Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PTGX | |
Entity Registrant Name | PROTAGONIST THERAPEUTICS, INC | |
Entity Central Index Key | 1,377,121 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,479,663 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 50,395 | $ 21,084 |
Restricted cash - current | 10 | 10 |
Available-for-sale securities - current | 43,191 | 56,515 |
Receivable from collaboration partner - related party | 520 | 0 |
Research and development tax incentive receivable | 885 | 2,241 |
Prepaid expenses and other current assets | 2,703 | 3,394 |
Total current assets | 97,704 | 83,244 |
Property and equipment, net | 945 | 562 |
Restricted cash - noncurrent | 450 | 0 |
Available-for-sale securities - noncurrent | 11,316 | 10,150 |
Other assets | 0 | 34 |
Total assets | 110,415 | 93,990 |
Current liabilities: | ||
Accounts payable | 2,267 | 1,163 |
Accrued expenses and other payables | 8,241 | 5,272 |
Deferred revenue - related party | 41,739 | 0 |
Total current liabilities | 52,247 | 6,435 |
Deferred rent - noncurrent | 332 | 0 |
Total liabilities | 52,579 | 6,435 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.00001 par value, 10,000,000 shares authorized; and no shares issued and outstanding as of September 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.00001 par value, 90,000,000 shares authorized; 16,944,103 and 16,722,280 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Additional paid-in capital | 156,234 | 152,393 |
Accumulated other comprehensive gain (loss) | 100 | (245) |
Accumulated deficit | (98,498) | (64,593) |
Total stockholders’ equity | 57,836 | 87,555 |
Total liabilities and stockholders' equity | $ 110,415 | $ 93,990 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 16,944,103 | 16,722,280 |
Common stock, shares outstanding | 16,944,103 | 16,722,280 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
License and collaboration revenue - related party | $ 8,781 | $ 0 | $ 8,781 | $ 0 |
Operating expenses: | ||||
Research and development | 11,168 | 5,561 | 34,457 | 16,882 |
General and administrative | 2,593 | 1,577 | 8,708 | 4,387 |
Total operating expenses | 13,761 | 7,138 | 43,165 | 21,269 |
Loss from operations | (4,980) | (7,138) | (34,384) | (21,269) |
Interest income | 155 | 54 | 479 | 93 |
Change in fair value of redeemable convertible preferred stock tranche and warrant liabilities | 0 | 0 | 0 | (4,719) |
Other expense | 0 | 0 | 0 | (34) |
Net loss | (4,825) | (7,084) | (33,905) | (25,929) |
Net loss attributable to common stockholders | $ (4,825) | $ (7,377) | $ (33,905) | $ (26,487) |
Net loss per share attributable to common stockholders, basic and diluted (in usd per share) | $ (0.29) | $ (0.87) | $ (2.01) | $ (8.62) |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 16,911,575 | 8,483,189 | 16,851,672 | 3,071,456 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (4,825) | $ (7,084) | $ (33,905) | $ (25,929) |
Other comprehensive loss: | ||||
Gain on translation of foreign operations | 73 | 75 | 324 | 73 |
Unrealized gain on available-for-sale securities | 24 | 1 | 21 | 5 |
Comprehensive loss | $ (4,728) | $ (7,008) | $ (33,560) | $ (25,851) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (33,905) | $ (25,929) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 289 | 242 |
(Gain) loss on disposal of property and equipment | (62) | 34 |
Net amortization of premium on available-for-sale securities | 497 | 82 |
Stock-based compensation | 3,052 | 610 |
Change in fair value associated with redeemable convertible preferred stock tranche liability | 0 | 4,194 |
Change in fair value of redeemable convertible preferred stock warrant liability | 0 | 525 |
Changes in operating assets and liabilities: | ||
Research and development tax incentive receivable | 1,530 | (1,229) |
Receivable from collaboration partner - related party | 520 | 0 |
Prepaid expenses and other assets | 1,034 | (183) |
Accounts payable | 1,096 | 157 |
Accrued expenses and other payables | 3,271 | 1,205 |
Deferred revenue - related party | 41,739 | 0 |
Net cash provided by (used in) operating activities | 18,021 | (20,292) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment, net | (610) | (295) |
Purchase of available-for-sale securities | (28,154) | (6,396) |
Proceeds from maturities of available-for-sale securities | 39,835 | 11,688 |
Net cash provided by investing activities | 11,071 | 4,997 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of redeemable preferred stock, net of issuance costs | 0 | 22,508 |
Proceeds from issuance of common stock upon exercise of stock options and purchases under employee stock purchase plan | 789 | 143 |
Payment of deferred offering costs | (297) | 0 |
Proceeds from issuance of initial public offering, net of issuance cost | 0 | 84,508 |
Net cash provided by financing activities | 492 | 107,159 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 177 | 105 |
Net increase in cash, cash equivalents and restricted cash | 29,761 | 91,969 |
Cash, cash equivalents and restricted cash, beginning of period | 21,094 | 4,065 |
Cash, cash equivalents and restricted cash, end of period | 50,855 | 96,034 |
SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Conversion of redeemable convertible preferred stock to common stock at closing of initial public offering | 0 | 66,904 |
Settlement of fair value of redeemable convertible preferred stock liability | 0 | 5,837 |
Accretion of redeemable convertible preferred stock | 0 | 558 |
Deferred offering costs in accounts payable and accrued liabilities | 0 | 860 |
Acquisition of equipment in trade-in | 185 | 0 |
Purchase of property and equipment in accounts payable and accrued liabilities | 6 | 0 |
Reclassification of preferred stock warrant liability to equity | $ 0 | $ 1,005 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Protagonist Therapeutics, Inc. (the “Company”) was incorporated in the state of Delaware on August 22, 2006 and is headquartered in Newark, California. The Company is a clinical-stage biopharmaceutical company with a proprietary technology platform which is utilized to discover and develop novel peptide-based drugs to address significant unmet medical needs. Protagonist Pty Limited (“Protagonist Australia”) is a wholly-owned subsidiary of the Company and is located in Brisbane, Australia. Protagonist Australia was incorporated in Australia in September 2001. The Company became the parent of Protagonist Australia pursuant to a transaction in which all of the issued and outstanding capital stock of Protagonist Australia was exchanged for shares of the Company’s common stock and Series A preferred stock. The Company manages its operations as a single operating segment. Liquidity The Company has incurred net losses from operations since inception and has an accumulated deficit of $98.5 million as of September 30, 2017 . The Company’s ultimate success depends on the outcome of its research and development activities. The Company expects to incur additional losses in the future and it anticipates the need to raise additional capital to fully implement its business plan. In September 2017, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”) which permits the offering, issuance, and sale by the Company of up to a maximum aggregate offering price of $200.0 million of its common stock. Up to a maximum of $50.0 million of the maximum aggregate offering price of $200.0 million may be issued and sold pursuant to an At-The-Market financing facility under a sales agreement with Cantor Fitzgerald & Co. As of September 30, 2017, the Company had not sold any securities pursuant to the shelf registration statement. The Company will also continue to seek funds through equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing, but there is no assurance that such financing will be available at terms acceptable to the Company, if at all. Initial Public Offering On August 10, 2016, the Company’s registration statement on Form S-1 (File Nos. 333-212476 and 333-213071) related to its initial public offering (“IPO”) of common stock became effective. The IPO closed on August 16, 2016, at which time the Company issued 7,500,000 shares of its common stock at a price of $12.00 per share. In addition, upon closing the IPO, all outstanding shares of the redeemable convertible preferred stock converted into 8,577,571 shares of common stock. There were no shares of redeemable convertible preferred stock outstanding at September 30, 2017 or December 31, 2016 . In September 2016, the Company issued an additional 252,972 shares of its common stock at a price of $12.00 per share following the underwriters’ exercise of their option to purchase additional shares. The Company received an aggregate of $83.6 million in cash, net of underwriting discounts and commissions, after deducting offering costs paid by the Company. Reverse Stock Split In July 2016, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of the Company’s issued and outstanding common stock at a 1-for-14.5 ratio, which was effected on August 1, 2016. The par value and authorized shares of common stock and convertible preferred stock were not adjusted as a result of the reverse stock split. All issued and outstanding common stock, options to purchase common stock and per share amounts contained in the condensed consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s consolidated financial information. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or for any other future year. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 7, 2017. Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates related to revenue recognition, accruals for research and development activities, stock-based compensation, and income taxes. Estimates related to revenue recognition include actual costs incurred versus total estimated budgeted cost of the Company's deliverables, actual costs incurred versus total estimated budgeted cost of variable consideration, and application of constraint in the determination of transaction price under its license and collaboration agreement with Janssen Biotech, Inc. (the "Janssen License and Collaboration Agreement"). Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ significantly from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and available-for-sale securities. Substantially all of the Company’s cash is held by two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and to meet liquidity requirements. The Company’s cash equivalents and available-for-sale securities are managed by external managers within the guidelines of the Company’s investment policy. The Company’s investment policy addresses the level of credit exposure by limiting concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage its credit risk exposure, the Company maintains its portfolio of cash equivalents and available-for-sale securities in fixed income securities denominated and payable in U.S. dollars. Permissible investments of fixed income securities include obligations of the U.S. government and its agencies, money market instruments including commercial paper and negotiable certificates of deposit, and highly rated corporate debt obligations and money market funds. The Company has not experienced any material credit losses on its investments. Cash Equivalents Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash consists of cash balances primarily held as security in connection with the Company’s corporate credit card and a letter of credit related to the Company's facility lease entered into in March 2017. Cash as Reported in Consolidated Statements of Cash Flows Cash as reported in the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets. Cash as reported in the unaudited condensed consolidated statements of cash flows consists of (in thousands): September 30, 2017 2016 Cash and cash equivalents $ 50,395 $ 96,024 Restricted cash - current 10 10 Restricted cash - noncurrent 450 — Cash balance in condensed consolidated statements of cash flows $ 50,855 $ 96,034 Available-for-Sale Securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term marketable securities have maturities greater than three months but no longer than 365 days as of the balance sheet date. Long-term marketable securities have maturities of 365 days or longer as of the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income. Fair Value of Financial Instruments Fair value accounting is applied to all financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis (at least annually). The carrying amount of the Company’s financial instruments, including cash equivalents, receivable from collaboration partner, accounts payable and accrued expenses and other payables approximates fair value due to their short-term maturities. See Note 4, Fair Value Measurements, regarding the fair value of the Company’s other financial assets and liabilities. Revenue Recognition Effective July 1, 2017, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606") using the full retrospective transition method. The Company did not have any effective contracts within the scope of this guidance prior to July 1, 2017. Accordingly, the Company did not elect to use any of the practical expedients permitted related to adoption, and the adoption of ASC 606 had no impact on the Company's financial position, results of operations or liquidity. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company entered into a license and collaboration agreement that became effective upon the resolution of regulatory requirements during the third quarter of 2017 which is within the scope of ASC 606, under which it has licensed certain rights to its PTG-200 product candidate to a third party and may enter into other such arrangements in the future. The terms of the arrangement include payment to the Company of one or more of the following: non-refundable, up-front license fees, development and regulatory and commercial milestone payments, and royalties on net sales of licensed products. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. To date, the Company has not recognized any milestone payments resulting from its collaboration arrangement. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangement. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Research and Development Costs Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and preclinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced, and includes these costs in accrued expenses and other payables in the condensed consolidated balance sheets and within research and development expense in the condensed consolidated statements of operations. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities at each balance sheet date. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, and the rate of patient enrollment may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. Research and Development Tax Incentive The Company is eligible under the AusIndustry research and development tax incentive program to obtain a cash amount from the Australian Taxation Office. The tax incentive is available to the Company on the basis of specific criteria with which the Company must comply. Specifically, the Company must have annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities. The research and development tax incentive is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible. The tax incentive is denominated in Australian dollars and, therefore, the related receivable is remeasured into U.S. dollars as of each reporting date. Under certain conditions, research and development activities conducted outside Australia (“overseas finding”) also qualify for the research and development tax incentive. Funds received for overseas finding are at a risk of clawback until substantiation that less than 50% of research and development expenditures for a project will be incurred overseas. A deferred tax incentive is recorded upon the cash receipt of the overseas finding funds and a reduction of research and development expense is not recognized until the Company can substantiate that more than 50% of the total project expenditure will occur in Australia. When there is reasonable assurance that the grant will be received with remote risk of clawback, the relevant expenditure has been incurred, and the consideration can be reliably measured, the Company records the research and development incentive, including the overseas finding funds, as research and development tax incentive receivable and a reduction of research and development expenses to reflect that the funds are owed to the Company for the period the eligible costs are incurred. Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. The net loss attributable to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the redeemable convertible preferred stock, if applicable. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for all periods presented since the effect of potentially dilutive securities are anti-dilutive given the net loss of the Company. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and creates a new ASC Topic 606, Revenue from Contracts with Customers . Customers. Subsequent to May 2014, the FASB issued additional guidance that delayed the effective date and clarified various aspects of the new guidance, including principal versus agent considerations, identifying performance obligations and licensing, and also included other improvements and practical expedients. The Company adopted this new guidance effective July 1, 2017 using the full retrospective transition method. The Company did not have any effective contracts within the scope of this guidance prior to July 1, 2017. Accordingly, the Company did not elect to use any of the practical expedients permitted under the transition guidance, and the adoption had no impact on the Company's previously reported financial position, results of operations or liquidity. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , which is intended to simplify and improve how deferred income taxes are classified on the balance sheet. This guidance eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet and now requires entities to classify all deferred tax assets and liabilities as noncurrent. The guidance is effective for annual periods beginning after December 15, 2016 and for interim periods within those annual periods, and early adoption is permitted. The Company adopted this guidance effective January 1, 2017. The adoption of this guidance did not have a material impact on the Company's financial position, results of operations or liquidity. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of accounting for employee share-based payment transactions, including income tax consequences, the determination of forfeiture rates, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016, and early adoption is permitted. The Company adopted this guidance effective January 1, 2017 and has elected to recognize forfeitures of share-based payment awards as they occur on a prospective basis. The impact of the adoption of ASU 2016-09 was not material to the Company’s condensed consolidated financial statements. The adoption of this guidance did not have a material impact on the income tax effects of share-based payment awards as the resulting change in the Company's deferred income tax assets is fully offset by a corresponding deferred income tax asset valuation allowance. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires the presentation of changes in restricted cash or restricted cash equivalents on the statement of cash flows. This guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company early adopted this guidance effective March 31, 2017, and, accordingly, amounts generally described as restricted cash are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts of cash reflected on the accompanying consolidated statements of cash flows. The Company has adopted ASU 2016-18 retrospectively and has revised the prior period cash flows from investing activities, beginning cash balance, and ending cash balance to reflect the change in presentation of restricted cash. Other than the change in presentation in the accompanying consolidated statements of cash flows, the adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. Recently Issued Accounting Pronouncements Not Adopted as of September 30, 2017 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, (with the exception of short-term leases) at the commencement date, lessees will be required to recognize a lease liability and a right-of-use asset. Lessor accounting is largely unchanged, while lessees will no longer be provided with a source of off-balance sheet financing. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Lessees (for capital and operating leases) are required to apply the modified retrospective transition method for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective method does not require any transition accounting for leases that did not exist before the earliest comparative period presented. While the Company continues to evaluate the impact of this guidance on its consolidated financial statements and disclosures, it expects that its non-cancellable operating lease commitments will be subject to the new guidance and recognized as right-of-use assets and operating lease liabilities on the Company’s consolidated balance sheets, and that the adoption of this new guidance will not have a material impact on its results of operations or liquidity. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. The new standard replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2019 and early adoption is permitted for fiscal years and interim periods within those years beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the classification of certain cash receipts and cash payments in the statements of cash flow to eliminate the diversity in practice related to eight specific cash flow issues. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures. |
Janssen Collaboration Agreement
Janssen Collaboration Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Text Block [Abstract] | |
Janssen Collaboration Agreement | Janssen Collaboration Agreement Agreement Terms On May 26, 2017, the Company and Janssen Biotech, Inc., ("Janssen"), one of the Janssen Pharmaceutical Companies of Johnson & Johnson, entered into an exclusive license and collaboration agreement for the development, manufacture and commercialization of PTG-200 worldwide for the treatment of Crohn's disease ("CD") and ulcerative colitis ("UC"). Janssen is a related party to the Company as Johnson & Johnson Innovation - JJDC, Inc., a significant shareholder of the Company, and Janssen are both subsidiaries of Johnson and Johnson. PTG-200 is the Company’s oral Interleukin 23 receptor ("IL-23R") antagonist drug candidate currently in development. The Janssen License and Collaboration Agreement became effective on July 13, 2017. Upon the effectiveness of the agreement, the Company became eligible for and received a non-refundable, upfront cash payment of $50.0 million from Janssen. Under the Janssen License and Collaboration Agreement, the Company granted to Janssen an exclusive worldwide license to develop, manufacture and commercialize PTG-200 and related IL-23R compounds for all indications, including CD and UC. The Company is responsible, at its own expense, for the conduct of the Phase 1 clinical trial for PTG-200, and Janssen will be responsible for the conduct of a potential Phase 2 clinical trial for PTG-200 in CD, including filing the Phase 2 IND. All such clinical trials will be conducted in accordance with a mutually agreed upon clinical development plan and budget. Development costs for the Phase 2 clinical trial will be shared between the parties on an 80% / 20% basis, with Janssen assuming the larger share. Should Janssen elect to retain its license following completion of the Phase 2 clinical trial, it will be responsible, at its own expense, for the manufacture, continued development of, seeking regulatory approval for, and commercialization of PTG-200 worldwide. The parties’ development activities under the Janssen License and Collaboration Agreement through the Phase 2 clinical trial will be overseen by a joint governance structure which will have equal representation by both parties unless both parties mutually agree to disband such structure or the Company has provided written notice to Janssen of its intention to disband and no longer participate in such structure. The Company is eligible to receive a $25.0 million payment upon filing of the Phase 2 IND. Following the conclusion of the planned Phase 2A portion of the Phase 2 clinical trial, if Janssen elects to maintain its license rights and continue the development of PTG-200 in the Phase 2B portion of such clinical trial (the “First Opt-in Election”), the Company would be eligible to receive a $125.0 million payment. Following the conclusion of the planned Phase 2B portion of the Phase 2 clinical trial, if Janssen elects again to maintain its license rights (the “Second Opt-in Election”), the Company would be eligible to receive a $200 million payment. In addition to the opt-in fees, the Company would be eligible to receive potential development, regulatory and sales milestone payments of up to an aggregate of $590.0 million , and tiered royalties paid as a percentage of Janssen’s worldwide net sales at rates ranging from ten to the mid-teens, with certain customary reductions under certain circumstances. If Janssen does not make either the First Opt-in Election or the Second Opt-in Election, the Janssen License and Collaboration Agreement will terminate. If Janssen does not make the Second Opt-in Election, or if at any time after the Second Opt-in Election, Janssen terminates the Janssen License and Collaboration Agreement, the Company would be obligated to pay Janssen a low single-digit royalty on worldwide net sales of PTG-200. The Company would also have an option to provide up to 30% of the required U.S. details for PTG-200 to prescribers, using its own sales force personnel, upon commercial launch in the United States. If such right is exercised by the Company, the Company’s detailing costs would be reimbursed by Janssen at a mutually agreed cost per primary detailing equivalent. The Janssen License and Collaboration Agreement contains customary representations, warranties and covenants by the Company and Janssen and includes an obligation by the Company not to develop or commercialize other compounds which also target IL-23R outside of the Janssen License and Collaboration Agreement until completion of the Phase 2B portion of the Phase 2 clinical trial. Each of the Company and Janssen is required to indemnify the other party against all losses and expenses related to breaches of its representations, warranties and covenants under the Janssen License and Collaboration Agreement. The Janssen License and Collaboration Agreement remains in effect until the royalty obligations cease following patent and regulatory expiry, unless terminated earlier. Either the Company or Janssen may terminate the Janssen License and Collaboration Agreement for uncured material breach. Janssen retains the right to terminate the Janssen License and Collaboration Agreement for convenience and without cause on written notice of a certain period to the Company. Upon a termination of the Janssen License and Collaboration Agreement, all rights revert back to the Company, and in certain circumstances, if such termination occurs during ongoing clinical trials, Janssen would, if requested, provide certain financial and operational support to the Company for the completion of such trials. Revenue Recognition The Company identified the following material promises under the Janssen License and Collaboration Agreement: (1) the license related to PTG-200, (2) the performance of development services, including regulatory support, during Phase 1 clinical trial for PTG-200 through the filing of the IND by Janssen, and (3) compound supply services for Phase 1 and Phase 2 activities. The Company considered that the license has standalone functionality and is capable of being distinct. However, the Company determined that the license is not distinct from the development and compound supply services within the context of the agreement because the development and compound supply services significantly increase the utility of the intellectual property. Specifically, the Company’s development, manufacturing and commercialization license can only provide benefit to Janssen in combination with the Company’s development services in the Phase 1 study. The intellectual property (“IP”) related to the peptide technology platform, which is proprietary to the Company, is the foundation for the development activities related to the treatment for CD. The compound supply services are a necessary and integral part of the development services as they could only be conducted utilizing the outcomes of these services. Given the development services under the Janssen Collaboration Agreement are expected to involve significant further development of the initial IP, the Company has concluded that the development and compound supply services are not distinct from the license, and thus the license, development services and compound supply services are combined into a single performance obligation. The nature of the combined performance obligation is to provide development and compound supply services to Janssen under the arrangement. The Company also evaluated whether the fees related to the First Opt-in Election and Second Opt-in Election are options with material rights. These two options include additional sublicense rights and patent rights transferred to Janssen upon exercising both of these options. The Company concluded that Janssen’s opt in rights are not options with material rights because the $50.0 million upfront payment to the Company was not negotiated to provide incremental discount for the future opt in payments at the end of Phase 2A and Phase 2B. The option to “opt in” provides Janssen with a license for IP that has been improved from the license initially granted for a term in the case of the opt in after completion Phase 2A and then a perpetual license in the case of opt in after completion of Phase 2B. Therefore, the First Opt-in Election and Second Opt-in Election options are not considered to be material rights. The option fees will be recognized as revenue when, and if, Janssen exercises its options because the Company has no further performance obligations at that point. For revenue recognition purposes, the Company determined that the duration of the contract begins on the effective date of July 13, 2017 and ends upon completion of Phase 2A activities. The contract duration is defined as the period in which parties to the contract have present enforceable rights and obligations. The Company analyzed the impact of Janssen terminating the agreement prior to the completion of Phase 2A and determined that there were significant economic penalties to Janssen for doing so. The Company believes that if Janssen terminates the agreement upon completion of Phase 2A, the forfeiture of the remaining license rights and payment of 50% of the remaining Phase 2 costs is not a significant economic penalty when compared to paying $125 million as an opt in license fee to continue the use of the License. Thus, the duration of the contract is limited to the end of Phase 2A. The Company determined that the transaction price of the Janssen License and Collaboration Agreement was $54.2 million as of September 30, 2017. In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract. The Company determined that the $50.0 million upfront payment, the $25.0 million payment payable upon filing of the Phase 2 IND, which is fully constrained as of September 30, 2017, and $4.2 million of estimated variable consideration for cost-sharing payments from Janssen for agreed upon services related to Phase 2 activities constituted consideration to be included in the transaction price, which is to be allocated to the combined performance obligation. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. As part of the evaluation for determining that the $25.0 million payment upon filing of Phase 2 IND is fully constrained as of September 30, 2017, the Company considered several factors, including the stage of development of PTG-200 and that achievement of the milestone is outside of the Company's control, and concluded that the filing of the Phase 2 IND is not probable at this time. If and when the filing of the Phase 2 IND becomes probable, the $25.0 million payment will be constrained by contra revenue amounts for payments that the Company expects to make for 20% of the cost of Phase 2 activities to be performed by Janssen. The additional potential development, regulatory and sales milestone payments of up to an aggregate of $590.0 million after the completion of Phase 2A activities that the Company is eligible to receive are outside the contract term and as such have been excluded from the transaction price. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Janssen and therefore have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. Variable consideration for cost-sharing payments related to agreed upon services for Phase 2 activities that the Company performs within the duration of the contract are included in the transaction price at an amount equal to 80% of the estimated budgeted costs for these activities, including primarily internal full-time equivalent effort and third party contract costs. The Company is responsible for 20% of the development costs for the Phase 2 clinical trial. Accordingly, a significant portion of this work is expected to be performed by Janssen. Because the Phase 2 clinical trial activity is related to the license, it is not capable of being distinct. This is because both the Company and Janssen cannot benefit from these activities absent the Phase 1 activities. As the Phase 2 activities for which the Company will share 20% of the cost activities are not capable of being distinct and are not separately identifiable within the context of the contract, they are not a distinct service that Janssen transfers to the Company. Therefore, the consideration payable to Janssen is accounted for as a reduction in the transaction price. The Company and Janssen make quarterly cost-sharing payments to one another in amounts necessary to ensure that each party bears its contractual share of the overall shared costs incurred. The Company accounts for cost-sharing payments from Janssen as increases in license and collaboration revenue in its consolidated statements of operations, while cost-sharing payments to Janssen are accounted for as reductions in license and collaboration revenue, or contra-revenue. Costs incurred by the Company related to agreed upon services for Phase 2 activities under the Janssen License and Collaboration Agreement are recorded as research and development expenses in its consolidated statements of operations. In summary, the license, the development activities for Phase 1 activities and the agreed upon services for Phase 2 activities are combined as one performance obligation that will be performed over the duration of the contract, which is from the effective date of the Janssen License and Collaboration Agreement through to the completion of Phase 2A activities. Since the Company has determined that the combined performance obligation is satisfied over time, ASC 606 requires the Company to select a single revenue recognition method for the performance obligation that faithfully depicts the Company's performance in transferring control of the services. The guidance allows entities to use two methods to measure its progress toward complete satisfaction of a performance obligation: 1. Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units of produced or units delivered); and 2. Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company concluded that it will utilize a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress because other measures do not reflect how the Company transfers its performance obligation to Janssen. In applying the cost-based input methods of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the combined performance obligation. These costs consist primarily of internal full-time equivalent effort and third-party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations, which the Company believes will be fulfilled within the next 12 months. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company's performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company's performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods. For the three and nine months ended September 30, 2017, the Company recognized $8.8 million of license and collaboration revenue. This amount included $8.4 million of the transaction price for the Janssen License and Collaboration Agreement recognized based on proportional performance, and $0.4 million for other services related to Phase 2 activities performed by the Company on behalf of Janssen that are not included in the performance obligations identified under the Janssen License and Collaboration Agreement. The following table presents changes in the Company’s contract assets and liabilities during the three and nine months ended September 30, 2017 (in thousands): Three and nine months ended September 30, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner - related party $ — $ 520 $ — $ 520 Contract liabilities: Deferred revenue - related party $ — $ 50,132 $ (8,393 ) $ 41,739 Deferred revenue related to the Janssen License and Collaboration Agreement of $41.7 million as of September 30, 2017, which was comprised of the $50.0 million upfront payment and $0.1 million of cost sharing payments from Janssen for agreed upon services for Phase 2 activities, less $8.4 million of license and collaboration revenue recognized from the effective date of the contract, will be recognized as the combined performance obligation is satisfied. The Company also recorded a $0.5 million receivable from collaboration partner as of September 30, 2017 for cost sharing amounts payable from Janssen. During the three months and nine months ended September 30, 2017, the Company did not recognize any revenue from amounts included in the contract asset and the contract liability balances at the beginning of the period or from performance obligations satisfied in previous periods. None of the costs to obtain or fulfill the contract were capitalized. Research Collaboration and License Agreement In October 2013, the Company’s former collaboration partner decided to abandon a collaboration program with the Company and, pursuant to the terms of the agreement between the Company and the former collaboration partner, the Company elected to assume the responsibility for the development and commercialization of the product candidate. Upon the former collaboration partner’s abandonment, it assigned to the Company certain intellectual property arising from the collaboration and also granted the Company an exclusive license to certain background intellectual property rights of the former collaboration partner that relate to the products acquired by the Company. The nomination of PTG-300 as a development candidate triggered a $250,000 payment from the Company to the former collaboration partner, which the Company recorded as a research and development expense during the three months ended March 31, 2016. The initiation of a Phase 1 clinical study for PTG-300 during the second quarter of 2017 triggered an additional $250,000 payment obligation from the Company to the former collaboration partner, which the Company recorded as a research and development expense during the three months ended June 30, 2017. The Company has the right, but not the obligation, to further develop and commercialize the product and, if the Company successfully develops and commercializes PTG-300 without a partner, the Company will pay the former collaboration partner up to an additional aggregate of $28.5 million for the achievement of certain development and regulatory milestone events and up to an additional aggregate of $100.0 million for the achievement of certain sales milestone events. In addition, the Company will pay the former collaboration partner a low single digit royalty on worldwide net sales of the product until the later of 10 years from the first commercial sale of the product or the expiration of the last patent covering the product. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2— Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The following table presents the fair value of the Company’s financial assets and liabilities determined using the inputs defined above (in thousands). September 30, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 47,638 $ — $ — $ 47,638 Corporate bonds — 7,495 — 7,495 Government bonds — 47,013 — 47,013 Total financial assets $ 47,638 $ 54,508 $ — $ 102,146 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 11,270 $ — $ — $ 11,270 Corporate bonds — 21,841 — 21,841 Commercial paper — 10,769 — 10,769 Government bonds — 41,289 — 41,289 Total financial assets $ 11,270 $ 73,899 $ — $ 85,169 The Company's corporate bonds, commercial paper and government bonds are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Cash Equivalents and Available-for-sale Securities Cash equivalents and available-for-sale securities consisted of the following (in thousands): September 30, 2017 Amortized Cost Gross Unrealized Gains Losses Fair Value Money market funds $ 47,638 $ — $ — $ 47,638 Corporate bonds 7,502 — (7 ) 7,495 Government bonds 47,056 — (44 ) 47,012 Total cash equivalents and available-for-sale securities $ 102,196 $ — $ (51 ) $ 102,145 Classified as: Cash equivalents $ 47,638 Available-for-sale securities - current 43,191 Available-for-sale securities - noncurrent 11,316 Total cash equivalents and available-for-sale securities $ 102,145 December 31, 2016 Amortized Cost Gross Unrealized Gains Losses Fair Value Money market funds $ 11,270 $ — $ — $ 11,270 Corporate bonds 21,886 — (45 ) 21,841 Commercial paper 10,769 — — 10,769 Government bonds 41,316 2 (29 ) 41,289 Total cash equivalents and available-for-sale securities $ 85,241 $ 2 $ (74 ) $ 85,169 Classified as: Cash equivalents $ 18,504 Available-for-sale securities - current 56,515 Available-for-sale securities - noncurrent 10,150 Total cash equivalents and available-for-sale securities $ 85,169 All available-for-sale securities - current held as of September 30, 2017 and December 31, 2016 had contractual maturities of less than one year. All available-for-sale securities - noncurrent held as of September 30, 2017 and December 31, 2016 had contractual maturities of at least one year but less than two years. There have been no material realized gains or losses on available-for-sale securities for the periods presented. Accrued Expenses and Other Payables Accrued expenses and other payables consisted of the following (in thousands): September 30, 2017 December 31, 2016 Accrued clinical and research related expenses $ 5,864 $ 3,617 Accrued employee related expenses 1,611 1,420 Accrued professional service fees 709 115 Other 57 120 Total accrued expenses and other payables $ 8,241 $ 5,272 |
Research Collaboration and Lice
Research Collaboration and License Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Research Collaboration and License Agreement | Janssen Collaboration Agreement Agreement Terms On May 26, 2017, the Company and Janssen Biotech, Inc., ("Janssen"), one of the Janssen Pharmaceutical Companies of Johnson & Johnson, entered into an exclusive license and collaboration agreement for the development, manufacture and commercialization of PTG-200 worldwide for the treatment of Crohn's disease ("CD") and ulcerative colitis ("UC"). Janssen is a related party to the Company as Johnson & Johnson Innovation - JJDC, Inc., a significant shareholder of the Company, and Janssen are both subsidiaries of Johnson and Johnson. PTG-200 is the Company’s oral Interleukin 23 receptor ("IL-23R") antagonist drug candidate currently in development. The Janssen License and Collaboration Agreement became effective on July 13, 2017. Upon the effectiveness of the agreement, the Company became eligible for and received a non-refundable, upfront cash payment of $50.0 million from Janssen. Under the Janssen License and Collaboration Agreement, the Company granted to Janssen an exclusive worldwide license to develop, manufacture and commercialize PTG-200 and related IL-23R compounds for all indications, including CD and UC. The Company is responsible, at its own expense, for the conduct of the Phase 1 clinical trial for PTG-200, and Janssen will be responsible for the conduct of a potential Phase 2 clinical trial for PTG-200 in CD, including filing the Phase 2 IND. All such clinical trials will be conducted in accordance with a mutually agreed upon clinical development plan and budget. Development costs for the Phase 2 clinical trial will be shared between the parties on an 80% / 20% basis, with Janssen assuming the larger share. Should Janssen elect to retain its license following completion of the Phase 2 clinical trial, it will be responsible, at its own expense, for the manufacture, continued development of, seeking regulatory approval for, and commercialization of PTG-200 worldwide. The parties’ development activities under the Janssen License and Collaboration Agreement through the Phase 2 clinical trial will be overseen by a joint governance structure which will have equal representation by both parties unless both parties mutually agree to disband such structure or the Company has provided written notice to Janssen of its intention to disband and no longer participate in such structure. The Company is eligible to receive a $25.0 million payment upon filing of the Phase 2 IND. Following the conclusion of the planned Phase 2A portion of the Phase 2 clinical trial, if Janssen elects to maintain its license rights and continue the development of PTG-200 in the Phase 2B portion of such clinical trial (the “First Opt-in Election”), the Company would be eligible to receive a $125.0 million payment. Following the conclusion of the planned Phase 2B portion of the Phase 2 clinical trial, if Janssen elects again to maintain its license rights (the “Second Opt-in Election”), the Company would be eligible to receive a $200 million payment. In addition to the opt-in fees, the Company would be eligible to receive potential development, regulatory and sales milestone payments of up to an aggregate of $590.0 million , and tiered royalties paid as a percentage of Janssen’s worldwide net sales at rates ranging from ten to the mid-teens, with certain customary reductions under certain circumstances. If Janssen does not make either the First Opt-in Election or the Second Opt-in Election, the Janssen License and Collaboration Agreement will terminate. If Janssen does not make the Second Opt-in Election, or if at any time after the Second Opt-in Election, Janssen terminates the Janssen License and Collaboration Agreement, the Company would be obligated to pay Janssen a low single-digit royalty on worldwide net sales of PTG-200. The Company would also have an option to provide up to 30% of the required U.S. details for PTG-200 to prescribers, using its own sales force personnel, upon commercial launch in the United States. If such right is exercised by the Company, the Company’s detailing costs would be reimbursed by Janssen at a mutually agreed cost per primary detailing equivalent. The Janssen License and Collaboration Agreement contains customary representations, warranties and covenants by the Company and Janssen and includes an obligation by the Company not to develop or commercialize other compounds which also target IL-23R outside of the Janssen License and Collaboration Agreement until completion of the Phase 2B portion of the Phase 2 clinical trial. Each of the Company and Janssen is required to indemnify the other party against all losses and expenses related to breaches of its representations, warranties and covenants under the Janssen License and Collaboration Agreement. The Janssen License and Collaboration Agreement remains in effect until the royalty obligations cease following patent and regulatory expiry, unless terminated earlier. Either the Company or Janssen may terminate the Janssen License and Collaboration Agreement for uncured material breach. Janssen retains the right to terminate the Janssen License and Collaboration Agreement for convenience and without cause on written notice of a certain period to the Company. Upon a termination of the Janssen License and Collaboration Agreement, all rights revert back to the Company, and in certain circumstances, if such termination occurs during ongoing clinical trials, Janssen would, if requested, provide certain financial and operational support to the Company for the completion of such trials. Revenue Recognition The Company identified the following material promises under the Janssen License and Collaboration Agreement: (1) the license related to PTG-200, (2) the performance of development services, including regulatory support, during Phase 1 clinical trial for PTG-200 through the filing of the IND by Janssen, and (3) compound supply services for Phase 1 and Phase 2 activities. The Company considered that the license has standalone functionality and is capable of being distinct. However, the Company determined that the license is not distinct from the development and compound supply services within the context of the agreement because the development and compound supply services significantly increase the utility of the intellectual property. Specifically, the Company’s development, manufacturing and commercialization license can only provide benefit to Janssen in combination with the Company’s development services in the Phase 1 study. The intellectual property (“IP”) related to the peptide technology platform, which is proprietary to the Company, is the foundation for the development activities related to the treatment for CD. The compound supply services are a necessary and integral part of the development services as they could only be conducted utilizing the outcomes of these services. Given the development services under the Janssen Collaboration Agreement are expected to involve significant further development of the initial IP, the Company has concluded that the development and compound supply services are not distinct from the license, and thus the license, development services and compound supply services are combined into a single performance obligation. The nature of the combined performance obligation is to provide development and compound supply services to Janssen under the arrangement. The Company also evaluated whether the fees related to the First Opt-in Election and Second Opt-in Election are options with material rights. These two options include additional sublicense rights and patent rights transferred to Janssen upon exercising both of these options. The Company concluded that Janssen’s opt in rights are not options with material rights because the $50.0 million upfront payment to the Company was not negotiated to provide incremental discount for the future opt in payments at the end of Phase 2A and Phase 2B. The option to “opt in” provides Janssen with a license for IP that has been improved from the license initially granted for a term in the case of the opt in after completion Phase 2A and then a perpetual license in the case of opt in after completion of Phase 2B. Therefore, the First Opt-in Election and Second Opt-in Election options are not considered to be material rights. The option fees will be recognized as revenue when, and if, Janssen exercises its options because the Company has no further performance obligations at that point. For revenue recognition purposes, the Company determined that the duration of the contract begins on the effective date of July 13, 2017 and ends upon completion of Phase 2A activities. The contract duration is defined as the period in which parties to the contract have present enforceable rights and obligations. The Company analyzed the impact of Janssen terminating the agreement prior to the completion of Phase 2A and determined that there were significant economic penalties to Janssen for doing so. The Company believes that if Janssen terminates the agreement upon completion of Phase 2A, the forfeiture of the remaining license rights and payment of 50% of the remaining Phase 2 costs is not a significant economic penalty when compared to paying $125 million as an opt in license fee to continue the use of the License. Thus, the duration of the contract is limited to the end of Phase 2A. The Company determined that the transaction price of the Janssen License and Collaboration Agreement was $54.2 million as of September 30, 2017. In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract. The Company determined that the $50.0 million upfront payment, the $25.0 million payment payable upon filing of the Phase 2 IND, which is fully constrained as of September 30, 2017, and $4.2 million of estimated variable consideration for cost-sharing payments from Janssen for agreed upon services related to Phase 2 activities constituted consideration to be included in the transaction price, which is to be allocated to the combined performance obligation. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. As part of the evaluation for determining that the $25.0 million payment upon filing of Phase 2 IND is fully constrained as of September 30, 2017, the Company considered several factors, including the stage of development of PTG-200 and that achievement of the milestone is outside of the Company's control, and concluded that the filing of the Phase 2 IND is not probable at this time. If and when the filing of the Phase 2 IND becomes probable, the $25.0 million payment will be constrained by contra revenue amounts for payments that the Company expects to make for 20% of the cost of Phase 2 activities to be performed by Janssen. The additional potential development, regulatory and sales milestone payments of up to an aggregate of $590.0 million after the completion of Phase 2A activities that the Company is eligible to receive are outside the contract term and as such have been excluded from the transaction price. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Janssen and therefore have also been excluded from the transaction price. At the end of each reporting period, the Company will update its assessment of whether an estimate of variable consideration is constrained and update the estimated transaction price accordingly. Variable consideration for cost-sharing payments related to agreed upon services for Phase 2 activities that the Company performs within the duration of the contract are included in the transaction price at an amount equal to 80% of the estimated budgeted costs for these activities, including primarily internal full-time equivalent effort and third party contract costs. The Company is responsible for 20% of the development costs for the Phase 2 clinical trial. Accordingly, a significant portion of this work is expected to be performed by Janssen. Because the Phase 2 clinical trial activity is related to the license, it is not capable of being distinct. This is because both the Company and Janssen cannot benefit from these activities absent the Phase 1 activities. As the Phase 2 activities for which the Company will share 20% of the cost activities are not capable of being distinct and are not separately identifiable within the context of the contract, they are not a distinct service that Janssen transfers to the Company. Therefore, the consideration payable to Janssen is accounted for as a reduction in the transaction price. The Company and Janssen make quarterly cost-sharing payments to one another in amounts necessary to ensure that each party bears its contractual share of the overall shared costs incurred. The Company accounts for cost-sharing payments from Janssen as increases in license and collaboration revenue in its consolidated statements of operations, while cost-sharing payments to Janssen are accounted for as reductions in license and collaboration revenue, or contra-revenue. Costs incurred by the Company related to agreed upon services for Phase 2 activities under the Janssen License and Collaboration Agreement are recorded as research and development expenses in its consolidated statements of operations. In summary, the license, the development activities for Phase 1 activities and the agreed upon services for Phase 2 activities are combined as one performance obligation that will be performed over the duration of the contract, which is from the effective date of the Janssen License and Collaboration Agreement through to the completion of Phase 2A activities. Since the Company has determined that the combined performance obligation is satisfied over time, ASC 606 requires the Company to select a single revenue recognition method for the performance obligation that faithfully depicts the Company's performance in transferring control of the services. The guidance allows entities to use two methods to measure its progress toward complete satisfaction of a performance obligation: 1. Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units of produced or units delivered); and 2. Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company concluded that it will utilize a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress because other measures do not reflect how the Company transfers its performance obligation to Janssen. In applying the cost-based input methods of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the combined performance obligation. These costs consist primarily of internal full-time equivalent effort and third-party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligations, which the Company believes will be fulfilled within the next 12 months. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company's performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company's performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods. For the three and nine months ended September 30, 2017, the Company recognized $8.8 million of license and collaboration revenue. This amount included $8.4 million of the transaction price for the Janssen License and Collaboration Agreement recognized based on proportional performance, and $0.4 million for other services related to Phase 2 activities performed by the Company on behalf of Janssen that are not included in the performance obligations identified under the Janssen License and Collaboration Agreement. The following table presents changes in the Company’s contract assets and liabilities during the three and nine months ended September 30, 2017 (in thousands): Three and nine months ended September 30, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner - related party $ — $ 520 $ — $ 520 Contract liabilities: Deferred revenue - related party $ — $ 50,132 $ (8,393 ) $ 41,739 Deferred revenue related to the Janssen License and Collaboration Agreement of $41.7 million as of September 30, 2017, which was comprised of the $50.0 million upfront payment and $0.1 million of cost sharing payments from Janssen for agreed upon services for Phase 2 activities, less $8.4 million of license and collaboration revenue recognized from the effective date of the contract, will be recognized as the combined performance obligation is satisfied. The Company also recorded a $0.5 million receivable from collaboration partner as of September 30, 2017 for cost sharing amounts payable from Janssen. During the three months and nine months ended September 30, 2017, the Company did not recognize any revenue from amounts included in the contract asset and the contract liability balances at the beginning of the period or from performance obligations satisfied in previous periods. None of the costs to obtain or fulfill the contract were capitalized. Research Collaboration and License Agreement In October 2013, the Company’s former collaboration partner decided to abandon a collaboration program with the Company and, pursuant to the terms of the agreement between the Company and the former collaboration partner, the Company elected to assume the responsibility for the development and commercialization of the product candidate. Upon the former collaboration partner’s abandonment, it assigned to the Company certain intellectual property arising from the collaboration and also granted the Company an exclusive license to certain background intellectual property rights of the former collaboration partner that relate to the products acquired by the Company. The nomination of PTG-300 as a development candidate triggered a $250,000 payment from the Company to the former collaboration partner, which the Company recorded as a research and development expense during the three months ended March 31, 2016. The initiation of a Phase 1 clinical study for PTG-300 during the second quarter of 2017 triggered an additional $250,000 payment obligation from the Company to the former collaboration partner, which the Company recorded as a research and development expense during the three months ended June 30, 2017. The Company has the right, but not the obligation, to further develop and commercialize the product and, if the Company successfully develops and commercializes PTG-300 without a partner, the Company will pay the former collaboration partner up to an additional aggregate of $28.5 million for the achievement of certain development and regulatory milestone events and up to an additional aggregate of $100.0 million for the achievement of certain sales milestone events. In addition, the Company will pay the former collaboration partner a low single digit royalty on worldwide net sales of the product until the later of 10 years from the first commercial sale of the product or the expiration of the last patent covering the product. |
Government Programs
Government Programs | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Government Programs | Government Programs Research and Development Tax Incentive The Company recognized AUD 493,000 ( $389,000 ) and AUD 1.1 million ( $0.9 million ) as a reduction of research and development expenses for the three and nine months ended September 30, 2017, respectively, in connection with the research and development tax incentive from Australia. The Company recognized AUD 181,000 ( $145,000 ) and AUD 1.6 million ( $1.2 million ) as a reduction of research and development expenses for the three and nine months ended September 30, 2016, respectively, in connection with the research and development tax incentive from Australia. As of September 30, 2017 , and December 31, 2016 , the research and development tax incentive receivable was AUD 1.1 million ( $0.9 million ) and AUD 3.1 million ( $2.2 million), respectively. In March 2016, the Company received AUD 237,000 ( $182,000 ) for overseas findings and recorded the funds as deferred tax incentive in accrued expenses and other payables on the condensed consolidated balance sheet due to the possibility that the funds could have to be repaid. In December 2016, the Company’s research and development project under the AusIndustry research and development tax incentive program was complete and the Company substantiated that more than 50% of the total project expenditures occurred in Australia. Therefore, the overseas finding related incentive amounts were no longer deemed to be at risk of clawback and the Company recognized such amounts in December 2016 as a reduction of research and development expenses for the overseas findings received in 2016. The Company has concluded that amounts received under the Janssen License and Collaboration Agreement should be classified as statutory income for Australian taxation purposes. On this basis they should not be included in the calculation of annual turnover for the purposes of determining eligibility for the refundable research and development tax offset. SBIR Grant In May 2017, the Company was awarded a Phase 2 Small Business Innovation Research ("SBIR") Grant from the National Institute of Diabetes and Digestive and Kidney Diseases ("NIDDK") of the National Institutes of Health ("NIH") in support of research aimed at developing biomarkers that define IL-23R target engagement by oral peptide antagonists and the effects of that engagement of downstream signaling. The total grant award was $1.3 million and is for the period from May 2017 to April 2019. In July 2016, the Company was awarded a Phase 1 SBIR Grant from the National Institute of Heart and Lung Diseases of the NIH in support of pre-clinical research aimed at discovering and optimizing lead molecules as novel peptide mimetics of the natural hepcidin hormone. The total grant award was $219,000 and was for the period from August 2016 to January 2017. In September 2015, the Company was awarded a Phase 1 SBIR Grant from the NIDDK of the NIH in support of research on orally stable peptide antagonists of IL-23R as potential treatments for IBD. The total grant award was $224,000 and was for the period from September 2015 to August 2016. The Company recognizes a reduction to research and development expenses when expenses related to the grants have been incurred and the grant funds become contractually due from NIH. The Company recorded $103,000 and $123,000 as a reduction of research and development expenses for the three and nine months ended September 30, 2017. The Company recorded $66,000 and $135,000 as a reduction of research and development expenses for the three and nine months ended September 30, 2016. The Company recorded a receivable for $103,000 and $ 100,000 as of September 30, 2017 and December 31, 2016 , respectively, to reflect the eligible costs incurred under the grants that are contractually due to the Company and such amounts are included in the prepaid expenses and other current assets on the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In March 2017, the Company entered into a lease agreement for office and laboratory space located in Newark, California. The Company relocated its operations to the new facility in May 2017. The Company provided the landlord with a $450,000 letter of credit collateralized by restricted cash as security deposit for the lease, which expires in May 2024. The Company is entitled to tenant improvement allowances of approximately $469,000 , any unused portion of which expires in December 2018. The Company records tenant improvement allowances as deferred rent when funds are received and associated capital expenditures as leasehold improvements that will be amortized over the shorter of their useful life or the remaining term of the lease. The following table summarizes the Company's minimum lease payments related to the Newark facility as of September 30, 2017 (in thousands): Year Ending December 31: Amount 2017 (remaining three months) $ 264 2018 1,667 2019 1,941 2020 2,000 2021 2,059 Thereafter 5,228 Total minimum lease payments $ 13,159 |
Preferred Stock Warrants
Preferred Stock Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Preferred Stock Warrants | Preferred Stock Warrants In April 2016, 1,999,998 shares of Series B redeemable convertible preferred stock were issued for cash proceeds of $20,000 in connection with the exercise of warrants. Immediately prior to the exercise of the warrants, the fair value of the warrants was remeasured at $1.0 million , determined using a hybrid method of the Option Pricing Model with a 67% weighted value per share and the probability-weighted expected return method (“PWERM”) with a 33% weighted value per share. Upon the exercise of warrants, the redeemable convertible preferred stock warrant liability of $1.0 million was reclassified to redeemable convertible preferred stock. In May 2016, the remaining warrants for the purchase of 2,000,000 shares of Series B redeemable convertible preferred stock expired unexercised. The Company recorded a charge of $525,000 for the increase in the fair value of the redeemable convertible preferred stock warrant liability in the condensed consolidated statements of operations for the nine months ended September 30, 2016. There were no such charges incurred for the three and nine months ended September 30, 2017. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock Tranche Liability | 9 Months Ended |
Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock Tranche Liability | Redeemable Convertible Preferred Stock Tranche Liability In July 2015, the Company entered into the Series C Preferred Stock Purchase Agreement (“the Series C Agreement”) for the issuance of up to 80,337,411 shares of Series C redeemable convertible preferred stock at a price of $0.4979 per share, in multiple closings. The initial closing occurred on July 10, 2015, whereby 35,147,617 shares of Series C redeemable convertible preferred stock were issued for gross proceeds of approximately $17.5 million . According to the initial terms of the Series C Agreement, the Company could issue 45,189,794 additional shares under the same terms as the initial closing, in a subsequent closing (“Series C Second Tranche”) contingent upon the achievement of certain development milestones. On the date of the initial closing, the Company recorded a Series C redeemable convertible preferred stock liability of $1.0 million , as the fair value of the obligation/right to complete the Series C Second Tranche. In March 2016, the Company completed the closing of the Series C Second Tranche and issued 45,189,794 shares of Series C redeemable convertible preferred stock for net cash proceeds of $22.5 million . At this time, the Series C redeemable convertible preferred stock liability was remeasured at $5.8 million , determined using a hybrid method of the Option Pricing Model with a 67% weighted value per share and the PWERM with a 33% weighted value per share. Upon the closing of the Series C Second Tranche, the Series C redeemable convertible preferred stock liability was terminated and the balance of the liability of $5.8 million was reclassified to redeemable convertible preferred stock. The Company recorded a charge of $4.2 million for the increase in the fair value of the Series C redeemable convertible preferred stock liability in the condensed consolidated statements of operations for the nine months ended September 30, 2016. There were no such charges incurred for the three months ended September 30, 2016 and the three and nine months ended September 30, 2017. |
Equity Plans
Equity Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Plans | Equity Plans Equity Incentive Plan In July 2016, the Company’s board of directors and stockholders approved the Company's 2016 Equity Incentive Plan (the “2016 Plan”) to replace the 2007 Stock Option Plan, which became effective upon the Company’s IPO. Under the 2016 Plan, 1,200,000 shares of the Company’s common stock were initially reserved for issuance of stock options, restricted stock units, and other awards to employees, directors, and consultants. Pursuant to the “evergreen” provision contained in the 2016 Plan, the number of shares reserved for issuance under the 2016 Plan automatically increases on January 1 of each year, starting on January 1, 2017 and continuing through (and including) January 1, 2026, by 4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding fiscal year, or a lesser number of shares determined by the Company’s board of directors. As of September 30, 2017 , the Company has reserved 1,868,891 shares of common stock for issuance under the 2016 Plan. The 2016 Plan is administered by the board of directors or a committee appointed by the board of directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Options granted under the 2016 Plan expire no later than ten years from the date of grant. Employee stock options generally vest over a period of four years. Non-employee director initial stock options generally vest over a period of three years, and non-employee director annual refresher stock options generally vest over a period of approximately one year. Stock Options Activity under the Company’s equity incentive plans is set forth below: Options Outstanding Options Available for Grant Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) (in millions) Balances at December 31, 2016 164,328 2,393,829 $ 10.39 8.79 Additional options authorized 668,891 — Options granted (403,000 ) 403,000 $ 12.08 Options exercised — (173,155 ) $ 1.50 Options forfeited 85,930 (85,930 ) $ 16.79 Balances at September 30, 2017 516,149 2,537,744 $ 11.05 8.55 $ 20.2 Options exercisable at September 30, 2017 811,539 $ 8.72 8.03 $ 8.2 Options vested and expected to vest at September 30, 2017 2,537,744 $ 11.05 8.55 $ 20.2 ____________________ (1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on September 30, 2017 . The calculation excludes options with an exercise price higher than the closing price of the Company's common stock on September 30, 2017 . During the nine months ended September 30, 2017, the estimated weighted-average grant-date fair value of common stock underlying options granted was $7.11 per share. Employee Stock Options Valuation The fair value of employee and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Expected term (in years) 6.08 4.16 - 5.70 5.50 - 6.08 4.16 - 5.94 Expected volatility 62.1% 62.8% 62.1% - 65.4% 62.5% - 64.8% Risk-free interest rate 2.00% 1.38% 1.88% - 2.07% 1.27% - 1.38% Dividend yield — — — — Employee Stock Purchase Plan In July 2016, the Company’s board of directors and stockholders approved the 2016 Employee Stock Purchase Plan (the “2016 ESPP”), which became effective upon the closing of the IPO. Under the 2016 ESPP, 150,000 shares of the Company’s common stock were initially reserved for issuance for employee purchases of the Company’s common stock. Pursuant to the “evergreen” provision contained in the 2016 ESPP, the number of shares reserved for issuance under the 2016 ESPP automatically increases on January 1 of each year, starting on January 1, 2017 and continuing through (and including) January 1, 2026 by the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding fiscal year, (ii) 300,000 shares, or (iii) such other number of shares determined by the Company’s board of directors. The 2016 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. At the end of each offering period, eligible employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period. As of September 30, 2017 , a total of 317,222 shares of common stock were reserved for issuance under the 2016 ESPP, and 48,668 shares have been issued. Stock-Based Compensation Total stock-based compensation expense was as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Research and development $ 600 $ 285 $ 1,399 $ 360 General and administrative 607 163 1,653 250 Total stock-based compensation expense $ 1,207 $ 448 $ 3,052 $ 610 As of September 30, 2017 , total unrecognized stock-based compensation expense related to stock options totaled $11.7 million , which the Company expects to recognize over a weighted-average period of approximately 2.60 years years. |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders As the Company had net losses for the three and nine months ended September 30, 2017 and 2016 , all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator: Net loss $ (4,825 ) $ (7,084 ) $ (33,905 ) $ (25,929 ) Accretion of redeemable convertible preferred stock — (293 ) — (558 ) Net loss attributable to common stockholders $ (4,825 ) $ (7,377 ) $ (33,905 ) $ (26,487 ) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 16,911,575 8,483,189 16,851,672 3,071,456 Net loss per share attributable to common stockholders, basic and diluted $ (0.29 ) $ (0.87 ) $ (2.01 ) $ (8.62 ) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share attributable to common stockholders computations for the three and nine months ended September 30, 2017 and 2016 because their inclusion would be anti-dilutive: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Options to purchase common stock 2,537,744 1,496,156 2,537,744 1,496,156 ESPP shares 26,610 — 26,610 — Total 2,564,354 1,496,156 2,564,354 1,496,156 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 16, 2017, pursuant to the Company's shelf registration statement on Form S-3, the Company completed an underwritten public offering of 3,530,000 shares of common stock at a public offering price of $17.00 per share for total gross proceeds of $60.0 million . Net proceeds, after deducting underwriting commissions and offering costs, were approximately $56.2 million . The Company granted the underwriters an option to purchase up to 529,500 additional shares at the public offering price, less underwriting discounts and commissions, which expires on November 10, 2017. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s consolidated financial information. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or for any other future year. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 7, 2017. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates related to revenue recognition, accruals for research and development activities, stock-based compensation, and income taxes. Estimates related to revenue recognition include actual costs incurred versus total estimated budgeted cost of the Company's deliverables, actual costs incurred versus total estimated budgeted cost of variable consideration, and application of constraint in the determination of transaction price under its license and collaboration agreement with Janssen Biotech, Inc. (the "Janssen License and Collaboration Agreement"). Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ significantly from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and available-for-sale securities. Substantially all of the Company’s cash is held by two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and to meet liquidity requirements. The Company’s cash equivalents and available-for-sale securities are managed by external managers within the guidelines of the Company’s investment policy. The Company’s investment policy addresses the level of credit exposure by limiting concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage its credit risk exposure, the Company maintains its portfolio of cash equivalents and available-for-sale securities in fixed income securities denominated and payable in U.S. dollars. Permissible investments of fixed income securities include obligations of the U.S. government and its agencies, money market instruments including commercial paper and negotiable certificates of deposit, and highly rated corporate debt obligations and money market funds. The Company has not experienced any material credit losses on its investments. |
Cash Equivalents | Cash Equivalents Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash consists of cash balances primarily held as security in connection with the Company’s corporate credit card and a letter of credit related to the Company's facility lease entered into in March 2017. Cash as Reported in Consolidated Statements of Cash Flows Cash as reported in the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets. |
Available-for-Sale Securities | Available-for-Sale Securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term marketable securities have maturities greater than three months but no longer than 365 days as of the balance sheet date. Long-term marketable securities have maturities of 365 days or longer as of the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value accounting is applied to all financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis (at least annually). The carrying amount of the Company’s financial instruments, including cash equivalents, receivable from collaboration partner, accounts payable and accrued expenses and other payables approximates fair value due to their short-term maturities. |
Revenue Recognition | Revenue Recognition Effective July 1, 2017, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606") using the full retrospective transition method. The Company did not have any effective contracts within the scope of this guidance prior to July 1, 2017. Accordingly, the Company did not elect to use any of the practical expedients permitted related to adoption, and the adoption of ASC 606 had no impact on the Company's financial position, results of operations or liquidity. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company entered into a license and collaboration agreement that became effective upon the resolution of regulatory requirements during the third quarter of 2017 which is within the scope of ASC 606, under which it has licensed certain rights to its PTG-200 product candidate to a third party and may enter into other such arrangements in the future. The terms of the arrangement include payment to the Company of one or more of the following: non-refundable, up-front license fees, development and regulatory and commercial milestone payments, and royalties on net sales of licensed products. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. To date, the Company has not recognized any milestone payments resulting from its collaboration arrangement. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaboration arrangement. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and preclinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced, and includes these costs in accrued expenses and other payables in the condensed consolidated balance sheets and within research and development expense in the condensed consolidated statements of operations. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities at each balance sheet date. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, and the rate of patient enrollment may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. |
Research and Development Tax Incentive | Research and Development Tax Incentive The Company is eligible under the AusIndustry research and development tax incentive program to obtain a cash amount from the Australian Taxation Office. The tax incentive is available to the Company on the basis of specific criteria with which the Company must comply. Specifically, the Company must have annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities. The research and development tax incentive is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible. The tax incentive is denominated in Australian dollars and, therefore, the related receivable is remeasured into U.S. dollars as of each reporting date. Under certain conditions, research and development activities conducted outside Australia (“overseas finding”) also qualify for the research and development tax incentive. Funds received for overseas finding are at a risk of clawback until substantiation that less than 50% of research and development expenditures for a project will be incurred overseas. A deferred tax incentive is recorded upon the cash receipt of the overseas finding funds and a reduction of research and development expense is not recognized until the Company can substantiate that more than 50% of the total project expenditure will occur in Australia. When there is reasonable assurance that the grant will be received with remote risk of clawback, the relevant expenditure has been incurred, and the consideration can be reliably measured, the Company records the research and development incentive, including the overseas finding funds, as research and development tax incentive receivable and a reduction of research and development expenses to reflect that the funds are owed to the Company for the period the eligible costs are incurred. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. The net loss attributable to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the redeemable convertible preferred stock, if applicable. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for all periods presented since the effect of potentially dilutive securities are anti-dilutive given the net loss of the Company. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and creates a new ASC Topic 606, Revenue from Contracts with Customers . Customers. Subsequent to May 2014, the FASB issued additional guidance that delayed the effective date and clarified various aspects of the new guidance, including principal versus agent considerations, identifying performance obligations and licensing, and also included other improvements and practical expedients. The Company adopted this new guidance effective July 1, 2017 using the full retrospective transition method. The Company did not have any effective contracts within the scope of this guidance prior to July 1, 2017. Accordingly, the Company did not elect to use any of the practical expedients permitted under the transition guidance, and the adoption had no impact on the Company's previously reported financial position, results of operations or liquidity. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , which is intended to simplify and improve how deferred income taxes are classified on the balance sheet. This guidance eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet and now requires entities to classify all deferred tax assets and liabilities as noncurrent. The guidance is effective for annual periods beginning after December 15, 2016 and for interim periods within those annual periods, and early adoption is permitted. The Company adopted this guidance effective January 1, 2017. The adoption of this guidance did not have a material impact on the Company's financial position, results of operations or liquidity. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of accounting for employee share-based payment transactions, including income tax consequences, the determination of forfeiture rates, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016, and early adoption is permitted. The Company adopted this guidance effective January 1, 2017 and has elected to recognize forfeitures of share-based payment awards as they occur on a prospective basis. The impact of the adoption of ASU 2016-09 was not material to the Company’s condensed consolidated financial statements. The adoption of this guidance did not have a material impact on the income tax effects of share-based payment awards as the resulting change in the Company's deferred income tax assets is fully offset by a corresponding deferred income tax asset valuation allowance. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires the presentation of changes in restricted cash or restricted cash equivalents on the statement of cash flows. This guidance is effective for the fiscal years and interim periods within those years beginning after December 15, 2017, with early adoption permitted. The Company early adopted this guidance effective March 31, 2017, and, accordingly, amounts generally described as restricted cash are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts of cash reflected on the accompanying consolidated statements of cash flows. The Company has adopted ASU 2016-18 retrospectively and has revised the prior period cash flows from investing activities, beginning cash balance, and ending cash balance to reflect the change in presentation of restricted cash. Other than the change in presentation in the accompanying consolidated statements of cash flows, the adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. Recently Issued Accounting Pronouncements Not Adopted as of September 30, 2017 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, (with the exception of short-term leases) at the commencement date, lessees will be required to recognize a lease liability and a right-of-use asset. Lessor accounting is largely unchanged, while lessees will no longer be provided with a source of off-balance sheet financing. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Lessees (for capital and operating leases) are required to apply the modified retrospective transition method for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective method does not require any transition accounting for leases that did not exist before the earliest comparative period presented. While the Company continues to evaluate the impact of this guidance on its consolidated financial statements and disclosures, it expects that its non-cancellable operating lease commitments will be subject to the new guidance and recognized as right-of-use assets and operating lease liabilities on the Company’s consolidated balance sheets, and that the adoption of this new guidance will not have a material impact on its results of operations or liquidity. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. The new standard replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2019 and early adoption is permitted for fiscal years and interim periods within those years beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the classification of certain cash receipts and cash payments in the statements of cash flow to eliminate the diversity in practice related to eight specific cash flow issues. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements and disclosures. |
Fair Value Measurements | Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2— Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents | Cash as reported in the unaudited condensed consolidated statements of cash flows consists of (in thousands): September 30, 2017 2016 Cash and cash equivalents $ 50,395 $ 96,024 Restricted cash - current 10 10 Restricted cash - noncurrent 450 — Cash balance in condensed consolidated statements of cash flows $ 50,855 $ 96,034 |
Schedule of Cash and Cash Equivalents | Cash as reported in the unaudited condensed consolidated statements of cash flows consists of (in thousands): September 30, 2017 2016 Cash and cash equivalents $ 50,395 $ 96,024 Restricted cash - current 10 10 Restricted cash - noncurrent 450 — Cash balance in condensed consolidated statements of cash flows $ 50,855 $ 96,034 |
Janssen Collaboration Agreeme22
Janssen Collaboration Agreement (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Text Block [Abstract] | |
Contract with Customer, Asset and Liability | The following table presents changes in the Company’s contract assets and liabilities during the three and nine months ended September 30, 2017 (in thousands): Three and nine months ended September 30, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner - related party $ — $ 520 $ — $ 520 Contract liabilities: Deferred revenue - related party $ — $ 50,132 $ (8,393 ) $ 41,739 The following table presents changes in the Company’s contract assets and liabilities during the three months ended September 30, 2017 (in thousands): Three months ended September 30, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner - related party $ — $ 520 $ — $ 520 Contract liabilities: Deferred revenue - related party $ — $ 50,000 $ (8,261 ) $ 41,739 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents the fair value of the Company’s financial assets and liabilities determined using the inputs defined above (in thousands). September 30, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 47,638 $ — $ — $ 47,638 Corporate bonds — 7,495 — 7,495 Government bonds — 47,013 — 47,013 Total financial assets $ 47,638 $ 54,508 $ — $ 102,146 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 11,270 $ — $ — $ 11,270 Corporate bonds — 21,841 — 21,841 Commercial paper — 10,769 — 10,769 Government bonds — 41,289 — 41,289 Total financial assets $ 11,270 $ 73,899 $ — $ 85,169 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Cash Equivalents and Available-for-sale Securities | Cash equivalents and available-for-sale securities consisted of the following (in thousands): September 30, 2017 Amortized Cost Gross Unrealized Gains Losses Fair Value Money market funds $ 47,638 $ — $ — $ 47,638 Corporate bonds 7,502 — (7 ) 7,495 Government bonds 47,056 — (44 ) 47,012 Total cash equivalents and available-for-sale securities $ 102,196 $ — $ (51 ) $ 102,145 Classified as: Cash equivalents $ 47,638 Available-for-sale securities - current 43,191 Available-for-sale securities - noncurrent 11,316 Total cash equivalents and available-for-sale securities $ 102,145 December 31, 2016 Amortized Cost Gross Unrealized Gains Losses Fair Value Money market funds $ 11,270 $ — $ — $ 11,270 Corporate bonds 21,886 — (45 ) 21,841 Commercial paper 10,769 — — 10,769 Government bonds 41,316 2 (29 ) 41,289 Total cash equivalents and available-for-sale securities $ 85,241 $ 2 $ (74 ) $ 85,169 Classified as: Cash equivalents $ 18,504 Available-for-sale securities - current 56,515 Available-for-sale securities - noncurrent 10,150 Total cash equivalents and available-for-sale securities $ 85,169 |
Summary of Accrued Expenses and Other Payables | Accrued expenses and other payables consisted of the following (in thousands): September 30, 2017 December 31, 2016 Accrued clinical and research related expenses $ 5,864 $ 3,617 Accrued employee related expenses 1,611 1,420 Accrued professional service fees 709 115 Other 57 120 Total accrued expenses and other payables $ 8,241 $ 5,272 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table summarizes the Company's minimum lease payments related to the Newark facility as of September 30, 2017 (in thousands): Year Ending December 31: Amount 2017 (remaining three months) $ 264 2018 1,667 2019 1,941 2020 2,000 2021 2,059 Thereafter 5,228 Total minimum lease payments $ 13,159 |
Equity Plans (Tables)
Equity Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Activity under Stock Option Plan | Activity under the Company’s equity incentive plans is set forth below: Options Outstanding Options Available for Grant Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) (in millions) Balances at December 31, 2016 164,328 2,393,829 $ 10.39 8.79 Additional options authorized 668,891 — Options granted (403,000 ) 403,000 $ 12.08 Options exercised — (173,155 ) $ 1.50 Options forfeited 85,930 (85,930 ) $ 16.79 Balances at September 30, 2017 516,149 2,537,744 $ 11.05 8.55 $ 20.2 Options exercisable at September 30, 2017 811,539 $ 8.72 8.03 $ 8.2 Options vested and expected to vest at September 30, 2017 2,537,744 $ 11.05 8.55 $ 20.2 ____________________ (1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on September 30, 2017 . The calculation excludes options with an exercise price higher than the closing price of the Company's common stock on September 30, 2017 . |
Schedule of Stock-based Compensation Expense for Employees and Non-employees for Stock Options and the 2016 ESPP | Total stock-based compensation expense was as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Research and development $ 600 $ 285 $ 1,399 $ 360 General and administrative 607 163 1,653 250 Total stock-based compensation expense $ 1,207 $ 448 $ 3,052 $ 610 |
Employee and Director [Member] | |
Schedule of Grant-date Fair Value of Stock Option Awards Using Black-Scholes Option Pricing Model Assumptions | The fair value of employee and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Expected term (in years) 6.08 4.16 - 5.70 5.50 - 6.08 4.16 - 5.94 Expected volatility 62.1% 62.8% 62.1% - 65.4% 62.5% - 64.8% Risk-free interest rate 2.00% 1.38% 1.88% - 2.07% 1.27% - 1.38% Dividend yield — — — — |
Net Loss per Share Attributab27
Net Loss per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator: Net loss $ (4,825 ) $ (7,084 ) $ (33,905 ) $ (25,929 ) Accretion of redeemable convertible preferred stock — (293 ) — (558 ) Net loss attributable to common stockholders $ (4,825 ) $ (7,377 ) $ (33,905 ) $ (26,487 ) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 16,911,575 8,483,189 16,851,672 3,071,456 Net loss per share attributable to common stockholders, basic and diluted $ (0.29 ) $ (0.87 ) $ (2.01 ) $ (8.62 ) |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share attributable to common stockholders computations for the three and nine months ended September 30, 2017 and 2016 because their inclusion would be anti-dilutive: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Options to purchase common stock 2,537,744 1,496,156 2,537,744 1,496,156 ESPP shares 26,610 — 26,610 — Total 2,564,354 1,496,156 2,564,354 1,496,156 |
Organization and Description 28
Organization and Description of Business - Additional Information (Detail) $ / shares in Units, $ in Thousands | Aug. 16, 2016$ / sharesshares | Sep. 30, 2017USD ($) | Sep. 30, 2016$ / sharesshares | Jul. 31, 2016 | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)$ / shares | Dec. 31, 2016USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||
Accumulated deficit | $ 98,498 | $ 98,498 | $ 64,593 | |||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Proceeds from issuance of initial public offering, net of issuance cost | $ 0 | $ 84,508 | ||||||
Stock split, conversion ratio | 0.0689655 | |||||||
S-3 Offering [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock issuance sales agreement authorized offering price maximum | 200,000 | |||||||
At-The-Market Offering [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock issuance sales agreement authorized offering price maximum | $ 50,000 | |||||||
IPO [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock issued during period, shares, new issues | shares | 7,500,000 | 252,972 | ||||||
Shares issued, price per share (in usd per share) | $ / shares | $ 12 | $ 12 | $ 12 | $ 12 | ||||
Proceeds from issuance of initial public offering, net of issuance cost | $ 83,600 | |||||||
Common Stock [Member] | IPO [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Convertible preferred stock, shares issued upon conversion | shares | 8,577,571 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Restricted Cash [Abstract] | ||||
Cash and cash equivalents | $ 50,395 | $ 21,084 | $ 96,024 | |
Restricted cash - current | 10 | 10 | 10 | |
Restricted cash - noncurrent | 450 | 0 | 0 | |
Cash balance in condensed consolidated statements of cash flows | $ 50,855 | $ 21,094 | $ 96,034 | $ 4,065 |
Janssen Collaboration Agreeme30
Janssen Collaboration Agreement (Details) - USD ($) | Jul. 13, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
License and collaboration revenue - related party | $ 8,781,000 | $ 0 | $ 8,781,000 | $ 0 | ||||
Deferred revenue - related party | 41,739,000 | 41,739,000 | $ 0 | |||||
Receivable from collaboration partner - related party | 520,000 | 520,000 | 0 | |||||
Change in Contract with Customer, Asset and Liability [Abstract] | ||||||||
Contract with Customer, Asset, Net | 520,000 | 520,000 | $ 0 | 0 | ||||
Contract with Customer, Asset, Period Increase | 520,000 | 520,000 | ||||||
Contract with Customer, Liability | 41,739,000 | 41,739,000 | $ 0 | $ 0 | ||||
Contract with Customer, Liability, Period Increase | 50,000,000 | 50,132,000 | ||||||
Contract with Customer, Liability, Revenue Recognized | (8,261,000) | (8,393,000) | ||||||
Janssen Biotech, Inc. [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
License and collaboration revenue - related party | $ 400,000 | $ 400,000 | ||||||
Collaborative Arrangement, Product [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative arrangement, percentage of development costs incurred | 20.00% | 20.00% | ||||||
Collaborative Arrangement, Product [Member] | Janssen Biotech, Inc. [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Nonrefundable upfront payment | $ 50,000,000 | |||||||
Collaborative arrangement, percentage of development costs incurred | 80.00% | 80.00% | ||||||
License and collaboration revenue - related party | $ 8,800,000 | $ 8,800,000 | ||||||
Revenue recognition, amount | 8,400,000 | 8,400,000 | ||||||
Deferred revenue - related party | 100,000 | 100,000 | ||||||
Change in Contract with Customer, Asset and Liability [Abstract] | ||||||||
Contract with Customer, Asset, Net | 54,200,000 | 54,200,000 | ||||||
Contract with Customer, Liability, Revenue Recognized | 8,400,000 | |||||||
Collaborative Arrangement, Product [Member] | Janssen Biotech, Inc. [Member] | Scenario, Forecast [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent consideration receivable | $ 25,000,000 | |||||||
Collaboration agreement, detail capital required for commercial launch, percent (up to) | 30.00% | |||||||
First Opt-in [Member] | Collaborative Arrangement, Product [Member] | Janssen Biotech, Inc. [Member] | Scenario, Forecast [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Forfeiture of remaining rights and payment of cost, penalty percentage | 50.00% | |||||||
Future opt-in payment eligible to receive under collaboration arrangement | $ 125,000,000 | |||||||
Second Opt-in [Member] | Collaborative Arrangement, Product [Member] | Janssen Biotech, Inc. [Member] | Scenario, Forecast [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Future opt-in payment eligible to receive under collaboration arrangement | 200,000,000 | |||||||
Aggregate milestone payment | 590,000,000 | |||||||
Deferred Revenue [Member] | Collaborative Arrangement, Product [Member] | Janssen Biotech, Inc. [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Deferred revenue - related party | $ 41,700,000 | $ 41,700,000 | ||||||
Cost-Sharing Payments [Member] | Collaborative Arrangement, Product [Member] | Janssen Biotech, Inc. [Member] | Scenario, Forecast [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent consideration receivable | $ 4,200,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 102,146 | $ 85,169 |
Corporate Bonds Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 7,495 | 21,841 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 47,638 | 11,270 |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 10,769 | |
Government Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 47,013 | 41,289 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 47,638 | 11,270 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 47,638 | 11,270 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 54,508 | 73,899 |
Level 2 [Member] | Corporate Bonds Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 7,495 | 21,841 |
Level 2 [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 10,769 | |
Level 2 [Member] | Government Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 47,013 | $ 41,289 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Cash Equivalents and Available-for-sale Securities (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents and available-for-sale securities, Amortized Cost | $ 102,196 | $ 85,241 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Gains | 0 | 2 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses | (51) | (74) |
Total cash equivalents and available-for-sale securities, Fair Value | 102,145 | 85,169 |
Cash equivalents | 47,638 | 18,504 |
Available-for-sale securities - current | 43,191 | 56,515 |
Available-for-sale securities - noncurrent | 11,316 | 10,150 |
Total cash equivalents and available-for-sale securities, Fair Value | 102,145 | 85,169 |
Corporate Bonds Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents and available-for-sale securities, Amortized Cost | 7,502 | 21,886 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Gains | 0 | 0 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses | (7) | (45) |
Total cash equivalents and available-for-sale securities, Fair Value | 7,495 | 21,841 |
Total cash equivalents and available-for-sale securities, Fair Value | 7,495 | 21,841 |
Money Market Funds [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents and available-for-sale securities, Amortized Cost | 47,638 | 11,270 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Gains | 0 | 0 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses | 0 | 0 |
Total cash equivalents and available-for-sale securities, Fair Value | 47,638 | 11,270 |
Total cash equivalents and available-for-sale securities, Fair Value | 47,638 | 11,270 |
Commercial Paper [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents and available-for-sale securities, Amortized Cost | 10,769 | |
Total cash equivalents and available-for-sale securities, Gross Unrealized Gains | 0 | |
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses | 0 | |
Total cash equivalents and available-for-sale securities, Fair Value | 10,769 | |
Total cash equivalents and available-for-sale securities, Fair Value | 10,769 | |
Government Bonds [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Total cash equivalents and available-for-sale securities, Amortized Cost | 47,056 | 41,316 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Gains | 0 | 2 |
Total cash equivalents and available-for-sale securities, Gross Unrealized Losses | (44) | (29) |
Total cash equivalents and available-for-sale securities, Fair Value | 47,012 | 41,289 |
Total cash equivalents and available-for-sale securities, Fair Value | $ 47,012 | $ 41,289 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Detail) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Realized gains or losses on available-for-sale securities | $ 0 | $ 0 |
Balance Sheet Components - Su34
Balance Sheet Components - Summary of Accrued Expenses and Other Payables (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued clinical and research related expenses | $ 5,864 | $ 3,617 |
Accrued employee related expenses | 1,611 | 1,420 |
Accrued professional service fees | 709 | 115 |
Other | 57 | 120 |
Total accrued expenses and other payables | $ 8,241 | $ 5,272 |
Research Collaboration and Li35
Research Collaboration and License Agreement - Additional Information (Detail) - Research Collaboration and License Agreement [Member] - PTG-300 [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Upfront payment based on agreement | $ 250,000 | ||
Milestone payment upon contractual obligation | $ 250,000 | ||
Term (in years) | 10 years | ||
Development Milestones [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Aggregate milestone payment | $ 28,500,000 | ||
Sales Milestones [Member] | Maximum [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Aggregate milestone payment | $ 100,000,000 |
Government Programs - Additiona
Government Programs - Additional Information (Detail) AUD in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
May 31, 2017USD ($) | Jul. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2016AUD | Sep. 30, 2015USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017AUD | Sep. 30, 2016USD ($) | Sep. 30, 2016AUD | Sep. 30, 2017USD ($) | Sep. 30, 2017AUD | Sep. 30, 2016USD ($) | Sep. 30, 2016AUD | Sep. 30, 2017AUD | Dec. 31, 2016USD ($) | Dec. 31, 2016AUD | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Research and development tax incentive receivable | $ 885 | $ 885 | $ 2,241 | |||||||||||||
SBIR Grant [Member] | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Reduction of research and development expenses related to tax | 103 | $ 66 | 123 | $ 135 | ||||||||||||
Research and development grants | $ 1,300 | $ 219 | $ 224 | |||||||||||||
Grants receivable | 103 | 103 | 100 | |||||||||||||
Overseas Findings [Member] | Australian Taxation Office [Member] | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Research and development tax incentive receivable | 900 | 900 | AUD 1,100 | $ 2,200 | AUD 3,100 | |||||||||||
Deferred tax incentive | $ 182 | AUD 237 | ||||||||||||||
Research and Development Tax Incentive [Member] | Australian Taxation Office [Member] | ||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Reduction of research and development expenses related to tax | $ 389 | AUD 493 | $ 145 | AUD 181 | $ 900 | AUD 1,100 | $ 1,200 | AUD 1,600 |
Lease Agreement - Additional In
Lease Agreement - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2017 (remaining three months) | $ 264 |
2,018 | 1,667 |
2,019 | 1,941 |
2,020 | 2,000 |
2,021 | 2,059 |
Thereafter | 5,228 |
Total minimum lease payments | 13,159 |
Newark, California [Member] | |
Operating Leased Assets [Line Items] | |
Letter of credit, outstanding amount | 450 |
Tenant improvement allowances | $ 469 |
Preferred Stock Warrants - Addi
Preferred Stock Warrants - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | May 31, 2016 | |
Class of Warrant or Right [Line Items] | |||||
Proceeds from issuance of redeemable convertible preferred stock upon exercise of warrants | $ 0 | $ 22,508 | |||
Remeasured fair value of warrants | $ 1,000 | ||||
Reclassification of redeemable convertible preferred stock warrant liability to redeemable convertible preferred stock | 0 | 1,005 | |||
Change in fair value of redeemable convertible preferred stock warrant liability | $ 0 | $ 0 | $ 525 | ||
Redeemable Convertible Preferred Stock Warrant Liability [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Reclassification of redeemable convertible preferred stock warrant liability to redeemable convertible preferred stock | $ 1,000 | ||||
Option Pricing Model [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Percentage of weighted value per share | 67.00% | ||||
PWERM [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Percentage of weighted value per share | 33.00% | ||||
Series B Redeemable Convertible Preferred Stock [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Redeemable convertible preferred stock, shares issued | 1,999,998 | ||||
Proceeds from issuance of redeemable convertible preferred stock upon exercise of warrants | $ 20 | ||||
Number of redeemable convertible preferred stock expired unexercised | 2,000,000 |
Redeemable Convertible Prefer39
Redeemable Convertible Preferred Stock Tranche Liability (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 10, 2015 | Apr. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2015 |
Temporary Equity [Line Items] | ||||||||
Proceeds from issuance of redeemable convertible preferred stock upon exercise of warrants | $ 0 | $ 22,508 | ||||||
Settlement of fair value of redeemable convertible preferred stock liability | $ 5,800 | 0 | 5,837 | |||||
Change in fair value associated with redeemable convertible preferred stock tranche liability | 0 | 4,194 | ||||||
Series C Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Redeemable convertible preferred stock, shares issued | 45,189,794 | |||||||
Redeemable convertible preferred stock, price per share | $ 0.4979 | |||||||
Proceeds from issuance of redeemable convertible preferred stock upon exercise of warrants | $ 17,500 | $ 22,500 | ||||||
Fair value of redeemable convertible preferred stock liability | $ 1,000 | $ 5,800 | 5,800 | |||||
Change in fair value associated with redeemable convertible preferred stock tranche liability | $ 0 | $ 0 | $ 0 | $ 4,200 | ||||
Maximum [Member] | Series C Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Redeemable convertible preferred stock, shares issued | 35,147,617 | 80,337,411 | ||||||
Second Tranche Warrants [Member] | Series C Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Additional shares to be issued upon the achievement of certain development milestones | 45,189,794 | 45,189,794 | ||||||
Option Pricing Model [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Percentage of weighted value per share | 67.00% | |||||||
Option Pricing Model [Member] | Series C Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Percentage of weighted value per share | 67.00% | |||||||
PWERM [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Percentage of weighted value per share | 33.00% | |||||||
PWERM [Member] | Series C Redeemable Convertible Preferred Stock [Member] | ||||||||
Temporary Equity [Line Items] | ||||||||
Percentage of weighted value per share | 33.00% |
Equity Plans - Additional Infor
Equity Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
Jul. 31, 2016 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options, weighted-average grant-date fair value | $ 7.11 | |
Total unrecognized stock-based compensation costs related to stock options | $ 11.7 | |
Period of unrecognized stock-based compensation costs to be recognized | 2 years 7 months 6 days | |
2016 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 1,200,000 | 1,868,891 |
Percentage of outstanding stock maximum | 4.00% | |
2016 Equity Incentive Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 10 years | |
2016 Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 150,000 | 317,222 |
Percentage of outstanding stock maximum | 1.00% | |
Additional shares issuable maximum | 300,000 | |
Percentage of discount from fair market value of common stock on offering date | 85.00% | |
Shares issued in period | 48,668 | |
2016 Employee Stock Purchase Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum percentage of payroll deductions on eligible compensation | 15.00% | |
Employee Stock Option [Member] | 2016 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional vesting years | 4 years | |
Non-employee Director Initial Stock Options [Member] | 2016 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional vesting years | 3 years | |
Non-employee Director Annual Refresher Stock Options [Member] | 2016 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional vesting years | 1 year |
Equity Plans - Schedule of Acti
Equity Plans - Schedule of Activity under Stock Option Plan (Detail) - 2007 Stock Option Plan [Member] - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options Granted [Roll Forward] | ||
Options Available for Grant, Beginning balance | 164,328 | |
Options Available for Grant, Number of Additional Shares Authorized | 668,891 | |
Options Available for Grant, Options granted | (403,000) | |
Options Available for Grant, Options exercised | 0 | |
Options Available for Grant, Options Forfeited | 85,930 | |
Options Available for Grant, Ending balance | 516,149 | 164,328 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Options Outstanding, Beginning balance | 2,393,829 | |
Number of Options Outstanding, Options granted | 403,000 | |
Number of Options Outstanding, Options exercised | (173,155) | |
Number of Options Outstanding, Options Forfeited | (85,930) | |
Number of Options Outstanding, Ending balance | 2,537,744 | 2,393,829 |
Number of Options Outstanding, Options exercisable | 811,539 | |
Number of Options Outstanding, Options vested and expected to vest | 2,537,744 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted-Average Exercise Price Per Share, Beginning balance | $ 10.39 | |
Weighted-Average Exercise Price Per Share, Options granted | 12.08 | |
Weighted-Average Exercise Price Per Share, Options exercised | 1.50 | |
Weighted Average Exercise Price, Options Forfeited | 16.79 | |
Weighted-Average Exercise Price Per Share, Ending balance | 11.05 | $ 10.39 |
Weighted-Average Exercise Price Per Share, Options exercisable | 8.72 | |
Weighted-Average Exercise Price Per Share, Options vested and expected to vest | $ 11.05 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-Average Remaining Contractual Life (years) | 8 years 6 months 18 days | 8 years 9 months 15 days |
Weighted-Average Remaining Contractual Life (years), Options exercisable | 8 years 11 days | |
Weighted-Average Remaining Contractual Life (years), Options vested and expected to vest | 8 years 6 months 18 days | |
Aggregate Intrinsic Value, Options Outstanding | $ 20.2 | |
Aggregate Intrinsic Value, Options exercisable | 8.2 | |
Aggregate Intrinsic Value, Options vested and expected to vest | $ 20.2 |
Equity Plans - Schedule of Gran
Equity Plans - Schedule of Grant-date Fair Value of Employee and Director Stock Option Awards Using Black-Scholes Option Pricing Model Assumptions (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 years 29 days | |||
Expected volatility | 62.10% | 62.80% | ||
Risk-free interest rate | 2.00% | 1.38% | ||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 years 29 days | 5 years 11 months 9 days | ||
Expected volatility | 65.40% | 64.80% | ||
Risk-free interest rate | 2.07% | 1.38% | ||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 5 years 6 months | 4 years 1 month 28 days | ||
Expected volatility | 6.20% | 62.50% | ||
Risk-free interest rate | 1.88% | 1.27% |
Equity Plans - Schedule of Stoc
Equity Plans - Schedule of Stock-based Compensation Expense for Employees and Non-employees for Stock Options and the 2016 ESPP (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 1,207 | $ 448 | $ 3,052 | $ 610 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 600 | 285 | 1,399 | 360 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 607 | $ 163 | $ 1,653 | $ 250 |
Net Loss per Share Attributab44
Net Loss per Share Attributable to Common Stockholders - Schedule of Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net loss | $ (4,825) | $ (7,084) | $ (33,905) | $ (25,929) |
Accretion of redeemable convertible preferred stock | 0 | (293) | 0 | (558) |
Net loss attributable to common stockholders | $ (4,825) | $ (7,377) | $ (33,905) | $ (26,487) |
Denominator: | ||||
Weighted-average shares used to compute net loss per common share, basic and diluted | 16,911,575 | 8,483,189 | 16,851,672 | 3,071,456 |
Net loss per share attributable to common stockholders, basic and diluted (in usd per share) | $ (0.29) | $ (0.87) | $ (2.01) | $ (8.62) |
Net Loss per Share Attributab45
Net Loss per Share Attributable to Common Stockholders - Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities excluded from computation of net loss per share | 2,564,354 | 1,496,156 | 2,564,354 | 1,496,156 |
Options to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities excluded from computation of net loss per share | 2,537,744 | 1,496,156 | 2,537,744 | 1,496,156 |
Employee Stock Purchase Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Dilutive securities excluded from computation of net loss per share | 26,610 | 0 | 26,610 | 0 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] $ / shares in Units, $ in Millions | Oct. 16, 2017USD ($)$ / sharesshares |
S-3 Offering [Member] | |
Subsequent Event [Line Items] | |
Number of shares Issued in transaction | shares | 3,530,000 |
Sale of stock, price per share | $ / shares | $ 17 |
Consideration received on transaction, gross | $ | $ 60 |
Consideration received on transaction | $ | $ 56.2 |
Over-Allotment Option [Member] | |
Subsequent Event [Line Items] | |
Number of shares Issued in transaction | shares | 529,500 |