Reata Pharmaceuticals (RETA) 10-Q 11 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 09, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Trading Symbol	RETA
Entity Registrant Name	REATA PHARMACEUTICALS INC
Entity Central Index Key	1,358,762
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Common Stock A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		7,740,354
Common Stock B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		14,585,273

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 92,365	$ 42,008
Federal income tax receivable	17,170	31,926
Prepaid expenses and other current assets	3,389	3,325
Total current assets	112,924	77,259
Property and equipment, net	942	1,142
Other assets	554	553
Total assets	114,420	78,954
Liabilities and stockholders’ deficit
Accounts payable	1,552	3,531
Accrued direct research liabilities	4,205	3,529
Other current liabilities	4,649	4,030
Current portion of deferred revenue	49,595	49,730
Total current liabilities	60,001	60,820
Other long-term liabilities	116	249
Deferred revenue, net of current portion	266,447	291,041
Total noncurrent liabilities	266,563	291,290
Commitments and contingencies
Stockholders’ deficit:
Additional paid-in capital	72,235	10,036
Shareholder notes receivable	(81)	(81)
Accumulated deficit	(284,321)	(283,127)
Total stockholders’ deficit	(212,144)	(273,156)
Total liabilities and stockholders’ deficit	114,420	78,954
Common Stock A
Stockholders’ deficit:
Common stock value	8
Common Stock B
Stockholders’ deficit:
Common stock value	$ 15	$ 16

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Common Stock A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	7,663,553	0
Common stock, shares outstanding	7,663,553	0
Common Stock B
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	14,662,074	15,998,106
Common stock, shares outstanding	14,662,074	15,998,106

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Collaboration revenue
License and milestone	$ 12,365	$ 12,365	$ 24,730	$ 25,294
Other revenue	1		74
Total collaboration revenue	12,366	12,365	24,804	25,294
Expenses
Research and development	9,075	9,688	18,381	18,266
General and administrative	4,537	3,369	7,744	6,223
Depreciation and amortization	179	529	367	1,062
Total expenses	13,791	13,586	26,492	25,551
Other income
Investment income	28	8	51	16
Total other income	28	8	51	16
Loss before (benefit) provision for taxes on income	(1,397)	(1,213)	(1,637)	(241)
(Benefit) provision for taxes on income	(461)	482	(443)	96
Net loss	$ (936)	$ (1,695)	$ (1,194)	$ (337)
Net loss per share—basic	$ (0.05)	$ (0.11)	$ (0.07)	$ (0.02)
Net loss per share—diluted	$ (0.05)	$ (0.11)	$ (0.07)	$ (0.02)
Weighted-average number of common shares used in net loss per share basic	18,562,302	15,973,020	17,274,574	15,970,022
Weighted-average number of common shares used in net loss per share diluted	18,562,302	15,973,020	17,274,574	15,970,022

Unaudited Consolidated Stateme5

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities
Net loss	$ (1,194)	$ (337)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	367	1,062
Stock-based compensation expense	735	693
Provision for deferred taxes on income		9,052
Loss on disposal of property and equipment		2
Changes in operating assets and liabilities:
Receivable from collaboration arrangements	(735)	223
Prepaid expenses and other current assets	(1,322)	(218)
Other assets	(1)	234
Accounts payable	(2,159)	(454)
Accrued direct research and other current liabilities	2,442	2,075
Federal income tax receivable/payable	14,756	(8,955)
Deferred revenue	(24,729)	(24,594)
Net cash used in operating activities	(11,840)	(21,217)
Investing activities
Purchases of property and equipment	(167)	(240)
Net cash used in investing activities	(167)	(240)
Financing activities
Proceeds from issuance of common stock from initial public offering	64,705
Payments on deferred offering costs	(2,322)
Exercise of options and related tax withholdings	26	15
Payment of capital lease	(45)	(45)
Net cash provided by (used in) financing activities	62,364	(30)
Net increase (decrease) in cash and cash equivalents	50,357	(21,487)
Cash and cash equivalents at beginning of year	42,008	87,758
Cash and cash equivalents at end of period	92,365	$ 66,271
Supplemental disclosures
Income taxes paid	18
Accrued deferred offering costs	$ 306

Description of Business

Description of Business	6 Months Ended
	Jun. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Description of Business	1. Description of Business Reata Pharmaceuticals, Inc., or the Company, is a clinical stage biopharmaceutical company located in Irving, Texas focused on identifying, developing, and commercializing product candidates that modulate the activity of key regulatory proteins involved in the biology of mitochondrial function, oxidative stress and inflammation to address the unmet medical needs of patients with a variety of serious or life threatening diseases. The Company operates as a single segment of business. The Company’s lead product candidates, bardoxolone methyl and omaveloxolone, are members of a class of small molecules called antioxidant inflammation modulators (AIMs). AIMs bind to Keap1, a protein that coordinates cellular response to reactive oxygen and other byproducts of cellular energy production, inflammation, and environmental toxicants. Bardoxolone methyl is in Phase 3 clinical development for the treatment of pulmonary arterial hypertension associated with connective tissue disease (CTD-PAH), and Phase 2 clinical development for the treatment of idiopathic pulmonary arterial hypertension and pulmonary hypertension due to interstitial lung disease, each of which are subsets of pulmonary hypertension. The Company has initiated activity on its Phase 3 trial in CTD-PAH and plans to begin enrolling patients in the second half of 2016. Omaveloxolone is in Phase 2 clinical development for the treatment of multiple diseases, including Friedreich’s ataxia (FA), mitochondrial myopathies (MM), and metastatic melanoma. Beyond its lead product candidates, the Company has several promising preclinical programs employing both AIMs and other small molecules with different mechanisms of action. The Company believes its product candidates and preclinical programs have the potential to improve clinical outcomes in numerous underserved patient populations. The Company’s consolidated financial statements include the accounts of all majority-owned subsidiaries that are required to be consolidated. Accordingly, the Company’s share of net earnings and losses from these subsidiaries is included in the consolidated statements of operations. Intracompany profits, transactions, and balances have been eliminated in consolidation. On January 6, 2016, the Company effected a 4.4-to-1 reverse split of its common stock, and an automatic conversion of its common stock into Class B common stock. Upon the effectiveness of the reverse stock split and conversion, (i) every 4.4 shares of outstanding common stock were combined into one share of Class B common stock, (ii) the number of shares of common stock for which each outstanding option to purchase common stock is exercisable was proportionally decreased on a 4.4-to-1 basis and converted into an option to purchase Class B common stock, and (iii) the exercise price of each outstanding option to purchase common stock was proportionately increased on a 4.4-to-1 basis. All of the outstanding common stock share numbers, common stock options, share prices, exercise prices and per share amounts have been adjusted in these consolidated financial statements, on a retroactive basis, to reflect this 4.4-to-1 reverse stock split for all periods presented. The par value per share was not adjusted as a result of the reverse stock split. On May 11, 2016, the Company effected a 1.45-to-1 reverse split of its common stock. Upon the effectiveness of the reverse stock split, (i) every 1.45 shares of outstanding common stock were combined into one share of common stock of the same class, (ii) the number of shares of common stock for which each outstanding option to purchase common stock is exercisable was proportionally decreased on a 1.45-to-1 basis, and (iii) the exercise price of each outstanding option to purchase common stock was proportionately increased on a 1.45-to-1 basis. All of the outstanding common stock share numbers, common stock options, share prices, exercise prices and per share amounts have been adjusted in these consolidated financial statements, on a retroactive basis, to reflect this 1.45-to-1 reverse stock split for all periods presented. The par value per share was not adjusted as a result of the reverse stock split. On May 25, 2016, the Company’s registration statement on Form S-1 (File No. 333-208843) relating to its initial public offering (IPO), of its common stock was declared effective by the U.S. Securities and Exchange Commission (SEC). The shares began trading on The NASDAQ Global Market on May 26, 2016. The public offering price of the shares sold in the offering was $11.00 per share. The IPO closed on June 1, 2016 for 6,325,000 shares of its Class A common stock, which included 825,000 shares of its Class A common stock issued pursuant to the over-allotment option granted to the underwriters. The Company received total proceeds from the offering of $60.9 million, net of underwriting discounts and commissions and offering expenses.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the annual consolidated financial statements and footnotes thereto of the Company. Revenue Recognition The Company’s revenue to date has been generated primarily through collaborative licensing agreements with AbbVie Ltd. (AbbVie) and Kyowa Hakko Kirin Co., Ltd. Revenues for periods shown consist of the recognition of deferred revenue from upfront payments and milestone payments received in 2012 and prior years. The Company has not generated any revenue based on the sale of products. In June 2013, the Company entered into a research collaboration with a disease advocacy organization. Under the agreement, the Company may be provided milestone payments to fund research and development activities estimated over a two-year period. The Company recorded collaboration revenue totaling $700,000 related to milestone payments during the six months ended June 30, 2015. Research and Development Costs With respect to its omaveloxolone programs and its collaboration agreement with AbbVie, the Company was responsible for a certain initial amount in early development costs before AbbVie began sharing development costs equally. As of June 30, 2016 the Company had incurred all of these initial costs, after which payments from AbbVie with respect to research and development costs incurred by the Company were recorded as a reduction in research and development expenses. The Company’s expenses were reduced by $661,000 for AbbVie’s share of research and development costs for the three months ended June 30, 2016. Accordingly, as of June 30, 2016, the Company had receivables in the amount of $661,000 included in prepaid expenses and other current assets on the consolidated balance sheet. The Company bases its expense accruals related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conduct and manage clinical trials on its behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing costs, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the Company does not identify costs that it has begun to incur or if the Company underestimates or overestimates the level of services performed or the costs of these services, its actual expenses could differ from its estimates. To date, the Company has not experienced significant changes in its estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, the Company cannot assure that it will not make changes to its estimates in the future as the Company becomes aware of additional information about the status or conduct of its clinical trials and other research activities. Stock-Based Compensation The Company accounts for its equity-based compensation awards in accordance with Accounting Standard Codification ASC 718 Compensation—Stock Compensation The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock option awards, which takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies, forfeitures rate and the risk-free interest rate. Prior to the Company’s IPO of its common stock, the fair values of the shares of common stock underlying the Company’s share-based awards were estimated on each grant date using a probability-weighted expected return method. Following the close of its IPO in June 2016, the fair values of its common stock underlying its share-based awards were estimated using observable market prices. Risks and Uncertainties The Company has experienced losses and negative operating cash flows for many years since inception and has no marketed drug or other products. The Company’s ability to generate future revenue depends upon the results of its development programs, the success of which cannot be guaranteed. The Company may need to raise additional equity capital in the future in order to fund its operations. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Fair Value of Financial Instruments The fair values of the Company’s stockholder notes receivable were approximately $156,000 and $138,000 at June 30, 2016 and December 31, 2015, respectively. The fair value was calculated using an income approach to estimate the present value of expected future cash flows to be received under the notes. The measurement is considered to be based primarily on Level 3 inputs used in the calculation, including the discount rate applied and the estimate of future cash flows. Net Income (Loss) per Share Basic and diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. The Company’s potentially dilutive shares, which include unvested restricted stock and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net income (loss) per share when their effect is dilutive. For periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company uses the two-class method to compute net income (loss) per common share attributable to common stockholders because the Company has issued securities, other than Class A and Class B common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of restricted common stock are entitled to the dividend amount paid to common stockholders on an as-if-converted-to-common stock basis when declared by the Company’s Board of Directors. As a result, all restricted common stock are considered to be participating securities. Deferred Offering Costs Deferred offering costs, which primarily consist of direct incremental accounting, legal, and printing fees relating to the initial public offering (IPO), were initially capitalized. The deferred offering costs totaling $3,489,000 were subsequently offset against IPO proceeds upon the completion of the IPO on June 1, 2016. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation–Stock Compensation: Improvements to Employee Share-Based Payment Accounting,

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	3. Income Taxes The Company’s effective tax rate varies with the statutory rate due primarily to the impact of nondeductible stock-based compensation and the changes in valuation allowance related to certain deferred tax assets generated or utilized in the applicable period. The Company’s deferred tax assets have been fully offset by a valuation allowance at June 30, 2016 and the Company expects to maintain this valuation allowance until there is sufficient evidence that future earnings can be achieved, which is uncertain at this time.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	4. Stock-Based Compensation Stock Options The following table summarizes stock-based compensation expense reflected in the consolidated statements of operations (in thousands): Three Months ended Six Months ended June 30, June 30, 2016 2015 2016 2015 Research and development $ 212 $ 166 $ 350 $ 355 General and administrative 234 182 385 338 446 348 735 693 The following table summarizes stock option activity as of June 30, 2016, and changes during the six months ended June 30, 2016, under the 2007 LTIP and standalone option agreements: Number of Options Weighted- Average Exercise Price Outstanding at January 1, 2016 550,675 16.11 Granted 830,759 11.00 Exercised (2,521 ) 10.24 Forfeited (1,453 ) 13.24 Expired (19,708 ) 11.50 Outstanding at June 30, 2016 1,357,752 13.07 Exercisable at June 30, 2016 339,341 17.58 The total intrinsic value of all outstanding options and exercisable options at June 30, 2016 was $11,074,000 and $2,353,000, respectively.

Related Party Disclosures

Related Party Disclosures	6 Months Ended
	Jun. 30, 2016
Related Party Transactions [Abstract]
Related Party Transactions	5. Related-Party Transactions The Company paid approximately $440,000 and $643,000 to certain stockholders, for sponsored research, research and development consulting services, contract manufacturing services, regulatory and medical consulting services, license fees, and clinical study services during six months ended June 30, 2016 and 2015, respectively. These amounts are recorded in research and development expense in the accompanying consolidated statements of operations. Approximately $18,000 was due to stockholders and included in accounts payable and other current liabilities for services related to contract manufacturing services, research and development consulting services, and clinical study services at June 30, 2016.

Net Loss per Share

Net Loss per Share	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Net Loss per Share	6. Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months ended Six Months ended June 30, June 30, 2016 2015 2016 2015 Numerator Net loss (in thousands) $ (936 ) $ (1,695 ) $ (1,194 ) $ (337 ) Denominator Weighted-average number of common shares used in net loss per share – basic 18,562,302 15,973,020 17,274,574 15,970,022 Dilutive potential common shares — — — — Weighted-average number of common shares used in net loss per share – diluted 18,562,302 15,973,020 17,274,574 15,970,022 Net loss per share – basic (0.05 ) (0.11 ) (0.07 ) (0.02 ) Net loss per share – diluted (0.05 ) (0.11 ) (0.07 ) (0.02 ) The number of weighted average options that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive represented 1,357,752 for the six months and three months ended June 30, 2016 and 573,094 shares for the six months and three months ended June 30, 2015.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2016
Subsequent Events [Abstract]
Subsequent Events	7. Subsequent Events On July 1, 2016, the Company received a tax refund from the Internal Revenue Service totaling $17,170,000.

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the annual consolidated financial statements and footnotes thereto of the Company.
Revenue Recognition	Revenue Recognition The Company’s revenue to date has been generated primarily through collaborative licensing agreements with AbbVie Ltd. (AbbVie) and Kyowa Hakko Kirin Co., Ltd. Revenues for periods shown consist of the recognition of deferred revenue from upfront payments and milestone payments received in 2012 and prior years. The Company has not generated any revenue based on the sale of products. In June 2013, the Company entered into a research collaboration with a disease advocacy organization. Under the agreement, the Company may be provided milestone payments to fund research and development activities estimated over a two-year period. The Company recorded collaboration revenue totaling $700,000 related to milestone payments during the six months ended June 30, 2015.
Research and Development Costs	Research and Development Costs With respect to its omaveloxolone programs and its collaboration agreement with AbbVie, the Company was responsible for a certain initial amount in early development costs before AbbVie began sharing development costs equally. As of June 30, 2016 the Company had incurred all of these initial costs, after which payments from AbbVie with respect to research and development costs incurred by the Company were recorded as a reduction in research and development expenses. The Company’s expenses were reduced by $661,000 for AbbVie’s share of research and development costs for the three months ended June 30, 2016. Accordingly, as of June 30, 2016, the Company had receivables in the amount of $661,000 included in prepaid expenses and other current assets on the consolidated balance sheet. The Company bases its expense accruals related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conduct and manage clinical trials on its behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing costs, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the Company does not identify costs that it has begun to incur or if the Company underestimates or overestimates the level of services performed or the costs of these services, its actual expenses could differ from its estimates. To date, the Company has not experienced significant changes in its estimates of accrued research and development expenses after a reporting period. However, due to the nature of estimates, the Company cannot assure that it will not make changes to its estimates in the future as the Company becomes aware of additional information about the status or conduct of its clinical trials and other research activities.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for its equity-based compensation awards in accordance with Accounting Standard Codification ASC 718 Compensation—Stock Compensation The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock option awards, which takes into consideration various factors, including the exercise price of the award, the expected term of the award, the current price of the underlying shares, the expected volatility of the underlying share price based on peer companies, forfeitures rate and the risk-free interest rate. Prior to the Company’s IPO of its common stock, the fair values of the shares of common stock underlying the Company’s share-based awards were estimated on each grant date using a probability-weighted expected return method. Following the close of its IPO in June 2016, the fair values of its common stock underlying its share-based awards were estimated using observable market prices.
Risks and Uncertainties	Risks and Uncertainties The Company has experienced losses and negative operating cash flows for many years since inception and has no marketed drug or other products. The Company’s ability to generate future revenue depends upon the results of its development programs, the success of which cannot be guaranteed. The Company may need to raise additional equity capital in the future in order to fund its operations.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The fair values of the Company’s stockholder notes receivable were approximately $156,000 and $138,000 at June 30, 2016 and December 31, 2015, respectively. The fair value was calculated using an income approach to estimate the present value of expected future cash flows to be received under the notes. The measurement is considered to be based primarily on Level 3 inputs used in the calculation, including the discount rate applied and the estimate of future cash flows.
Net Income (Loss) per Share	Net Income (Loss) per Share Basic and diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. The Company’s potentially dilutive shares, which include unvested restricted stock and options to purchase common stock, are considered to be common stock equivalents and are only included in the calculation of diluted net income (loss) per share when their effect is dilutive. For periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company uses the two-class method to compute net income (loss) per common share attributable to common stockholders because the Company has issued securities, other than Class A and Class B common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of restricted common stock are entitled to the dividend amount paid to common stockholders on an as-if-converted-to-common stock basis when declared by the Company’s Board of Directors. As a result, all restricted common stock are considered to be participating securities.
Deferred Offering Costs	Deferred Offering Costs Deferred offering costs, which primarily consist of direct incremental accounting, legal, and printing fees relating to the initial public offering (IPO), were initially capitalized. The deferred offering costs totaling $3,489,000 were subsequently offset against IPO proceeds upon the completion of the IPO on June 1, 2016.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), Leases In March 2016, the FASB issued ASU No. 2016-09, Compensation–Stock Compensation: Improvements to Employee Share-Based Payment Accounting,

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock Based Compensation Expense	The following table summarizes stock-based compensation expense reflected in the consolidated statements of operations (in thousands): Three Months ended Six Months ended June 30, June 30, 2016 2015 2016 2015 Research and development $ 212 $ 166 $ 350 $ 355 General and administrative 234 182 385 338 446 348 735 693
Summary of Stock Option Activity	The following table summarizes stock option activity as of June 30, 2016, and changes during the six months ended June 30, 2016, under the 2007 LTIP and standalone option agreements: Number of Options Weighted- Average Exercise Price Outstanding at January 1, 2016 550,675 16.11 Granted 830,759 11.00 Exercised (2,521 ) 10.24 Forfeited (1,453 ) 13.24 Expired (19,708 ) 11.50 Outstanding at June 30, 2016 1,357,752 13.07 Exercisable at June 30, 2016 339,341 17.58

Net Loss per Share (Tables)

Net Loss per Share (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Computation of Basic and Diluted Net Loss per Share	The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months ended Six Months ended June 30, June 30, 2016 2015 2016 2015 Numerator Net loss (in thousands) $ (936 ) $ (1,695 ) $ (1,194 ) $ (337 ) Denominator Weighted-average number of common shares used in net loss per share – basic 18,562,302 15,973,020 17,274,574 15,970,022 Dilutive potential common shares — — — — Weighted-average number of common shares used in net loss per share – diluted 18,562,302 15,973,020 17,274,574 15,970,022 Net loss per share – basic (0.05 ) (0.11 ) (0.07 ) (0.02 ) Net loss per share – diluted (0.05 ) (0.11 ) (0.07 ) (0.02 )

Description of Business - Addit

Description of Business - Additional Information (Details) $ / shares in Units, $ in Thousands	May 25, 2016USD ($)$ / sharesshares	May 11, 2016	Jan. 06, 2016	Jun. 30, 2016USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Reverse stock split, Description		On May 11, 2016, the Company effected a 1.45-to-1 reverse split of its common stock.	On January 6, 2016, the Company effected a 4.4-to-1 reverse split of its common stock, and an automatic conversion of its common stock into Class B common stock.
Reverse stock split, ratio		0.690	0.227
Proceeds from issuance of common stock from initial public offering | $	$ 60,900			$ 64,705
IPO
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance price (in dollars per share) | $ / shares	$ 11
IPO | Common Stock A
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common stock	6,325,000
Over-Allotment Option | Common Stock A
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common stock	825,000

Summary of Significant Accoun17

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Significant Accounting Policies [Line Items]
Milestone payment period	2 years
Collaboration revenue			$ 700,000
Reduction in research and development expense		$ 661,000
Stockholder notes receivable		156,000	156,000	$ 138,000
Deferred offering costs		3,489,000	3,489,000
Prepaid Expenses and Other Current Assets
Significant Accounting Policies [Line Items]
Receivables		$ 661,000	$ 661,000

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation expense	$ 446	$ 348	$ 735	$ 693
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation expense	212	166	350	355
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation expense	$ 234	$ 182	$ 385	$ 338

Stock-Based Compensation - Su19

Stock-Based Compensation - Summary of Stock Option Activity (Details)	6 Months Ended
	Jun. 30, 2016$ / sharesshares
Number of Options, Abstract
Number of Options, Outstanding - Beginning balance | shares	550,675
Number of Options, Granted | shares	830,759
Number of Options, Exercised | shares	(2,521)
Number of Options, Forfeited | shares	(1,453)
Number of Options, Expired | shares	(19,708)
Number of Options, Outstanding - Ending balance | shares	1,357,752
Number of Options, Exercisable at June 30, 2016 | shares	339,341
Weighted Average Exercise Price, Abstract
Weighted-Average Exercise Price, Outstanding - Beginning balance | $ / shares	$ 16.11
Weighted-Average Exercise Price, Granted | $ / shares	11
Weighted-Average Exercise Price, Exercised | $ / shares	10.24
Weighted-Average Exercise Price, Forfeited | $ / shares	13.24
Weighted-Average Exercise Price, Expired | $ / shares	11.50
Weighted-Average Exercise Price, Outstanding - Ending balance | $ / shares	13.07
Weighted-Average Exercise Price, Exercisable at June 30, 2016 | $ / shares	$ 17.58

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Details)	Jun. 30, 2016USD ($)
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Total intrinsic value of outstanding options	$ 11,074,000
Total intrinsic value of exercisable options	$ 2,353,000

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Details) - Stockholders - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Related Party Transaction [Line Items]
Due to stockholders	$ 18,000
Research and Development Expense
Related Party Transaction [Line Items]
Payments made to stockholders	$ 440,000	$ 643,000

Net Loss per Share - Computatio

Net Loss per Share - Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator
Net loss	$ (936)	$ (1,695)	$ (1,194)	$ (337)
Denominator
Weighted-average number of common shares used in net loss per share – basic	18,562,302	15,973,020	17,274,574	15,970,022
Weighted-average number of common shares used in net loss per share – diluted	18,562,302	15,973,020	17,274,574	15,970,022
Net loss per share – basic	$ (0.05)	$ (0.11)	$ (0.07)	$ (0.02)
Net loss per share – diluted	$ (0.05)	$ (0.11)	$ (0.07)	$ (0.02)

Net Loss per Share - Additional

Net Loss per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Weighted average anti-dilutive shares excludes from computation of earnings per share	1,357,752	573,094	1,357,752	573,094

Subsequent Events (Details)

Subsequent Events (Details)	Jul. 01, 2016USD ($)
Subsequent Event
Subsequent Event [Line Items]
Tax refund received from internal revenue service	$ 17,170,000