ (2.86) | $ 0.60 | ||||||||
Diluted (in dollars per share) | $ (2.77) | $ (2.86) | $ 0.53 | ||||||||
Correcting adjustment to record income tax adjustment of prior quarters | $ (2,900) |