Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Development Stage Company | ' |
a. | DEVELOPMENT STAGE COMPANY. Since inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. Accordingly, the Company is considered to be in the development stage and the Company’s financial statements are presented in that manner in accordance with U.S. generally accepted accounting principles. The Company’s primary focus is on the development and commercialization of its drug candidates. | | | | | | | | | | | | | | | |
Use of Estimates | ' |
b. | USE OF ESTIMATES. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | | | | | | | | | | | | | | | |
Cash and Cash Equivalents | ' |
c. | CASH AND CASH EQUIVALENTS. The Company considers all highly liquid instruments, purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist mainly of U.S. Treasury bills, certificates of deposit and money market funds. The Company has substantially all of its cash and cash equivalents deposited with one financial institution. | | | | | | | | | | | | | | | |
Certificates of Deposit | ' |
d. |
CERTIFICATES OF DEPOSIT. The certificates of deposit were issued by a banking institution and are recorded at cost plus accrued interest. The original maturity was greater than three months but did not exceed one year. Interest income is recorded in the statement of operations as it is earned. Carrying value at December 31, 2013 and 2012 approximates fair value. | | | | | | | | | | | | | | | | |
Short-Term Investments | ' |
e. |
SHORT-TERM INVESTMENTS. The Company invests in short-term investments in high credit-quality funds in order to obtain higher yields on its cash available for investments. As of December 31, 2013 and 2012 short-term investments consisted of a short-term bond fund. Such investments are not insured by the Federal Deposit Insurance Corporation. Short-term investments at December 31, 2013 and 2012 were considered trading securities. Trading securities are recorded at fair value based on the closing market price of the security. For trading securities, the Company charges realized gains and losses and unrealized gains and losses to earnings. Unrealized and realized losses on trading securities for the years ended December 31, 2013 and 2012 were nominal. | | | | | | | | | | | | | | | | |
Prepaid Expenses | ' |
f. | PREPAID EXPENSES. Prepaid expenses consist primarily of prepaid research fees, prepaid insurance and prepaid subscription fees. Prepaid research fees consist of advances for the Company’s drug development activities, including drug manufacturing, contracts for pre-clinical studies, clinical trials and studies, regulatory affairs and consulting. Such advances are recorded as expense as the related goods are received or the related services are performed. | | | | | | | | | | | | | | | |
Property and Equipment | ' |
g. | PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost. Depreciation is calculated to amortize the depreciable assets over their useful lives using the straight-line method and commences when the asset is placed in service. Leasehold improvements are amortized on a straight-line basis over the term of the lease or the estimated life of the improvement, whichever is shorter. Useful lives generally range from three years for computer equipment to three to six years for furniture and equipment and leasehold improvements. Expenditures for repairs and maintenance are charged to expenses as incurred. | | | | | | | | | | | | | | | |
Operating Leases | ' |
h. | OPERATING LEASES. The Company recognizes lease expense on a straight-line basis over the initial lease term. For leases that contain rent holidays, escalation clauses or tenant improvement allowances, the Company recognizes rent expense on a straight-line basis and records the difference between the rent expense and rental amount payable as deferred rent. As of December 31, 2013 and 2012, the Company had $21,877 and $22,643, respectively, of deferred rent in accrued expenses and other liabilities. | | | | | | | | | | | | | | | |
Fair Value of Financial Instruments | ' |
i. | FAIR VALUE OF FINANCIAL INSTRUMENTS. The Company’s financial instruments consist of cash and cash equivalents, certificates of deposit, short-term investments, accounts payable and accrued expenses and other liabilities, and warrants liability. At December 31, 2013, the fair value of these instruments approximated their carrying value. | | | | | | | | | | | | | | | |
Fair Value Measurements | ' |
| j. | FAIR VALUE MEASUREMENTS. Current Financial Accounting Standards Board (FASB) fair value guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, current FASB guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions that it believes market participants would use in pricing assets or liabilities (unobservable inputs classified within Level 3 of the hierarchy). | | | | | | | | | | | | | | |
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Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. |
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| | | | | Fair Value Measurements at Reporting Date Using | |
| | Balances as of | | | Quoted Prices in | | | Significant | | | Significant | |
December 31, | Active Markets | Other | Unobservable |
2013 | for Identical | Observable | Inputs |
| Assets/Liabilities | Inputs | (Level 3) |
| (Level 1) | (Level 2) | |
Money market funds | | $ | 25,693 | | | $ | 25,693 | | | $ | — | | | $ | — | |
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Certificates of deposit | | $ | 4,011,576 | | | $ | — | | | $ | 4,011,576 | | | $ | — | |
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Short-term investments | | $ | 17,483,062 | | | $ | 17,483,062 | | | $ | — | | | $ | — | |
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Warrants liability | | $ | 1,819,562 | | | $ | — | | | $ | — | | | $ | 1,819,562 | |
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| | | | | Fair Value Measurements at Reporting Date Using | |
| | Balances as of | | | Quoted Prices in | | | Significant | | | Significant | |
December 31, | Active Markets | Other | Unobservable |
2012 | for Identical | Observable | Inputs |
| Assets/Liabilities | Inputs | (Level 3) |
| (Level 1) | (Level 2) | |
Certificates of deposit | | $ | 6,502,825 | | | $ | — | | | $ | 6,502,825 | | | $ | — | |
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Short-term investments | | $ | 7,504,444 | | | $ | 7,504,444 | | | $ | — | | | $ | — | |
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Warrants liability | | $ | 498,587 | | | $ | — | | | $ | — | | | $ | 498,587 | |
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Warrants Liability | ' |
k. |
WARRANTS LIABILITY. In October 2011, the Company issued 1,523,370 warrants (the 2011 warrants) to purchase shares of the Company’s common stock in connection with a registered direct offering under the 2010 Shelf Registration Statement. The Company accounted for these warrants as a liability measured at fair value due to a provision included in the warrants agreement that provides the warrants holders with an option to require the Company (or its successor) to purchase their warrants for cash in an amount equal to their Black-Scholes Option Pricing Model (the Black-Scholes Model) value, in the event that certain fundamental transactions, as defined, occur. The fair value of the warrants liability is estimated using the Black-Scholes Model which requires inputs such as the expected term of the warrants, share price volatility and risk-free interest rate. These assumptions are reviewed on a quarterly basis and changes in the estimated fair value of the outstanding warrants are recognized each reporting period in the “Change in fair value of warrants liability” line in the statement of operations. As of December 31, 2013, 1,254,870 of the 2011 warrants remained outstanding. | | | | | | | | | | | | | | | | |
Research and Development | ' |
l. | RESEARCH AND DEVELOPMENT. Costs incurred in connection with research and development activities are expensed as incurred. These costs consist of direct and indirect costs associated with specific projects as well as fees paid to various entities that perform research related services for the Company. | | | | | | | | | | | | | | | |
Stock-Based Compensation | ' |
| m. | STOCK-BASED COMPENSATION. The Company recognizes expense in the statement of operations for the fair value of all stock-based payments to employees, directors and consultants, including grants of stock options and other share-based awards. For stock options, the Company uses the Black-Scholes option valuation model, the single-option award approach and straight-line attribution method. Using this approach, compensation cost is amortized on a straight-line basis over the vesting period of each respective stock option, generally three to five years. The Company estimates forfeitures and adjusts this estimate periodically based on actual forfeitures. | | | | | | | | | | | | | | |
For the years ended December 31, 2013, 2012 and 2011, the Company recorded stock-based compensation expense as follows: |
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| | 2013 | | | 2012 | | | 2011 | | | | | |
Research and development | | $ | 84,728 | | | $ | 100,221 | | | $ | 111,283 | | | | | |
General and administrative | | | 91,127 | | | | 239,818 | | | | 305,452 | | | | | |
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Total stock-based compensation | | $ | 175,855 | | | $ | 340,039 | | | $ | 416,735 | | | | | |
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Concentration of Credit Risk | ' |
n. | CONCENTRATION OF CREDIT RISK. The financial instruments that potentially subject the Company to concentration of credit risk are cash equivalents (i.e. money market funds), short-term investments and certificates of deposit. The Company places its cash equivalents with high-credit quality financial institutions. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses in these accounts. | | | | | | | | | | | | | | | |
Income Taxes | ' |
| o. | INCOME TAXES. The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. | | | | | | | | | | | | | | |
The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. |
The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company is not subject to U.S. federal, state and local tax examinations by tax authorities for years before 2010. If the Company were to subsequently record an unrecognized tax benefit, associated penalties and tax related interest expense would be reported as a component of income tax expense. |
Comprehensive Income (Loss) | ' |
p. | COMPREHENSIVE INCOME (LOSS). U.S. generally accepted accounting principles require that all components of comprehensive income (loss) be reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is net income (loss), plus certain other items that are recorded directly into stockholders’ equity. The Company has reported comprehensive income (loss) in the statement of stockholders’ equity as net income (loss). | | | | | | | | | | | | | | | |
Net Income (Loss) Per Share | ' |
| q. | NET INCOME (LOSS) PER SHARE. Basic income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of common stock equivalents, such as convertible preferred stock, stock options and restricted stock units. For all periods presented, all common stock equivalents were excluded because their inclusion would have been anti-dilutive. The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows, for the years ended December 31, 2013, 2012 and 2011: | | | | | | | | | | | | | | |
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| | 2013 | | | 2012 | | | 2011 | | | | | |
Options to purchase common stock | | | 3,428,906 | | | | 3,650,535 | | | | 3,723,108 | | | | | |
Warrants to purchase common stock | | | 4,848,620 | | | | 8,710,870 | | | | 1,523,370 | | | | | |
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Potential equivalent common stock excluded | | | 8,277,526 | | | | 12,361,405 | | | | 5,246,478 | | | | | |
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Potentially dilutive options to purchase common stock as of December 31, 2013, 2012 and 2011 have exercise prices ranging from $0.47 to $6.00. Potentially dilutive warrants to purchase common stock as of December 31, 2013, 2012 and 2011 have exercise prices ranging from $1.04 to $2.08. |
Segment Information | ' |
r. | SEGMENT INFORMATION. Management has determined that the Company operates in one reportable segment, which is the development and commercialization of pharmaceutical products. | | | | | | | | | | | | | | | |
Reclassifications | ' |
s. | RECLASSIFICATIONS. Certain prior year amounts in the financial statements have been reclassified to conform to the current year presentation. | | | | | | | | | | | | | | | |
Recently Issued Accounting Standards | ' |
t. | RECENTLY ISSUED ACCOUNTING STANDARDS. There are no recent accounting pronouncements which the Company anticipates will have a significant impact on the Company’s financial statements. | | | | | | | | | | | | | | | |