Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 12, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | NephroGenex, Inc. | |
Entity Central Index Key | 1,338,095 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,478,614 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 10,195 | $ 13,978 |
Short-term investments | 8,675 | 14,698 |
Prepaid expenses and other assets | 1,029 | 309 |
Total current assets | 19,899 | 28,985 |
Deferred offering costs | 392 | 0 |
Property and equipment, net | 38 | 36 |
Other assets | 301 | 210 |
Total assets | 20,630 | 29,231 |
Current liabilities | ||
Accounts payable | 1,930 | 1,750 |
Accrued and other liabilities | 3,501 | 1,405 |
Current portion of note payable | 1,468 | 293 |
Total current liabilities | 6,899 | 3,448 |
Note payable, less current portion | 5,346 | 6,442 |
Other long-term liabilities | 22 | 10 |
Liabilities | 12,267 | 9,900 |
Stockholders’ equity | ||
Preferred stock; $.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock; $.001 par value; 100,000,000 shares authorized; 8,865,114 and 8,862,114 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 9 | 9 |
Additional paid-in capital | 77,731 | 77,149 |
Accumulated other comprehensive loss | (6) | (8) |
Accumulated deficit | (69,371) | (57,819) |
Total stockholders’ equity | 8,363 | 19,331 |
Total liabilities and stockholders’ equity | $ 20,630 | $ 29,231 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
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 | 8,865,114 | 8,862,114 |
Common stock, shares outstanding | 8,865,114 | 8,862,114 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Statements of Comprehensive Los
Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Expenses: | ||||
Research and development | $ 4,240 | $ 3,875 | $ 7,609 | $ 4,332 |
General and administrative | 2,002 | 1,560 | 3,672 | 2,595 |
Total expenses | 6,242 | 5,435 | 11,281 | 6,927 |
Loss from operations | (6,242) | (5,435) | (11,281) | (6,927) |
Other income (expense): | ||||
Change in value of preferred stock warrants | 0 | 0 | 0 | (140) |
Interest expense | (141) | 0 | (284) | (78) |
Interest income | 4 | 12 | 13 | 22 |
Net loss | $ (6,379) | $ (5,423) | $ (11,552) | $ (7,123) |
Net loss per share - basic and diluted (in dollars per share) | $ (0.72) | $ (0.61) | $ (1.30) | $ (1.06) |
Weighted average shares outstanding - basic and diluted (in shares) | 8,864,603 | 8,855,114 | 8,863,868 | 6,733,095 |
Other comprehensive loss: | ||||
Unrealized gain/(loss) on short-term investments | $ (5) | $ (37) | $ 2 | $ (37) |
Comprehensive loss | $ (6,384) | $ (5,460) | $ (11,550) | $ (7,160) |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2014 | 8,862,114 | ||||
Balance at Dec. 31, 2014 | $ 19,331 | $ 9 | $ 77,149 | $ (8) | $ (57,819) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for restricted stock units (unaudited) | 3,000 | ||||
Stock based compensation (unaudited) | 582 | 582 | |||
Other comprehensive income (unaudited) | 2 | 2 | |||
Net loss | (11,552) | (11,552) | |||
Balance at Jun. 30, 2015 | $ 8,363 | $ 9 | $ 77,731 | $ (6) | $ (69,371) |
Balance (in shares) at Jun. 30, 2015 | 8,865,114 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities | ||
Net loss | $ (11,552) | $ (7,123) |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities | ||
Depreciation and amortization | 5 | 1 |
Loss on disposal of fixed assets | 3 | 0 |
Change in fair value of preferred stock warrants | 0 | 140 |
Non-cash interest expense | 89 | 78 |
Accretion of premium on investment activities | 28 | 12 |
Accrued interest receivable | 33 | 1 |
Stock based compensation expense | 582 | 540 |
Changes in operating assets and liabilities | ||
Prepaid expenses and other assets | (820) | (601) |
Accounts payable, accrued and other liabilities | 1,931 | 1,294 |
Net cash and cash equivalents used in operating activities | (9,701) | (5,658) |
Investing activities | ||
Purchases of investments | 8,682 | 18,316 |
Sales of short-term investments | 14,646 | 0 |
Property and equipment purchases | (10) | (2) |
Net cash and cash equivalents provided by (used in) investing activities | 5,954 | (18,318) |
Financing activities | ||
Deferred offering costs | (36) | (3,737) |
Proceeds from issuance of common stock | 0 | 37,200 |
Net cash and cash equivalents provided by (used in) financing activities | (36) | 33,463 |
Net increase (decrease) in cash and cash equivalents | (3,783) | 9,487 |
Cash and cash equivalents at beginning of period | 13,978 | 2,132 |
Cash and cash equivalents at end of period | 10,195 | 11,619 |
Supplemental disclosure of noncash investing and financing activities | ||
Unrealized gain (loss) on investments | 2 | (13) |
Conversion of convertible notes payable, accrued interest, preferred stock and warrants into common stock | 0 | 15,793 |
Deferred offering costs included in accrued and other liabilities | $ 356 | $ 0 |
The Company
The Company | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | Description of Business Description of Business NephroGenex, Inc. (the “Company”) was incorporated in Delaware on May 25, 2004. The Company is a drug development company focused on developing novel therapies for kidney disease. The Company acquired commercial rights to Pyridorin™ and has initiated a Phase 3 clinical study in patients with diabetic nephropathy. The Company’s primary efforts to date have been devoted to raising capital, recruiting senior management and staff and conducting research and development activities. The Company has experienced net losses since its inception and, as of June 30, 2015, had an accumulated deficit of $69.4 million . The Company currently has no commercially approved products and has recognized no revenue since its inception in 2004. The Company does not expect to generate revenue from product sales unless and until it successfully completes development and obtain marketing approval for one or more of its product candidates, which the Company expects will take a number of years and is subject to significant uncertainty. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval. There can be no assurance that the Company’s current products in development, if approved, will be successfully commercialized due to a variety of factors, including competition from other biotechnology and pharmaceutical companies. Going Concern The Company's financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred losses since its inception, expects to incur additional costs and requires additional capital to continue as a going concern. As a result, the Company will require additional funds and will continue to seek private or public equity, debt financing, research funding and revenue or expense sharing from collaborative agreements to meet its capital requirements. Even if the Company does not have an immediate need for additional cash, it may seek access to the private or public equity markets if and when conditions are favorable. If such funds are not available, management may need to reassess its business plans. There is no assurance that such additional funds will be available for the Company to finance its operations on acceptable terms, if at all. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Unaudited Interim Financial Information The accompanying interim financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The year-end balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reverse Stock Split On February 6, 2014, the Company effected a 1-for-6.5 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the conversion ratio for the Company’s outstanding Series A Preferred Stock. All share and per share amounts for the six month period ended June 30, 2014 and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split and adjustment of the preferred share conversion ratios. Initial Public Offering On February 14, 2014, the Company completed its initial public offering of common stock (the “IPO”) pursuant to a registration statement that was declared effective on February 10, 2014. The Company sold 3,100,000 shares of its common stock, at a price of $ 12.00 . The Company raised a total of $33.4 million in net proceeds after deducting underwriting discounts and commissions and offering expenses of approximately $ 3.8 million . Costs directly associated with the IPO were capitalized and recorded as deferred IPO costs prior to the closing of the IPO. These costs were recorded as a reduction of the proceeds received in arriving at the amount to be recorded as additional paid-in capital. Upon completion of the IPO, 3,644,354 shares of common stock were issued for the conversion of all outstanding shares of Series A Preferred stock, 1,197,289 shares of common stock were issued for the conversion of outstanding convertible notes and accrued interest and 593,589 aggregate shares of common stock were issued in connection with the settlement of the Company’s outstanding preferred stock warrant liability. Warrant Liability Certain warrants to purchase the Company’s capital stock had historically been classified as liabilities and were recorded at estimated fair value. At each reporting period, any change in fair value of the freestanding warrants was recorded as other (expense) income. The preferred stock warrant liability was settled upon the closing of the IPO. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Investments The Company invests in money market funds and certificates of deposits and considers all investments purchased with original maturity dates greater than three months and less than one year to be short-term investments. Those investments with original maturity dates greater than one year are considered to be long-term investments. As of June 30, 2015, all investments were classified as available-for-sale and had original maturity dates less than one year. These investments are carried at estimated fair value with unrealized gains and losses included in stockholders' equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income. Concentration of Credit Risk The Company invests its available cash balances in bank deposits, money market funds and certificates of deposit. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. Property and Equipment Property and equipment consists of furniture, fixtures and computers. Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the respective asset’s estimated useful life. Maintenance and repairs that do not improve or extend the life of assets are expensed as incurred. When an asset is retired or disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected within the statement of operations. Fair Value of Financial Instruments As of June 30, 2015, financial instruments consist of cash and cash equivalents, short-term investments, a note payable and accounts payable. The Company defines fair value (“FV”) as the price that would be received to sell an asset or paid to transfer a liability ("the exit price") in an orderly transaction between market participants at the measurement date. The FV hierarchy for inputs maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The Company uses the following hierarchy of inputs to measure FV: • Level 1: Quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs, other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs that are supported by little or no market activity, which require the reporting entity to develop its own assumptions. The Company values investments using the most observable inputs available that are current as of the measurement date and classifies them according to the lowest level of inputs used. Observable inputs are inputs that market participants would use in pricing the asset or liability developed from market data obtained from independent sources. Unobservable inputs are those which reflect the Company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed from the best information available under the circumstances. The Company targets investments principally in Level 1 and Level 2 cash equivalents and financial instruments and records them at FV. The Company did not rely on Level 3 inputs for the valuation of any investments at June 30, 2015 or December 31, 2014. The Company expects that the carrying values of cash equivalents will approximate FV because of their short maturities. The Company classifies as Level 2 investments in certificates of deposits and values them using the market approach based on significant other observable inputs including quoted prices in active markets for instruments that are similar or quoted prices in markets that are not traded on a daily basis for identical or similar instruments. The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of June 30, 2015: Quoted Prices in Active Significant (in thousands) Markets Other Significant Balance For Identical Assets Observable Inputs Unobservable Inputs Assets: June 30, 2015 Level 1 Level 2 Level 3 Certificates of Deposit $ 14,226 $ — $ 14,226 $ — $ 14,226 $ — $ 14,226 $ — The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of December 31, 2014: Quoted Prices in Active Significant (in thousands) Markets Other Significant Balance For Identical Assets Observable Inputs Unobservable Inputs Assets: December 31, 2014 Level 1 Level 2 Level 3 Certificates of Deposit $ 16,765 $ — $ 16,765 $ — $ 16,765 $ — $ 16,765 $ — Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities including non-cash share-based compensation, costs for third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by the third parties, patient enrollment in clinical trials, administrative costs incurred by the third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. Stock-Based Compensation The Company estimates the FV of stock options and stock purchase rights using a Black-Scholes option valuation model which requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The Company uses the simplified method for estimating the expected term as provided by the Securities and Exchange Commission's Staff Accounting Bulletin No. 107. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options. The expected stock price volatility assumption was determined by examining the historical volatilities of a group of industry peers. The FV of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting FV is expensed using the straight-line attribution method over the vesting period, which is the same as the requisite service period. Restricted stock units are measured at the FV of the Company's common stock on the date of grant and expensed over the period of vesting, which is the same as the requisite service period using the straight-line attribution method. Recent Accounting Pronouncements Occasionally, new accounting standards are issued or proposed by the Financial Accounting Standards Board (the “FASB”), or other standards-setting bodies that the Company adopts by the effective date specified within the standard. Unless otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. I n August 2014, FASB issued Accounting Standards Update (“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” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Management is currently evaluating the impact of the adoption of ASU 2014-14 on the Company's financial statements and disclosures. In April 2015, the FASB issued ASU No. 2015-03, " Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" . The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The new standard will be effective for reporting periods beginning after December 15, 2015, with early adoption permitted. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The Company does not expect ASU No. 2015-03 to have a material impact on the Company's financial statements upon adoption. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of the Company’s common stock outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method. Under the treasury-stock method earnings per share data is computed as if the common share equivalents were outstanding at the beginning of the period (or at the time of issuance, if later) and as if the funds obtained from exercise of the common stock equivalents were used to purchase common stock at the average market price during the period. If there is little or no market for the common stock, a reasonable estimate of FV shall be used. For purposes of this calculation, preferred stock, stock options, restricted stock units and warrants to purchase capital stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following table sets forth the computation of basic and diluted net loss per share in thousands, except share and per share data: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Historical Numerator: Net loss $ (6,379 ) $ (5,423 ) $ (11,552 ) $ (7,123 ) Denominator: Weighted average common shares outstanding 8,864,603 8,855,114 8,863,868 6,733,095 Net loss per share- basic and diluted $ (0.72 ) $ (0.61 ) $ (1.30 ) $ (1.06 ) Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common equivalent shares on a weighted-average basis): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Common stock options 1,381,921 816,695 1,327,149 749,225 Restricted stock units 14,750 24,000 15,500 24,000 Common stock warrants 118,603 62,000 118,603 46,586 In addition to the potentially dilutive securities noted above, the Company has excluded from the table above 3,644,354 shares of common stock that were issued for the conversion of all outstanding shares of Series A Preferred stock, 1,197,289 shares of common stock that were issued for convertible notes and accrued interest and 593,589 aggregate shares of common stock that were issued in connection with the settlement of the Company’s outstanding warrant obligations upon closing of the IPO. |
Balance Sheet Items
Balance Sheet Items | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Items | Balance Sheet Items Investments The following table summarizes the Company's available-for-sale investments as of June 30, 2015 (in thousands): Maturity Amortized Unrealized Unrealized Estimated Short-term Investments (in years) Cost Gains Loss Fair Value Certificates of Deposit 1 or less 8,681 — (6 ) 8,675 Total Investments $ 8,681 $ — $ (6 ) $ 8,675 The following table summarizes the Company's available-for-sale investments as of December 31, 2014 (in thousands): Maturity Amortized Unrealized Unrealized Estimated Short-term Investments (in years) Cost Gains Loss Fair Value Certificates of Deposit 1 or less 14,706 — (8 ) 14,698 Total Investments $ 14,706 $ — $ (8 ) $ 14,698 At each reporting date, the Company performs an evaluation of impairment to determine if the unrealized losses are other-than-temporary. For debt securities, management determines whether it intends to sell the impaired securities, and if there is no intent or expected requirement to sell, management considers whether it is likely that the amortized cost will be recovered. The Company does not consider unrealized losses on its debt investment securities to be credit-related. These unrealized losses relate to changes in interest rates and market spreads subsequent to purchase. The Company has not made a decision to sell securities with unrealized losses and believes it is more likely than not it would not be required to sell such securities before recovery of its amortized cost. There have been no other than temporary losses recognized in earnings. Accrued Liabilities Accrued liabilities were as follows (in thousands): June 30, December 31, 2015 2014 Accrued clinical trial expenses $ 2,330 $ 393 Accrued compensation 523 909 Other accruals 648 103 Total $ 3,501 $ 1,405 |
License Agreements
License Agreements | 6 Months Ended |
Jun. 30, 2015 | |
License Agreements [Abstract] | |
License Agreements | License Agreements The University of South Carolina Research Foundation, Corp. During 2007, the Company licensed certain technology from the University of South Carolina Research Foundation, Corp. (“USCRF”) to the Company. The license gives the Company worldwide rights to use the technology as defined in the agreement. The agreement was amended in August 2013. The Company is obligated to pay an annual licensing fee of $120,000 . Upon the achievement of certain defined product development milestones for diabetic neuropathy or hyperlipidemia, the Company would be obligated to make up to $6.1 million of payments to USCRF. The Company will be obligated to pay USCRF a one-time fee of $35,000 upon execution of a sublicense and would pay to USCRF 25% of any non-royalty sublicense payments received from a sub-licensee. The term of the agreement expires on the expiration of the underlying USCRF patents. The Company can terminate the license at any time upon three months prior written notice to USCRF. As of June 30, 2015, no development milestones have been paid or accrued nor does the Company expect to achieve any development milestones during the next few years. The Company paid $30,000 and $60,000 for each of the three month and six month periods ended June 30, 2015 and 2014, respectively for licensing fees due under this agreement. Vanderbilt University During 2006, the Company entered into a licensing agreement with Vanderbilt University (“Vanderbilt”) for the rights to use certain technology. The agreement, as amended, requires the Company to make milestone payments totaling approximately $1.1 million in the event certain defined events occur. Should the Company successfully develop a product using the licensed technology, Vanderbilt will be due royalties based on net sales at a rate of 5% . The Company must also pay Vanderbilt 25% of non‑royalty sub‑licensee payments received from a sub‑licensee. Annual minimum royalties due under the licensing agreement are $10,000 and will increase to $25,000 when a claim in the licensed patent rights is issued in a major market country, as defined. The licensing agreement expires when the underlying patents to the licensed technology expire. The Company may terminate the agreement upon sixty days written notice to Vanderbilt. Certain milestones can be paid in stock or are creditable against future royalties due based on net sales. As of June 30, 2015, no milestone or royalty payments have been paid or accrued. |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Convertible Notes Payable On February 14, 2014, in connection with the closing of the Company’s IPO, $7.9 million of convertible promissory notes and $728,000 of accrued interest were converted into 1,197,289 shares of common stock. Interest expense for the three and six months ended June 30, 2015 and 2014 relating to the notes was approximately $0 , and $78,000 , respectively. Term Loan On November 20, 2014, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with East West Bank ("East West") for a term loan (the “Initial Term Loan”) with an aggregate principal amount of $7.0 million and, subject to the terms and conditions set forth in the agreement, a second term loan (the “Second Term Loan”) with an aggregate principal amount of $5.0 million . Each term loan shall accrue interest at a rate of 2.25% per annum plus the greater of 3.25% or the current prime rate. As of June 30, 2015, the interest rate on the loan was 5.5% . As security for its obligations under the Loan Agreement, the Company granted East West a lien on substantially all of its assets, including owned and licensed intellectual property. The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, covenants that limit or restrict the Company's ability to incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into certain transactions with affiliates, pay dividends or make distributions, or repurchase stock, in each case subject to customary exceptions for a loan facility of this size and type. In addition, the Loan Agreement contains customary events of default that entitle East West to cause any or all of the Company's indebtedness under the Loan Agreement to become immediately due and payable. The events of default include, among others, non-payment, inaccuracy of representations and warranties, covenant defaults, the occurrence of a material adverse effect (as defined in the Loan Agreement), cross-default to material agreements, cross-default to material indebtedness, bankruptcy and insolvency, material judgment defaults, discontinuation of the Phase 3 Pyridorin trial and defaults related to certain actions taken against the Company by the Food and Drug Administration or other equivalent governmental authority. On November 20, 2014, East West funded the Initial Term Loan, which matures on October 1, 2018. Interest only payments are due during the first twelve months of the Initial Term Loan (the “Interest Only Term”) and beginning on November 1, 2015, the Company is required to make thirty-six ( 36 ) equal monthly payments of principal and interest. The Interest Only Term may be extended under the Loan Agreement if certain conditions are met. The Company paid a $120,000 facility fee which was recorded as a debt discount to be amortized as interest expense over the term of the loan using the effective interest rate method. At the Company’s option, the Company had the ability to borrow the Second Term Loan on or before May 29, 2015, if the Company had met certain clinical milestones. The Company did not meet the clinical milestones for the Second Term Loan. However, the Company is discussing with East West amending the clinical milestones necessary for incurrence of the Second Term Loan. The Company may prepay each term loan in full with no prepayment penalty. Upon payment of the final monthly installment of the loan, or the remaining balance in the case of a prepayment, the Company would pay an end-of-term fee of approximately $60,000 . In connection with the Initial Term Loan, the Company issued warrants to purchase an aggregate of 56,603 shares of the Company's common stock at an exercise price of $4.24 per share. The warrants are immediately exercisable and will expire on November 20, 2021. The Company determined the fair value of the warrants to be $ 192,450 using the Black-Scholes pricing model and recorded the warrants as a debt discount to be amortized as interest expense over the term of the Initial Term Loan using the effective interest rate method. The Company also paid $50,000 in debt issuance costs, which were capitalized as a deferred asset and are being amortized over the expected remaining life of the loan using the effective interest method. The Company recognized $141,000 and $284,000 in interest expense related to the term loan, including the amortization of the warrants, for the three and six month period ended June 30, 2015. |
Term Loan Term Loan
Term Loan Term Loan | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Term Loan | Convertible Notes Payable On February 14, 2014, in connection with the closing of the Company’s IPO, $7.9 million of convertible promissory notes and $728,000 of accrued interest were converted into 1,197,289 shares of common stock. Interest expense for the three and six months ended June 30, 2015 and 2014 relating to the notes was approximately $0 , and $78,000 , respectively. Term Loan On November 20, 2014, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with East West Bank ("East West") for a term loan (the “Initial Term Loan”) with an aggregate principal amount of $7.0 million and, subject to the terms and conditions set forth in the agreement, a second term loan (the “Second Term Loan”) with an aggregate principal amount of $5.0 million . Each term loan shall accrue interest at a rate of 2.25% per annum plus the greater of 3.25% or the current prime rate. As of June 30, 2015, the interest rate on the loan was 5.5% . As security for its obligations under the Loan Agreement, the Company granted East West a lien on substantially all of its assets, including owned and licensed intellectual property. The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, covenants that limit or restrict the Company's ability to incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into certain transactions with affiliates, pay dividends or make distributions, or repurchase stock, in each case subject to customary exceptions for a loan facility of this size and type. In addition, the Loan Agreement contains customary events of default that entitle East West to cause any or all of the Company's indebtedness under the Loan Agreement to become immediately due and payable. The events of default include, among others, non-payment, inaccuracy of representations and warranties, covenant defaults, the occurrence of a material adverse effect (as defined in the Loan Agreement), cross-default to material agreements, cross-default to material indebtedness, bankruptcy and insolvency, material judgment defaults, discontinuation of the Phase 3 Pyridorin trial and defaults related to certain actions taken against the Company by the Food and Drug Administration or other equivalent governmental authority. On November 20, 2014, East West funded the Initial Term Loan, which matures on October 1, 2018. Interest only payments are due during the first twelve months of the Initial Term Loan (the “Interest Only Term”) and beginning on November 1, 2015, the Company is required to make thirty-six ( 36 ) equal monthly payments of principal and interest. The Interest Only Term may be extended under the Loan Agreement if certain conditions are met. The Company paid a $120,000 facility fee which was recorded as a debt discount to be amortized as interest expense over the term of the loan using the effective interest rate method. At the Company’s option, the Company had the ability to borrow the Second Term Loan on or before May 29, 2015, if the Company had met certain clinical milestones. The Company did not meet the clinical milestones for the Second Term Loan. However, the Company is discussing with East West amending the clinical milestones necessary for incurrence of the Second Term Loan. The Company may prepay each term loan in full with no prepayment penalty. Upon payment of the final monthly installment of the loan, or the remaining balance in the case of a prepayment, the Company would pay an end-of-term fee of approximately $60,000 . In connection with the Initial Term Loan, the Company issued warrants to purchase an aggregate of 56,603 shares of the Company's common stock at an exercise price of $4.24 per share. The warrants are immediately exercisable and will expire on November 20, 2021. The Company determined the fair value of the warrants to be $ 192,450 using the Black-Scholes pricing model and recorded the warrants as a debt discount to be amortized as interest expense over the term of the Initial Term Loan using the effective interest rate method. The Company also paid $50,000 in debt issuance costs, which were capitalized as a deferred asset and are being amortized over the expected remaining life of the loan using the effective interest method. The Company recognized $141,000 and $284,000 in interest expense related to the term loan, including the amortization of the warrants, for the three and six month period ended June 30, 2015. |
Stockholders' equity (deficit)
Stockholders' equity (deficit) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' equity (deficit) | Stockholders' equity Series A Preferred Stock In connection with the completion of the IPO, 3,644,354 shares of common stock were issued for the conversion of all outstanding shares of the Company’s Series A Preferred stock. Warrants On January 16, 2014, an agreement was reached among the Company’s significant shareholders to cancel warrants held by its majority shareholder, Care Capital Investments III, LP, together with its affiliates (collectively, Care Capital), and by funds affiliated with Rho Venture Partners (Rho). Pursuant to this agreement, an aggregate of 593,589 shares of the Company’s common stock were issued to Care Capital and Rho concurrently with the completion of the Company’s IPO in return for cancelling the warrants. In connection with the cancellation of the warrants, the Company settled the preferred stock warrant liability on its balance sheet. On February 10, 2014, the Company, in connection with the IPO, issued to employees of the underwriter warrants to purchase up to 62,000 shares of common stock. The warrants are exercisable at any time commencing one year from the effective date of the Company’s IPO. The warrants are exercisable at a price of $15.00 per share and expire on February 10, 2018. On November 20, 2014, the Company, in connection with the issuance of a term loan, issued warrants to East West to purchase up to an aggregate of 56,603 shares of the Company's common stock at an exercise price of $4.24 per share. The warrants are immediately exercisable and will expire on November 20, 2021. As of June 30, 2015, the following warrants to purchase common stock were outstanding: Exercise Issuance Date Shares Price Expiration 2/10/2014 62,000 $ 15.00 2/10/2018 11/20/2014 56,603 $ 4.24 11/20/2021 Total warrants outstanding 118,603 Common Stock On February 14, 2014, the Company filed an Amended and Restated Certificate of Incorporation which authorizes the issuance of 100,000,000 shares of common stock, and 5,000,000 shares of undesignated preferred stock. During the six month period ended June 30, 2015, the Company issued 3,000 shares of common stock to its chief executive officer for restricted stock units that vested during the period. Shares Reserved for Future Issuance The Company has reserved shares of its common stock for future issuance as follows: June 30, 2015 Stock options outstanding 1,391,758 Shares available for grant under stock option plans 1,080,992 Restricted stock units 14,000 Common stock warrants 118,603 Total shares reserved for future issuance 2,605,353 Stock Based Compensation In 2005, the Company adopted the NephroGenex, Inc. 2005 Stock Option Plan. On May 15, 2014, the 2005 Stock Option Plan, was amended and restated to the 2007 Equity Incentive Plan (the “Plan”). The amendment authorized an increase of 673,923 shares and provided for the granting of up to 1,283,226 shares of common stock to employees and consultants of the Company in the form of incentive and nonqualified stock options and shares of restricted stock. On March 24, 2015, the Company’s Board of Directors adopted, and stockholders subsequently approved, an amendment to the Company's Amended and Restated 2007 Equity Incentive Plan, as amended (the “Stock Plan”) to increase the number of shares authorized for issuance of awards under the Stock Plan from 1,283,226 to an aggregate of 2,483,226 shares of common stock. As of June 30, 2015, there were 1,080,992 shares available for issuance under the Plan. The table below summarizes stock option activity for the six month period ended June 30, 2015: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2014 1,272,581 $ 4.19 Granted 171,370 7.31 Exercised — — Expired (1,260 ) 32.50 Forfeited (50,933 ) 5.74 Outstanding as of June 30, 2015 1,391,758 $ 4.49 Exercisable as of June 30, 2015 646,543 $ 2.70 The weighted-average assumptions used in the Black-Scholes valuation model for equity awards granted during the three and six month periods ended June 30, 2015 and 2014 are shown in the table below. Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Expected volatility 97.39 % 80 % 97.39 % 80 % Expected dividends — — — — Expected life in years 6 7 6 7 Risk-free interest rate 1.7 % 2.05 % 1.7 % 2.14 % The Company determines the options’ life based upon the use of the simplified method. As a newly public company, sufficient history to estimate the volatility and dividend yield of the Company's common stock is not available. The Company uses a pool of comparable companies as a basis for the expected volatility assumption and dividend yield. The Company intends to continue to consistently apply this process using the comparable companies until sufficient amount of historical information becomes available. The risk-free interest rate is based upon the yield of an applicable Treasury instrument. In November 2013, the Company issued 24,000 Restricted Stock Units (RSU) to its CEO in connection with his employment agreement. The RSU represent the right to receive shares of common stock, subject to the terms and conditions of a restricted stock unit agreement and grant notice and were not issued under the Plan. The RSU’s are subject to time-based vesting with 25% of the RSU’s vesting on October 21, 2014 and the remaining 75% vesting in equal monthly installments on the first day of each calendar month beginning on November 1, 2014. During the six month period ended June 30, 2015, the Company issued 3,000 shares of common stock for RSUs that vested during the period. The Company recognized non-cash share-based compensation expense in its research and development and general and administrative expenses as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2015 2014 2015 2014 Research and development $ 61 $ 20 $ 131 $ 37 General and administrative 253 420 451 503 Total $ 314 $ 440 $ 582 $ 540 |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments Lease On September 12, 2014, the Company entered into an agreement to lease office space at 3200 Beechleaf Court, Raleigh, North Carolina for the period from December 1, 2014 through May 31, 2020. These premises serve as the Company's corporate headquarters. The lease provides for abatement of rent during certain periods and escalating rent payments during the lease term. The Company records rent expense on a straight-line basis over the life of the lease. Rent expense was approximately $29,000 and $55,000 for each of the three and six month periods ended June 30, 2015, respectively. Rent expense was approximately $13,000 and $26,000 for each of the three and six month periods ended June 30, 2014, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Prior to June 30, 2014, the Company reimbursed Care Capital, LLC (“Care”), an affiliate of the majority shareholder of the Company, for services of a Care employee and reimbursed Care for such personnel services incurred by Care on behalf of the Company. Total expense recognized in operating results for the three and six month periods ended June 30, 2014 in connection with services provided by Care was $50,000 and $70,000 , respectively. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event - Sale of Common Stock On July 16, 2015, the Company filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (“SEC”) for the issuance and sale of up to $7.5 million of equity or other securities. On July 22, 2015, the Company sold 1,500,000 shares of its common stock and warrants to purchase 1,500,000 shares of common stock at a combined price to the public of $5.00 per share and accompanying warrant. The warrants are immediately exercisable at a price of $6.25 per share and expire on July 22, 2020, 5 years from the date of issuance. The Company granted a 45 -day option to the representatives of the underwriters to purchase up to 225,000 additional shares of common stock at a purchase price to the public of $4.99 per share and/or additional warrants to purchase up to 225,000 shares of common stock at a purchase price to the public of $0.01 per warrant to cover over-allotments. Concurrent with closing of the offering, the underwriters exercised their option to purchase 225,000 warrants for $0.01 per share for total gross proceeds to the Company of approximately $2,250 . On July 31, 2015, the underwriters exercised their option to purchase 112,500 shares to cover over-allotments at $4.99 per share for total gross proceeds of $561,375 . The Company raised approximately $7.1 million in net proceeds from these transactions after deducting underwriting discounts and commissions and estimated offering expenses of approximately $1.0 million . |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying interim financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The year-end balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Warranty Liability | Warrant Liability Certain warrants to purchase the Company’s capital stock had historically been classified as liabilities and were recorded at estimated fair value. At each reporting period, any change in fair value of the freestanding warrants was recorded as other (expense) income. The preferred stock warrant liability was settled upon the closing of the IPO. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. |
Investments | Investments The Company invests in money market funds and certificates of deposits and considers all investments purchased with original maturity dates greater than three months and less than one year to be short-term investments. Those investments with original maturity dates greater than one year are considered to be long-term investments. As of June 30, 2015, all investments were classified as available-for-sale and had original maturity dates less than one year. These investments are carried at estimated fair value with unrealized gains and losses included in stockholders' equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income. |
Concentration of Credit Risk | Concentration of Credit Risk The Company invests its available cash balances in bank deposits, money market funds and certificates of deposit. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. |
Property and Equipment | Property and Equipment Property and equipment consists of furniture, fixtures and computers. Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the respective asset’s estimated useful life. Maintenance and repairs that do not improve or extend the life of assets are expensed as incurred. When an asset is retired or disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected within the statement of operations. |
Fair value of Financial Instruments | Fair Value of Financial Instruments As of June 30, 2015, financial instruments consist of cash and cash equivalents, short-term investments, a note payable and accounts payable. The Company defines fair value (“FV”) as the price that would be received to sell an asset or paid to transfer a liability ("the exit price") in an orderly transaction between market participants at the measurement date. The FV hierarchy for inputs maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The Company uses the following hierarchy of inputs to measure FV: • Level 1: Quoted prices in active markets for identical assets or liabilities; • Level 2: Inputs, other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs that are supported by little or no market activity, which require the reporting entity to develop its own assumptions. The Company values investments using the most observable inputs available that are current as of the measurement date and classifies them according to the lowest level of inputs used. Observable inputs are inputs that market participants would use in pricing the asset or liability developed from market data obtained from independent sources. Unobservable inputs are those which reflect the Company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed from the best information available under the circumstances. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities including non-cash share-based compensation, costs for third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by the third parties, patient enrollment in clinical trials, administrative costs incurred by the third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. |
Stock-Based Compensation | Stock-Based Compensation The Company estimates the FV of stock options and stock purchase rights using a Black-Scholes option valuation model which requires the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The Company uses the simplified method for estimating the expected term as provided by the Securities and Exchange Commission's Staff Accounting Bulletin No. 107. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options. The expected stock price volatility assumption was determined by examining the historical volatilities of a group of industry peers. The FV of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting FV is expensed using the straight-line attribution method over the vesting period, which is the same as the requisite service period. Restricted stock units are measured at the FV of the Company's common stock on the date of grant and expensed over the period of vesting, which is the same as the requisite service period using the straight-line attribution method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Occasionally, new accounting standards are issued or proposed by the Financial Accounting Standards Board (the “FASB”), or other standards-setting bodies that the Company adopts by the effective date specified within the standard. Unless otherwise discussed, standards that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. I n August 2014, FASB issued Accounting Standards Update (“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” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Management is currently evaluating the impact of the adoption of ASU 2014-14 on the Company's financial statements and disclosures. In April 2015, the FASB issued ASU No. 2015-03, " Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" . The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The new standard will be effective for reporting periods beginning after December 15, 2015, with early adoption permitted. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The Company does not expect ASU No. 2015-03 to have a material impact on the Company's financial statements upon adoption. |
Significant Accounting Polici19
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of June 30, 2015: Quoted Prices in Active Significant (in thousands) Markets Other Significant Balance For Identical Assets Observable Inputs Unobservable Inputs Assets: June 30, 2015 Level 1 Level 2 Level 3 Certificates of Deposit $ 14,226 $ — $ 14,226 $ — $ 14,226 $ — $ 14,226 $ — The following table sets forth our financial instruments carried at FV within the ASC 820 hierarchy and using the lowest level of input as of December 31, 2014: Quoted Prices in Active Significant (in thousands) Markets Other Significant Balance For Identical Assets Observable Inputs Unobservable Inputs Assets: December 31, 2014 Level 1 Level 2 Level 3 Certificates of Deposit $ 16,765 $ — $ 16,765 $ — $ 16,765 $ — $ 16,765 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share in thousands, except share and per share data: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Historical Numerator: Net loss $ (6,379 ) $ (5,423 ) $ (11,552 ) $ (7,123 ) Denominator: Weighted average common shares outstanding 8,864,603 8,855,114 8,863,868 6,733,095 Net loss per share- basic and diluted $ (0.72 ) $ (0.61 ) $ (1.30 ) $ (1.06 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common equivalent shares on a weighted-average basis): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Common stock options 1,381,921 816,695 1,327,149 749,225 Restricted stock units 14,750 24,000 15,500 24,000 Common stock warrants 118,603 62,000 118,603 46,586 |
Balance Sheet Items (Tables)
Balance Sheet Items (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Available-for-sale Securities | The following table summarizes the Company's available-for-sale investments as of June 30, 2015 (in thousands): Maturity Amortized Unrealized Unrealized Estimated Short-term Investments (in years) Cost Gains Loss Fair Value Certificates of Deposit 1 or less 8,681 — (6 ) 8,675 Total Investments $ 8,681 $ — $ (6 ) $ 8,675 The following table summarizes the Company's available-for-sale investments as of December 31, 2014 (in thousands): Maturity Amortized Unrealized Unrealized Estimated Short-term Investments (in years) Cost Gains Loss Fair Value Certificates of Deposit 1 or less 14,706 — (8 ) 14,698 Total Investments $ 14,706 $ — $ (8 ) $ 14,698 |
Schedule of Accrued Liabilities | Accrued liabilities were as follows (in thousands): June 30, December 31, 2015 2014 Accrued clinical trial expenses $ 2,330 $ 393 Accrued compensation 523 909 Other accruals 648 103 Total $ 3,501 $ 1,405 |
Stockholders' equity (deficit)
Stockholders' equity (deficit) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Schedule of Warrants or Rights | As of June 30, 2015, the following warrants to purchase common stock were outstanding: Exercise Issuance Date Shares Price Expiration 2/10/2014 62,000 $ 15.00 2/10/2018 11/20/2014 56,603 $ 4.24 11/20/2021 Total warrants outstanding 118,603 |
Schedule of reserved shares for future issuance | The Company has reserved shares of its common stock for future issuance as follows: June 30, 2015 Stock options outstanding 1,391,758 Shares available for grant under stock option plans 1,080,992 Restricted stock units 14,000 Common stock warrants 118,603 Total shares reserved for future issuance 2,605,353 |
Schedule of stock option activity | The table below summarizes stock option activity for the six month period ended June 30, 2015: Number of Shares Weighted Average Exercise Price Outstanding as of December 31, 2014 1,272,581 $ 4.19 Granted 171,370 7.31 Exercised — — Expired (1,260 ) 32.50 Forfeited (50,933 ) 5.74 Outstanding as of June 30, 2015 1,391,758 $ 4.49 Exercisable as of June 30, 2015 646,543 $ 2.70 |
Schedule of stock option valuation assumptions | The weighted-average assumptions used in the Black-Scholes valuation model for equity awards granted during the three and six month periods ended June 30, 2015 and 2014 are shown in the table below. Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Expected volatility 97.39 % 80 % 97.39 % 80 % Expected dividends — — — — Expected life in years 6 7 6 7 Risk-free interest rate 1.7 % 2.05 % 1.7 % 2.14 % |
Schedule of share-based compensation | The Company recognized non-cash share-based compensation expense in its research and development and general and administrative expenses as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2015 2014 2015 2014 Research and development $ 61 $ 20 $ 131 $ 37 General and administrative 253 420 451 503 Total $ 314 $ 440 $ 582 $ 540 |
The Company (Details)
The Company (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (69,371) | $ (57,819) |
Significant Accounting Polici24
Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Feb. 14, 2014USD ($)$ / sharesshares | Feb. 06, 2014 | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) |
Class of Stock [Line Items] | ||||
Issuance of common stock at IPO (in shares) | 3,100,000 | |||
Share price | $ / shares | $ 12 | |||
Issuance of common stock at IPO | $ | $ 33,400 | |||
Payment of initial public offering costs | $ | $ 3,800 | $ 36 | $ 3,737 | |
Common Stock | ||||
Class of Stock [Line Items] | ||||
Stockholders' Equity, Reverse Stock Split | 1-for-6.5 | |||
Reverse stock split ratio | 0.1538 | |||
Issuance of common stock for preferred stock (unaudited) (in shares) | 3,644,354 | |||
Issuance of common stock for convertible notes and accrued interest (unaudited) (in shares) | 1,197,289 | |||
Issuance of common stock for preferred stock warrant (unaudited) (in shares) | 593,589 |
Significant Accounting Polici25
Significant Accounting Policies Assets Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 14,226 | $ 16,765 |
Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 14,226 | 16,765 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 14,226 | 16,765 |
Fair Value, Inputs, Level 2 | Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 14,226 | 16,765 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 0 | $ 0 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator [Abstract] | ||||
Net loss | $ (6,379) | $ (5,423) | $ (11,552) | $ (7,123) |
Denominator [Abstract] | ||||
Weighted average shares outstanding - basic and diluted (in shares) | 8,864,603 | 8,855,114 | 8,863,868 | 6,733,095 |
Net loss per share - basic and diluted (in dollars per share) | $ (0.72) | $ (0.61) | $ (1.30) | $ (1.06) |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities (Details) - shares | Feb. 14, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Shares issued for conversion of debt | 1,197,289 | ||||
Common Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Issuance of common stock for preferred stock (unaudited) (in shares) | 3,644,354 | ||||
Issuance of common stock for preferred stock warrant (unaudited) (in shares) | 593,589 | ||||
Common stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities not included in calculation of diluted net loss per common share | 1,381,921 | 816,695 | 1,327,149 | 749,225 | |
Restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities not included in calculation of diluted net loss per common share | 14,750 | 24,000 | 15,500 | 24,000 | |
Common stock warrants | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities not included in calculation of diluted net loss per common share | 118,603 | 62,000 | 118,603 | 46,586 |
Balance Sheet Items - Investmen
Balance Sheet Items - Investments in Equity Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Available-for-sale Securities [Abstract] | ||
Amortized Cost | $ 8,681 | $ 14,706 |
Unrealized Gains | 0 | 0 |
Unrealized Loss | (6) | (8) |
Short-term investments | 8,675 | 14,698 |
Certificates of Deposit | ||
Available-for-sale Securities [Abstract] | ||
Amortized Cost | 8,681 | 14,706 |
Unrealized Gains | 0 | 0 |
Unrealized Loss | (6) | (8) |
Short-term investments | $ 8,675 | $ 14,698 |
Balance Sheet Items - Accrued L
Balance Sheet Items - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Accrued Liabilities [Abstract] | ||
Accrued clinical trial expenses | $ 2,330 | $ 393 |
Accrued compensation | 523 | 909 |
Other accruals | 648 | 103 |
Total | $ 3,501 | $ 1,405 |
License Agreements (Details)
License Agreements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2006 | Dec. 31, 2007 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
License costs | $ 4,240,000 | $ 3,875,000 | $ 7,609,000 | $ 4,332,000 | ||
USCRF | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Annual licensing fee | $ 120,000 | |||||
Potential milestone payments | 6,100,000 | 6,100,000 | ||||
Payments upon execution of a sub license | $ 35,000 | |||||
Percentage of non-royalty based on sub-licensee payments received | 25.00% | |||||
License costs | $ 30,000 | $ 60,000 | ||||
Vanderbilt | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Potential milestone payments | $ 1,100,000 | |||||
Percentage of non-royalty based on sub-licensee payments received | 25.00% | |||||
Royalty payment percentage | 5.00% | |||||
Annual minimum royalties | $ 10,000 | |||||
Potential minimum annual royalties | $ 25,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) $ in Thousands | Feb. 14, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Debt Instrument [Line Items] | |||||
Convertible promissory notes converted | $ 7,900 | ||||
Shares issued for conversion of debt | 1,197,289 | ||||
Interest expenses | $ 141 | $ 0 | $ 284 | $ 78 | |
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Convertible promissory notes accrued interest converted | $ 728 | ||||
Interest expenses | $ 0 | $ 78 |
Term Loan (Details)
Term Loan (Details) | Nov. 20, 2014USD ($)payment$ / sharesshares | Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) |
Debt Instrument [Line Items] | |||
Number of shares of stock to be acquired | shares | 56,603 | ||
Warrants exercisable price per share (in dollars per share) | $ / shares | $ 4.24 | ||
Warrants not settleable in cash, fair value disclosure | $ 192,450 | ||
Secured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Variable rate floor | 3.25% | ||
Interest rate, effective percentage | 5.50% | 5.50% | |
Payments of debt issuance costs | $ 50,000 | ||
Debt interest expense | $ 141,000 | $ 284,000 | |
Secured Debt [Member] | Initial Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 7,000,000 | ||
Number of monthly payments | payment | 36 | ||
Debt instrument fee amount | $ 120,000 | ||
Periodic payment rerms, balloon payment to be paid | 60,000 | ||
Secured Debt [Member] | Second Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 5,000,000 |
Stockholders' equity (deficit33
Stockholders' equity (deficit) - Series A Preferred Stock, Warrants, Common Stock (Details) - $ / shares | Feb. 14, 2014 | Nov. 30, 2013 | Jun. 30, 2015 | Dec. 31, 2014 | Nov. 20, 2014 |
Class of Stock [Line Items] | |||||
Number of shares of stock to be acquired | 56,603 | ||||
Warrants exercisable price per share (in dollars per share) | $ 4.24 | ||||
Common stock warrants | 118,603 | ||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock for preferred stock (unaudited) (in shares) | 3,644,354 | ||||
Issuance of common stock for preferred stock warrant (unaudited) (in shares) | 593,589 | ||||
Number of shares of stock to be acquired | 56,603 | ||||
Warrants exercisable price per share (in dollars per share) | $ 4.24 | ||||
Underwriter | Common Stock | |||||
Class of Stock [Line Items] | |||||
Number of shares of stock to be acquired | 62,000 | ||||
Period from effective date of initial public offering until warrants are exercisable | 1 year | ||||
Warrants exercisable price per share (in dollars per share) | $ 15 | ||||
Warrant, February 2014 | |||||
Class of Stock [Line Items] | |||||
Warrants exercisable price per share (in dollars per share) | $ 15 | ||||
Common stock warrants | 62,000 | ||||
Warrant, November 2014 | |||||
Class of Stock [Line Items] | |||||
Warrants exercisable price per share (in dollars per share) | $ 4.24 | ||||
Common stock warrants | 56,603 | ||||
CEO | Restricted stock units | |||||
Class of Stock [Line Items] | |||||
Number of award issued (in shares) | 24,000 | 3,000 |
Stockholders' equity (deficit34
Stockholders' equity (deficit) - Shared Reserved for Future Issuance (Details) - shares | Jun. 30, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||
Stock options outstanding | 1,391,758 | 1,272,581 |
Shares available for grant under stock option plans | 1,080,992 | |
Restricted stock units | 14,000 | |
Common stock warrants | 118,603 | |
Total shares reserved for future issuance | 2,605,353 |
Stockholders' equity (deficit35
Stockholders' equity (deficit) - Stock Option Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | May. 15, 2014 | Nov. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 24, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for grant under stock option plans | 1,080,992 | 1,080,992 | |||||
Number of Shares: | |||||||
Outstanding at the beginning of the period (in shares) | 1,272,581 | ||||||
Granted (in shares) | 171,370 | ||||||
Exercised (in shares) | 0 | ||||||
Expired (in shares) | (1,260) | ||||||
Cancelled (in shares) | (50,933) | ||||||
Outstanding at the end of the period (in shares) | 1,391,758 | 1,391,758 | |||||
Weighted Average Exercise Price | |||||||
Outstanding at the beginning of the period (in dollars per share) | $ 4.19 | ||||||
Granted (in dollars per share) | 7.31 | ||||||
Exercised (in dollars per share) | 0 | ||||||
Expired (in dollars per share) | 32.50 | ||||||
Cancelled (in dollars per share) | 5.74 | ||||||
Outstanding at the end of the period (in dollars per share) | $ 4.49 | $ 4.49 | |||||
Exercisable | |||||||
Exercisable at the end of the period (in shares) | 646,543 | 646,543 | |||||
Weighted average exercise price for exercisable options (in dollars per share) | $ 2.70 | $ 2.70 | |||||
Assumptions used to determine the fair value of the stock options | |||||||
Volatility (as a percent) | 97.39% | 80.00% | 97.39% | 80.00% | |||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||
Expected life in years | 6 years | 7 years | 6 years | 7 years | |||
Risk free interest rate (as a percent) | 1.70% | 2.05% | 1.70% | 2.14% | |||
Stock based compensation expense | $ 314 | $ 440 | $ 582 | $ 540 | |||
Research and development | |||||||
Assumptions used to determine the fair value of the stock options | |||||||
Stock based compensation expense | 61 | 20 | 131 | 37 | |||
General and administrative | |||||||
Assumptions used to determine the fair value of the stock options | |||||||
Stock based compensation expense | $ 253 | $ 420 | $ 451 | $ 503 | |||
Restricted stock units | CEO | |||||||
Restricted stock units | |||||||
Number of award issued (in shares) | 24,000 | 3,000 | |||||
Restricted stock units | Vesting on October 21, 2014 | CEO | |||||||
Restricted stock units | |||||||
Award vesting rights percentage | 25.00% | ||||||
Restricted stock units | Vesting Equal Monthly Installments after Nov 1, 2014 | CEO | |||||||
Restricted stock units | |||||||
Award vesting rights percentage | 75.00% | ||||||
2007 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Increase in number of shares authorized under the plan | 673,923 | ||||||
Number of shares authorized under the plan | 1,283,226 | 2,483,226 | |||||
Shares available for grant under stock option plans | 1,080,992 | 1,080,992 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Lease | ||||
Rent expense | $ 29 | $ 13 | $ 55 | $ 26 |
Related Party Transactions (Det
Related Party Transactions (Details) - Jun. 30, 2014 - USD ($) $ in Thousands | Total | Total |
Care Capital, LLC | ||
Related Party Transactions [Line Items] | ||
Expense for services provided | $ 50 | $ 70 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | Jul. 31, 2015 | Jul. 22, 2015 | Jul. 16, 2015 | Feb. 14, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Nov. 20, 2014 |
Subsequent Event [Line Items] | |||||||
Issuance of common stock (in shares) | 3,100,000 | ||||||
Issuance of warrants | 56,603 | ||||||
Warrants exercisable price per share (in dollars per share) | $ 4.24 | ||||||
Proceeds from issuance of equity | $ 0 | $ 37,200,000 | |||||
Payment of equity issuance costs | $ 3,800,000 | $ 36,000 | $ 3,737,000 | ||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Maximum shares authorized to be sold during period (in shares) | 7,500,000 | ||||||
Issuance of common stock (in shares) | 1,500,000 | ||||||
Issuance of warrants | 1,500,000 | ||||||
Shares issued, price per share (in dollars per share) | $ 5 | ||||||
Warrants exercisable price per share (in dollars per share) | $ 6.25 | ||||||
Warrants exercisable term | 5 years | ||||||
Proceeds from issuance of equity | $ 7,100,000 | ||||||
Payment of equity issuance costs | $ 1,000,000 | ||||||
Over-Allotment Option | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of common stock (in shares) | 112,500 | ||||||
Issuance of warrants | 225,000 | ||||||
Term to purchase additional shares of common stock | 45 days | ||||||
Maximum amount of additional common stock available to underwriters (in shares) | 225,000 | ||||||
Additional common stock available to underwriters (in dollars per share) | $ 4.99 | ||||||
Option to purchase warrants (in shares) | 225,000 | ||||||
Additional warrants available to underwriters (in dollars per warrant) | $ 0.01 | ||||||
Purchase price per warrant | $ 0.01 | ||||||
Proceeds from issuance of warrants | $ 2,250 | ||||||
Shares issued, price per share (in dollars per share) | $ 4.99 | ||||||
Proceeds from issuance of common stock | $ 561,375 |