Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation |
|
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and are expressed in U.S. dollars. The financial statements have been prepared under the guidelines for Development Stage Entities. A development stage enterprise is one in which planned principal operations have not commenced, or if its operations have commenced, there have been no significant revenues therefrom. As of December 31, 2013, we continued to conduct clinical trials and had not commenced our planned principal operations. |
|
Certain prior year amounts have been reclassified to conform with the current year presentation. |
Consolidation, Policy [Policy Text Block] | ' |
Principles of Consolidation |
|
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, DermaBay, Inc. All inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates |
|
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include useful lives for property and equipment and related depreciation calculations, estimated amortization period for payments received from product development and license agreements as they relate to revenue recognition, assumptions for valuing options and warrants, and income taxes. Actual results could differ from those estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Cash and Cash Equivalents and Short-Term Investments |
|
The Company considers all highly liquid instruments with a stated maturity of three months or less to be cash and cash equivalents. As of December 31, 2013, cash and cash equivalents were held in financial institutions in the U.S. and include deposits in money market funds, which were unrestricted as to withdrawal or use. |
|
The Company classifies all highly liquid investments with a stated maturity of greater than three months as short-term investments. Short-term investments generally consist of certificates of deposit and corporate debt securities. The Company has classified their short-term investments as available-for-sale. The Company does not intend to hold securities with stated maturities greater than twelve months until maturity. In response to changes in the availability of and the yield on alternative investments as well as liquidity requirements, they occasionally sell these securities prior to their stated maturities. These securities are carried at fair value, with the unrealized gains and losses reported as a component of other comprehensive income (loss) until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value below cost of any available-for-sale security that is determined to be other than temporary results in a revaluation of its carrying amount to fair value and an impairment charge to earnings, resulting in a new cost basis for the security. No such impairment charges were recorded for the periods presented. The interest income and realized gains and losses are included in other income (expense), net within the consolidated statements of operations. Interest income is recognized when earned. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' |
Concentrations of Credit Risk and Major Partners |
|
Financial instruments which potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains deposits of cash, cash equivalents and short-term investments with three highly-rated, major financial institutions in the United States. |
|
Deposits in these banks may exceed the amount of federal insurance provided on such deposits. The Company does not believe they are exposed to significant credit risk due to the financial position of the financial institutions in which these deposits are held. Additionally, they have established guidelines regarding diversification and investment maturities, which are designed to maintain safety and liquidity. |
|
During the year ended December 31, 2013, revenues were derived from two collaboration partners, two distribution partners, sales of NeutroPhase products and service revenues. During the year ended December 31, 2012, revenues were derived from two collaboration partners, two distribution partners and service revenues. During the year ended December 31, 2011 revenues were derived from two collaboration partners and service revenues. |
|
As of December 31, 2013, 98% of accounts receivable was derived from one collaboration and one distribution partner. As of December 31, 2012, 96% of accounts receivable was derived from one collaboration and two distribution partners. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' |
Fair Value of Financial Assets and Liabilities |
|
Financial instruments, including accounts receivable, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. The fair value of capital lease obligations and equipment loans approximates their carrying amounts because the obligations bear market rates of interest. |
|
The Company measures the fair value of financial assets and liabilities based on U.S. GAAP guidance which defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. |
|
Under U.S. GAAP, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is also established, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: |
|
Level 1 – quoted prices in active markets for identical assets or liabilities; |
|
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable; |
|
Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions). |
Property, Plant and Equipment, Policy [Policy Text Block] | ' |
Property and Equipment |
|
Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets of five to seven years for office and laboratory equipment, three years for software and seven years for furniture and fixtures. Leasehold improvements are depreciated over the shorter of seven years or the lease term. Depreciation of assets recorded under capital leases is included in depreciation expense. |
|
The costs of normal maintenance, repairs, and minor replacements are charged to operations when incurred. |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | ' |
Impairment of Long-Lived Assets |
|
The Company accounts for long-lived assets in accordance with U.S. GAAP, which requires that companies consider whether events or changes in facts and circumstances, both internally and externally, may indicate that an impairment of long-lived assets held for use are present. Management periodically evaluates the carrying value of long-lived assets and has determined that there was no impairment as of all periods presented. Determination of recoverability is based on the estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the asset, the assets are written down to their estimated fair values and the loss is recognized in the statements of operations. |
Comprehensive Income, Policy [Policy Text Block] | ' |
Comprehensive Income (Loss) |
|
ASC 220, Comprehensive Income requires that an entity’s change in equity or net assets during a period from transactions and other events from non-owner sources be reported. The Company reports unrealized gains and losses on its available-for-sale securities as other comprehensive income (loss). |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition |
|
License and collaboration revenue is primarily generated through agreements with strategic partners for the development and commercialization of the Company’s product candidates. The terms of the agreements typically include non-refundable upfront fees, funding of research and development activities, payments based upon achievement of certain milestones and royalties on net product sales. In accordance with revenue recognition criteria under U.S. GAAP, the Company analyzes its multiple element arrangements to determine whether the elements can be separated. The Company performs its analysis at the inception of the arrangement and as each product or service is delivered. If a product or service is not separable, the combined deliverables are |
|
accounted for as a single unit of accounting and revenue is recognized over the performance obligation period. Revenue is recognized when the following criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred and risk of loss has passed; the seller’s price to the buyer is fixed or determinable; and collectability is reasonably assured. |
|
Assuming the elements meet the revenue recognition guidelines the revenue recognition methodology prescribed for each unit of accounting is summarized below: |
|
Upfront Fees—The Company defers recognition of non-refundable upfront fees if they have continuing performance obligations without which the technology licensed has no utility to the licensee. If they have performance obligations through research and development services that are required because their know-how and expertise related to the technology is proprietary to us, or can only be performed by them, then such up-front fees are deferred and recognized over the period of the performance obligations. The Company bases the estimate of the period of performance on factors in the contract. Actual time frames could vary and could result in material changes to their results of operations. |
|
Funded Research and Development— Revenue from research and development services is recognized during the period in which the services are performed and is based upon the number of full-time-equivalent personnel working on the specific project at the agreed-upon rate. This revenue approximates the cost incurred. Reimbursements from collaborative partners for agreed-upon direct costs including direct materials and outsourced, or subcontracted, pre-clinical studies are classified as revenue and recognized in the period the reimbursable expenses are incurred. Payments received in advance are recorded as deferred revenue until the research and development services are performed or costs are incurred. |
|
Milestones—Substantive milestone payments are considered to be performance bonuses that are recognized upon achievement of the milestone only if all of the following conditions are met: the milestone payments are non-refundable; achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement; substantive effort is involved in achieving the milestone; the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement of the milestone; and a reasonable amount of time passes between the up-front license payment and the first milestone payment as well as between each subsequent milestone payment. If any of these conditions are not met, the milestone payments are deferred and recognized as revenue over the term of the arrangement as we complete our performance obligations. |
|
Royalties—The Company recognizes royalty revenues from licensed products upon the sale of the related products. |
|
Product Sales—The Company sells NeutroPhase, CelleRx and i-Lid Cleanser through a limited number of distributors. We generally record product sales upon shipment to distributors at which time title and risk of loss pass to the distributors. |
Cost of Goods Sold [Policy Text Block] | ' |
Cost of Goods Sold |
|
Cost of goods sold includes third party manufacturing costs, shipping costs, cost of samples and other costs of goods sold. Cost of goods sold also includes any necessary allowances for excess inventory that may expire and become unsalable. We did not record an allowance for excess inventory as of December 31, 2013. |
Research and Development Expense, Policy [Policy Text Block] | ' |
Research and Development Costs |
|
The Company charges research and development costs to expense as incurred. These costs include salaries and benefits for research and development personnel, costs associated with clinical trials managed by contract research organizations, and other costs associated with research, development and regulatory activities. They use external service providers to conduct clinical trials, to manufacture supplies of product candidates and to provide various other research and development-related products and services. Research and development expenses under the collaborative agreements approximate the revenue recognized, excluding milestone and upfront payments received under such arrangements. |
Legal Costs, Policy [Policy Text Block] | ' |
Patent Costs |
|
Patent costs, including legal expenses, are expensed in the period in which they are incurred. Patent expenses are included in general and administrative expenses in the statements of operations. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
Stock-Based Compensation |
|
The Company accounts for stock-based compensation under the provisions of ASC 718, Compensation-Stock Compensation. Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date for all stock-based awards to employees and directors and is recognized as expense over the requisite service period, which is generally the vesting period. Non-employee stock-based compensation charges are amortized over the vesting period on a straight-line basis. For stock options granted, the fair value of the stock options is estimated using a Black-Scholes-Merton option pricing model. See Note 10 for further information regarding stock-based compensation expense and the assumptions used in estimating that expense. |
Income Tax, Policy [Policy Text Block] | ' |
Income Taxes |
|
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion or the entire deferred tax asset will not be recognized. |
Assets or Liabilities that Relate to Transferor's Continuing Involvement in Securitized or Asset-backed Financing Assets, Policy [Policy Text Block] | ' |
Common Stock Warrant Liabilities |
|
For warrants where there is a deemed possibility that the Company may have to settle the warrants in cash, the Company records the fair value of the issued warrants as a liability at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statements of operations and comprehensive loss. The fair values of these warrants have been determined using the Binomial Lattice (“Lattice”) valuation model, and the changes in the fair value are recorded in the consolidated statements of operations and comprehensive loss. The Lattice model provides for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity. These values are subject to a significant degree of judgment on the part of the Company. |
Earnings Per Share, Policy [Policy Text Block] | ' |
Net Income (Loss) per Share |
|
The Company computes net income (loss) per share by presenting both basic and diluted earnings (loss) per share (EPS). |
|
Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options and warrants, using the treasury stock method, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Potentially dilutive common share equivalents are excluded from the diluted EPS computation in net loss periods since their effect would be anti-dilutive. During 2013, 2012 and 2011, there is no difference between basic and diluted net loss per share due to the Company’s net losses. The following table sets forth the reconciliation between basic EPS and diluted EPS: |
|
| | Year Ended December 31, | |
(in thousands, except per share data) | | 2013 | | | 2012 | | | 2011 | |
| | | | | | | | | | | | |
Net loss | | $ | (16,042 | ) | | $ | (7,027 | ) | | $ | (5,085 | ) |
| | | | | | | | | | | | |
Basic shares | | | 38,183 | | | | 29,448 | | | | 25,773 | |
Add: shares issued upon assumed exercise of stock options and warrants | | | — | | | | — | | | | — | |
Diluted shares | | | 38,183 | | | | 29,448 | | | | 25,773 | |
| | | | | | | | | | | | |
Basic EPS | | $ | (0.42 | ) | | $ | (0.24 | ) | | $ | (0.20 | ) |
Diluted EPS | | $ | (0.42 | ) | | $ | (0.24 | ) | | $ | (0.20 | ) |
|
The following outstanding stock options and stock warrants were excluded from the diluted EPS computation as their effect would have been anti-dilutive: |
|
| | Year Ended December 31, | |
(in thousands) | | 2013 | | | 2012 | | | 2011 | |
Stock options | | | 7,164 | | | | 6,222 | | | | 5,299 | |
Stock warrants | | | 4,765 | | | | 11,190 | | | | 4,863 | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recent Accounting Pronouncements |
|
We do not believe there are any new or pending pronouncements that will materially impact our financial position or results of operations. |