Ocular Therapeutix (OCUL) 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 01, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	OCUL
Entity Registrant Name	Ocular Therapeutix, Inc.
Entity Central Index Key	1,393,434
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,028,184

Balance Sheets

Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 54,682	$ 32,936
Marketable securities	25,697	35,209
Accounts receivable	244	250
Inventory	96	113
Prepaid expenses and other current assets	2,557	1,390
Total current assets	83,276	69,898
Property and equipment, net	5,693	3,313
Restricted cash	1,728	1,728
Total assets	90,697	74,939
Current liabilities:
Accounts payable	3,754	2,116
Accrued expenses and deferred rent	4,005	4,635
Notes payable, net of discount, current	897	1,549
Total current liabilities	8,656	8,300
Deferred rent, long-term	1,315	537
Notes payable, net of discount, long-term	16,821	14,094
Total liabilities	26,792	22,931
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized at March 31, 2017 and December 31, 2016; no shares issued or outstanding at March 31, 2017 and December 31, 2016
Common stock, $0.0001 par value; 100,000,000 shares authorized at March 31, 2017 and December 31, 2016; 28,934,454 and 25,024,100 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	3	3
Additional paid-in capital	253,813	225,889
Accumulated deficit	(189,902)	(173,879)
Accumulated other comprehensive loss	(9)	(5)
Total stockholders' equity	63,905	52,008
Total liabilities and stockholders' equity	$ 90,697	$ 74,939

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Balance Sheets
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	28,934,454	25,024,100
Common stock, shares outstanding	28,934,454	25,024,100

Statements of Operations and Co

Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue:
Product revenue	$ 475	$ 416
Collaboration revenue		42
Total revenue	475	458
Costs and operating expenses:
Cost of product revenue	115	99
Research and development	6,729	7,073
Selling and marketing	6,027	1,389
General and administrative	3,276	2,406
Total costs and operating expenses	16,147	10,967
Loss from operations	(15,672)	(10,509)
Other income (expense):
Interest income	92	87
Interest expense	(443)	(418)
Total other expense, net	(351)	(331)
Net loss	$ (16,023)	$ (10,840)
Net loss per share, basic and diluted	$ (0.58)	$ (0.44)
Weighted average common shares outstanding, basic and diluted	27,643,746	24,751,682
Comprehensive loss:
Net loss	$ (16,023)	$ (10,840)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities	(4)	68
Total other comprehensive income (loss)	(4)	68
Total comprehensive loss	$ (16,027)	$ (10,772)

Statements of Cash Flows

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (16,023)	$ (10,840)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation expense	1,705	1,349
Non-cash interest expense	110	35
Depreciation and amortization expense	261	205
Purchase of premium on marketable securities	(3)
Amortization of premium on marketable securities	11	104
Changes in operating assets and liabilities:
Accounts receivable	6	(34)
Prepaid expenses and other current assets	(1,167)	305
Inventory	17	7
Accounts payable	659	79
Accrued expenses and deferred rent	(153)	(424)
Deferred revenue		(42)
Net cash used in operating activities	(14,577)	(9,256)
Cash flows from investing activities:
Purchases of property and equipment	(1,654)	(127)
Purchases of marketable securities	(3,000)
Maturities of investments	12,500	25,000
Net cash provided by investing activities	7,846	24,873
Cash flows from financing activities:
Proceeds from issuance of notes payable	3,700
Proceeds from exercise of stock options	2	5
Proceeds from issuance of common stock offering, net	26,272
Payments of insurance costs financed by a third-party	(197)	(194)
Repayment of notes payable	(1,300)
Net cash provided by (used in) financing activities	28,477	(189)
Net increase in cash and cash equivalents	21,746	15,428
Cash and cash equivalents at beginning of period	32,936	30,784
Cash and cash equivalents at end of period	54,682	46,212
Supplemental disclosure of non-cash investing and financing activities:
Additions to property and equipment included in accounts payable at balance sheet dates	987	$ 109
Public offering costs included in accounts payable and accrued expenses at balance sheet dates	$ 55

Nature of the Business and Basi

Nature of the Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2017
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	Ocular Therapeutix, Inc. Notes to the Financial Statements (Amounts in thousands, except share and per share data) (Unaudited) 1. Nature of the Business and Basis of Presentation Ocular Therapeutix, Inc. (the “Company”) was incorporated on September 12, 2006 under the laws of the State of Delaware. The Company is a biopharmaceutical company focused on the development and commercialization of innovative therapies for diseases and conditions of the eye using its proprietary hydrogel platform technology. The Company’s bioresorbable hydrogel-based product candidates are designed to provide sustained delivery of therapeutic agents to the eye. Since inception, the Company’s operations have been primarily focused on organizing and staffing the Company, acquiring rights to intellectual property, business planning, raising capital, developing its technology, identifying potential product candidates, undertaking preclinical studies and clinical trials, manufacturing initial quantities of its products and product candidates and building the initial sales and marketing infrastructure for the commercialization of the Company’s approved product and product candidates. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations, regulatory approval, uncertainty of market acceptance of products, securing reimbursement and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. As of March 31, 2017, the Company’s lead product candidates were in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval and adequate reimbursement or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants. The Company may not be able to generate significant revenue from sales of any product for several years, if at all. Accordingly, the Company will need to obtain additional capital to finance its operations, including to support the planned commercial launch of DEXTENZA, subject to receiving FDA approval. The Company has incurred losses and negative cash flows from operations since its inception. As of March 31, 2017, the Company had an accumulated deficit of $189,902. The Company expects to continue to generate operating losses in the foreseeable future. The Company believes that its existing cash and cash equivalents and marketable securities will enable it to fund its operating expenses, debt service obligations and capital expenditure requirements for at least 12 months from the issuance date of these financial statements. The Company will seek additional funding through public or private financings, debt financing and collaboration agreements. The Company has two additional $10,000 tranches of borrowing capacity under its credit facility, which are contingent upon achieving FDA approval and certain sales levels of DEXTENZA, respectively. The inability to access these funds or obtain other funding, as and when needed, would have a negative impact on the Company’s financial condition and ability to pursue its business strategies. If it were unable to access the additional borrowing capacity under the credit facility or obtain other financing, the Company would be forced to delay, reduce or eliminate its research and development programs or any future commercialization efforts or to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to the Company. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Unaudited Interim Financial Information The balance sheet at December 31, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited financial statements as of March 31, 2017 and for the three months ended March 31, 2017 and 2016 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of March 31, 2017 and results of operations and cash flows for the three months ended March 31, 2017 and 2016 have been made. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2017.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, including clinical trials, and the valuation of common stock and stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates. Fair Value Measurements Certain assets and liabilities are carried at fair value under 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s cash equivalents and marketable securities at March 31, 2017 and December 31, 2016, were carried at fair value determined according to the fair value hierarchy described above (see Note 3). The carrying value of accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these assets and liabilities. The carrying value of the Company’s outstanding notes payable (see Note 7) approximates fair value reflecting interest rates currently available to the Company. Marketable Securities The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of other income (expense), net based on the specific identification method. Fair value is determined based on quoted market prices. At March 31, 2017, marketable securities by security type consisted of: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States treasury notes $ 25,706 $ — $ (9) $ 25,697 Total $ 25,706 $ — $ (9) $ 25,697 At December 31, 2016, marketable securities by security type consisted of: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States treasury notes $ 35,216 $ 1 $ (8) $ 35,209 Total $ 35,216 $ 1 $ (8) $ 35,209 At March 31, 2017 and December 31, 2016, marketable securities consisted of investments that mature within one year. Restricted Cash The Company held certificates of deposit totaling $1,728 at March 31, 2017 and December 31, 2016, as security deposits for the lease of the Company’s future and current corporate headquarters. The Company has classified these certificates of deposit as long-term restricted cash on its balance sheet. Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on advancing its bioresorbable hydrogel-based product candidates exclusively for ophthalmology. All tangible assets are held in the United States. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the diluted net income (loss) by the weighted average number of common shares, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, unvested restricted common shares and common stock warrants, as determined using the treasury stock method. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the three months ended March 31, 2017 and 2016. The following common stock equivalents outstanding as of March 31, 2017 and 2016 were excluded from the computation of diluted net loss per share for the three months ended March 31, 2017 and 2016, because they had an anti-dilutive impact: As of March 31, 2017 2016 Options to purchase common stock 4,207,234 2,958,669 Warrants for the purchase of common stock 18,939 18,939 4,226,173 2,977,608 Recently Issued and Adopted Accounting Pronouncements Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The amendments in this update will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted ASU 2016-09 on January 1, 2017 and to estimate forfeitures at each period and the adoption did not have a material impact to the financial statements . Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date which amends ASU 2014-09. As a result, the standard effective date will be in the first quarter of 2018 with early adoption permitted in the first quarter of 2017. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”); ASU 2016-10, “Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing” (“ASU 2016-10”); ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”); and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which are intended to provide additional guidance and clarity to ASU 2014-09. The Company must adopt ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 along with ASU 2014-09 (collectively, the “New Revenue Standards”). The New Revenue Standards may be applied using one of two retrospective application methods: (1) a full retrospective approach for all periods presented, or (2) a modified retrospective approach that presents a cumulative effect as of the adoption date and additional required disclosures. The Company expects to adopt the New Revenue Standards in the first quarter of 2018 using the modified retrospective approach and is in the process of completing its initial analysis identifying the revenue that will be impacted by the adoption of this new standard and the impact to its financial statements and footnote disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 on its statement of cash flows. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash” (ASU 2016-18). ASU 2016-18 requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of- period total amounts shown on the statement of cash flows. The effective date will be the first quarter of fiscal year 2018. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures .

Fair Value of Financial Assets

Fair Value of Financial Assets and Liabilities	3 Months Ended
	Mar. 31, 2017
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities	3. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 and indicate the level of the fair value hierarchy utilized to determine such fair value: Fair Value Measurements as of March 31, 2017 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ — $ 53,011 $ — $ 53,011 Marketable securities: United States treasury notes — 25,697 — 25,697 Total $ — $ 78,708 $ — $ 78,708 Fair Value Measurements as of December 31, 2016 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ — $ 20,734 $ — $ 20,734 Agency bonds — 8,994 — 8,994 Marketable securities: United States treasury notes — 35,209 — 35,209 Total $ — $ 64,937 $ — $ 64,937

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2017
Accrued Expenses
Accrued Expenses	4. Accrued Expenses Accrued expenses consisted of the following: March 31, December 31, 2017 2016 Accrued payroll and related expenses $ 1,047 $ 2,146 Accrued professional fees 1,601 1,018 Accrued research and development expenses 520 360 Accrued insurance 394 591 Accrued other 443 520 $ 4,005 $ 4,635 The Company’s accrued insurance represents outstanding, unpaid premiums for the period from October 2016 through September 2017 which the Company financed with a third party.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Taxes
Income Taxes	5. Income Taxes The Company did not provide for any income taxes in its statement of operations for the three month periods ended March 31, 2017 or 2016. The Company has provided a valuation allowance for the full amount of its net deferred tax assets because, at March 31, 2017 and December 31, 2016, it was more likely than not that any future benefit from deductible temporary differences and net operating loss and tax credit carryforwards would not be realized. The Company has not recorded any amounts for unrecognized tax benefits as of March 31, 2017 or December 31, 2016. As of March 31, 2017 and December 31, 2016, the Company had no accrued interest or tax penalties recorded related to income taxes. The Company’s income tax return reporting periods since December 31, 2013 are open to income tax audit examination by the federal and state tax authorities. In addition, because the Company has net operating loss carryforwards, the Internal Revenue Service is permitted to audit earlier years and propose adjustments up to the amount of net operating losses generated in those years.

Collaboration and Feasibility A

Collaboration and Feasibility Agreements	3 Months Ended
	Mar. 31, 2017
Collaboration and Feasibility Agreements
Collaboration and Feasibility Agreements	6. Collaboration and Feasibility Agreements In October 2016, the Company entered into a Collaboration, Option and License Agreement (the “Collaboration Agreement”) with Regeneron Pharmaceuticals, Inc. (“Regeneron”) for the development and potential commercialization of products containing the Company’s extended-delivery hydrogel depot in combination with Regeneron’s large molecule VEGF-targeting compounds for the treatment of retinal diseases. The Collaboration Agreement does not cover the development of any products that deliver small molecule drugs, including tyrosine kinase inhibitors, or TKIs, or deliver large molecule drugs other than those that target VEGF proteins. Under the terms of the Collaboration Agreement, the Company and Regeneron have agreed to conduct a joint research program with the aim of developing an extended-delivery formulation of aflibercept, currently marketed under the tradename Eylea, that is suitable for advancement into clinical development. The Company has granted Regeneron an option (the “Option”) to enter into an exclusive, worldwide license to develop and commercialize products containing the Company’s extended-delivery hydrogel depot in combination with Regeneron’s large molecule VEGF-targeting compounds (“Licensed Products”). If the Option is exercised, Regeneron will conduct further preclinical development and an initial clinical trial under a collaboration plan. The Company is obligated to reimburse Regeneron for certain development costs incurred by Regeneron under the collaboration plan during the period through the completion of the initial clinical trial, subject to a cap of $25,000, which cap may be increased by up to $5,000 under certain circumstances. If Regeneron elects to proceed with further development following the completion of the collaboration plan, it will be solely responsible for conducting and funding further development and commercialization of product candidates. If the Option is exercised, Regeneron is required to use commercially reasonable efforts to research, develop and commercialize at least one Licensed Product. Such efforts shall include initiating the dosing phase of a subsequent clinical trial within specified time periods following the completion of the first-in-human clinical trial or the initiation of preclinical toxicology studies, subject to certain extensions. Under the terms of the Collaboration Agreement, Regeneron has agreed to pay the Company $10,000 upon the exercise of the Option. The Company is also eligible to receive up to $145,000 per Licensed Product upon the achievement of specified development and regulatory milestones, $100,000 per Licensed Product upon first commercial sale of such Licensed Product and up to $50,000 based on the achievement of specified sales milestones for all Licensed Products. In addition, the Company is entitled to tiered, escalating royalties, in a range from a high-single digit to a low-to-mid teen percentage of net sales of Licensed Products. The Company had a feasibility agreement with a biotechnology company which it entered into in 2014. Under this agreement, the biotechnology company would pay up to $700, of which $250 was a non-refundable payment due upon contract execution and $450 was due upon the achievement of certain milestones. The Company recognized the total expected payments under the contract which included only the non-refundable payments on a straight-line basis over the estimated performance period. When a contingent milestone payment was earned, the additional consideration to be received was added to the total expected payments under the contract then recognized over the estimated performance period. In January 2015, the first milestone under the feasibility agreement was achieved triggering a non-refundable payment due of $250 such that the total non-refundable payments that were recognized over the estimated performance period totaled $500. This agreement was terminated in the second quarter of 2016 and the Company does not have any further obligations. The Company recognized no revenue and $42 of revenue for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, respectively, the Company had no deferred revenue and no accounts receivable to this agreement.

Notes Payable

Notes Payable	3 Months Ended
	Mar. 31, 2017
Notes Payable
Notes Payable	7. Notes Payable The Company has outstanding borrowings under a credit and security agreement entered into in 2014 and amended in December 2015, June 2016, and March 2017 (the “Amended Credit Facility”) totaling $18,000, which is collateralized by substantially all of the Company’s personal property, other than its intellectual property. The $18,000 of borrowings were drawn at the closing of the March 2017 amendment, which was used primarily to pay-off outstanding balances on the facility as of the amendment date of $14,300, resulting in net proceeds to the Company of $3,700. The Amended Credit Facility also includes options on two additional tranches of $10,000, each contingent upon the achievement by the Company of regulatory and commercial milestones related to DEXTENZA, providing for a total commitment under the Amended Credit Facility of $38,000. The Company is obligated to make interest-only payments under the Amended Credit Facility until February 1, 2018, and thereafter is required to make monthly principal and interest payments through December 1, 2020. The interest-only period may also be extended based on the Company’s achievement of certain milestones. Amounts borrowed under the Amended Credit Facility are at LIBOR base rate, subject to 1.00% floor, plus 7.25% with an indicative interest rate of 8.25% as of the amendment date. In addition, a final payment equal to 3.5% of amounts drawn under the Amended Credit Facility is due upon the maturity date of December 1, 2020. There are no financial covenants associated with the Amended Credit Facility; however, there are negative covenants restricting the Company’s activities, including limitations on dispositions, mergers or acquisitions; encumbering its intellectual property; incurring indebtedness or liens; paying dividends; making certain investments; and engaging in certain other business transactions. The obligations under the Amended Credit Facility are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in the Company’s business, operations or financial or other condition. The Company accounted for the amendment of the Amended Credit Facility as a modification in accordance with the guidance in ASC 470-50, Debt. Amounts paid to the lenders were recorded as debt discount and a new effective interest rate was established. The effective annual interest rate of the outstanding debt under the Amended Credit Facility is 10.5%. As of March 31, 2017, the annual repayment requirements for the Amended Credit Facility, inclusive of the final payment of $630 due at expiration, were as follows: Interest and Final Year Ending December 31, Principal Payment Total 2017 — 1,110 1,110 2018 5,658 1,308 6,966 2019 6,171 796 6,967 2020 6,171 911 7,082 $ 18,000 $ 4,125 $ 22,125

Common Stock and Preferred Stoc

Common Stock and Preferred Stock	3 Months Ended
	Mar. 31, 2017
Common Stock and Preferred Stock
Common Stock and Preferred Stock	8. Common Stock and Preferred Stock In November 2016, the Company entered into the 2016 ATM Agreement with Cantor Fitzgerald & Co., under which the Company may offer and sell its common stock having aggregate proceeds of up to $40,000 from time to time. During the fourth quarter of 2016, the Company sold 102,077 shares of common stock under the 2016 ATM Agreement, resulting in net proceeds of approximately $600 after underwriting discounts, commission and other offering expenses. In January 2017, the Company sold 161,341 shares of common stock under the 2016 ATM Agreement, resulting in net proceeds of approximately $1,395 after underwriting discounts and commissions. In March 2017, the Company sold 177,068 shares of common stock under the 2016 ATM Agreement, resulting in net proceeds of approximately $1,561 after underwriting discounts, commissions and expenses. In April 2017, the Company sold 93,730 shares of common stock under the 2016 ATM Agreement, resulting in net proceeds of approximately $855 after underwriting discounts and commissions. In January 2017, the Company completed a follow-on offering of its common stock at a public offering price of $7.00 per share. The offering consisted of 3,571,429 shares of common stock sold by the Company. The Company received net proceeds from the follow-on offering of $23,261 after deducting underwriting discounts, commissions and expenses.

Warrants

Warrants	3 Months Ended
	Mar. 31, 2017
Warrants
Warrants	9. Warrants Warrants for the purchase of 18,939 shares of common stock remain outstanding at March 31, 2017 at a weighted average exercise price of $7.92 per share and an expiration date of April 17, 2021. No warrants were exercised during the three months ended March 31, 2017 and March 31, 2016.

Stock-Based Awards

Stock-Based Awards	3 Months Ended
	Mar. 31, 2017
Stock-Based Awards
Stock-Based Awards	10. Stock-Based Awards 2014 Stock Incentive Plan The 2014 Stock Incentive Plan (the “2014 Plan”) provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The number of shares of common stock that may be issued under the 2014 Plan is subject to increase on the first day of each fiscal year, beginning on January 1, 2015 and ending on December 31, 2024 in an amount equal to the lesser of a pre-determined formula or as determined by the Company’s board of directors. On January 1, 2017, the number of shares available for issuance under the 2014 Plan increased by 1,000,964. As of March 31, 2017, 1,230,777 shares remained available for issuance under the 2014 Plan. 2014 Employee Stock Purchase Plan The Company has a 2014 Employee Stock Purchase Plan (the “ESPP”). The number of shares of common stock that may be issued under the ESPP will automatically increase on the first day of each fiscal year, commencing on January 1, 2015 and ending on December 31, 2024 in an amount equal to the lesser of a pre-determined formula or as determined by the Company’s board of directors. On January 1, 2017, the number of shares available for issuance under the 2014 Plan increased by 125,121. During the three months ended March 31, 2017, no shares of common stock were issued. As of March 31, 2017, 388,336 shares remained available for issuance under the ESPP. Stock-based Compensation The Company recorded stock-based compensation expense related to stock options and restricted common stock in the following expense categories of its statements of operations: Three Months Ended March 31, 2017 2016 Research and development $ 532 $ 453 Selling and marketing 206 107 General and administrative 967 789 $ 1,705 $ 1,349 As of March 31, 2017, the Company had an aggregate of $13,994 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.64 years. As of March 31, 2017, there were outstanding unvested service-based stock options held by nonemployees for the purchase of 1,933 shares of common stock.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies.
Commitments and Contingencies	11. Commitments and Contingencies Leases The Company leases office, laboratory and manufacturing space in Bedford, Massachusetts and certain office equipment under non-cancelable operating leases that expire in June 2017, June 2018 and July 2027. Future minimum lease payments as of March 31, 2017 for its operating leases are as follows: Year Ending December 31, 2017 $ 955 2018 1,461 2019 1,235 2020 1,270 2021 1,305 Thereafter 7,940 Total $ 14,166 During the three months ended March 31, 2017 and 2016, the Company recognized $496 and $191, respectively, of rental expense, related to its office, laboratory and manufacturing space and office equipment. In June 2016, the Company entered into a lease agreement for approximately 70,712 square feet of general office, research and development and manufacturing space in Bedford, Massachusetts. The lease term commenced on February 1, 2017 and will expire on July 31, 2027. No base rent will be due under the lease until August 1, 2017. The initial annual base rent is approximately $1,200 and will increase annually beginning on February 1 of each year. The Company is obligated to pay all real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, and replacement and management of the new leased premises. The Company posted a customary letter of credit in the amount of approximately $1,500 as a security deposit. The Company intends to relocate its corporate headquarters to the new leased premises during 2017. The lease agreement allows for a landlord provided construction allowance not to exceed approximately $2,800 to be applied to the total construction costs of the new leased premises. The construction allowance must be used on or before December 31, 2017, or it will be deemed forfeited with no further obligation by the landlord of the new leased premises. As of March 31, 2017, the Company had $2,485 in construction in process related to the buildout and has billed the landlord for $688. Build out costs being reimbursed under the tenant improvement allowance have been recorded as deferred rent and will be amortized as a deduction to rent expense over the lease term. Intellectual Property Licenses The Company has a license agreement with Incept, LLC (“Incept”) (Note 12) to use and develop certain patent rights (the “Incept License”). Under the Incept License, as amended and restated, the Company was granted a worldwide, perpetual, exclusive license to develop and commercialize products that are delivered to or around the human eye for diagnostic, therapeutic or prophylactic purposes relating to ophthalmic diseases or conditions. The Company is obligated to pay low single-digit royalties on net sales of commercial products developed using the licensed technology, commencing with the date of the first commercial sale of such products and until the expiration of the last to expire of the patents covered by the license. Any of the Company’s sublicensees also will be obligated to pay Incept a royalty equal to a low single-digit percentage of net sales made by it and will be bound by the terms of the agreement to the same extent as the Company. The Company is obligated to reimburse Incept for its share of the reasonable fees and costs incurred by Incept in connection with the prosecution of the patent applications licensed to the Company under the Incept License. Through March 31, 2017, royalties paid under this agreement related to product sales were $111 and have been charged to cost of product revenue. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management team that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its financial statements as of December 31, 2016 or March 31, 2017. Purchase Commitments Purchase commitments represent non-cancelable contractual commitments associated with certain clinical trial activities within the Company’s clinical research organization. Manufacturing Commitments Manufacturing contracts generally provide for termination on notice, and therefore are cancelable contracts but are contracts that the Company is likely to continue, regardless of the fact that they are cancelable. Collaboration Agreement In October 2016, the Company entered into a Collaboration Agreement with Regeneron (Note 6). If the Option to enter into an exclusive worldwide license is exercised, Regeneron will conduct further preclinical development and an initial clinical trial under a collaboration plan. The Company is obligated to reimburse Regeneron for certain development costs incurred by Regeneron under the collaboration plan during the period through the completion of the initial clinical trial, subject to a cap of $25,000, which cap may be increased by up to $5,000 under certain circumstances, the timing of such payments are not known. If Regeneron elects to proceed with further development following the completion of the collaboration plan, it will be solely responsible for conducting and funding further development and commercialization of product candidates. If the Option is exercised, Regeneron is required to use commercially reasonable efforts to research, develop and commercialize at least one Licensed Product. Such efforts shall include initiating the dosing phase of a subsequent clinical trial within specified time periods following the completion of the first-in-human clinical trial or the initiation of preclinical toxicology studies, subject to certain extensions. Through March 31, 2017, the Option has not been exercised and no payments have been made to Regeneron.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions
Related Party Transactions	12. Related Party Transactions The Company has a license agreement with Incept to use and develop certain patent rights that it entered into in 2007 (see Note 11). Incept and certain owners of Incept are shareholders of the Company. In addition, certain employees of the Company are shareholders of Incept. The Company’s President and Chief Executive Officer (“CEO”) is a general partner of Incept. In April 2014, the Company granted 28,437 shares of restricted common stock to its CEO, which grant was in lieu of $250 of the CEO’s 2015 base salary. During 2015, the Company identified that it did not appropriately adjust the base salary to reflect this reduction. As a result, the Company paid the full base salary for 2015. Upon discovery of the error, the CEO promptly repaid the full $250 to the Company on April 1, 2016. The Company recorded a reduction to payroll expense in the first quarter of 2016. The effect of this error on the statement of operations was considered immaterial for all related periods. In March 2016, the Company entered into a Master Services Agreement with Axtria, Inc. (“Axtria”) in which Axtria will provide certain sales and marketing analytics to the Company. In February 2017, the Company entered into statement of work totaling approximately $1,400 in which Axtria will provide data warehouse implementation, operations and maintenance support services to the Company. Jaswinder Chadha, co-founder and CEO of Axtria, is also a member of the Company’s Board of Directors and a cousin to the Company’s President and CEO. Through March 31, 2017, payments paid to Axtria under this statement of work were $388. In the three months ended March 31, 2017 and 2016, the Company has expensed to sales and marketing under this statement of work $577 and $1 under a previous statement of work for sales and marketing analytics, respectively. As of March 31, 2017 and 2016, there are were no amounts due in accounts payable to Axtria. Since 2014, the Company has engaged Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) to provide legal services to

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual of research and development expenses, including clinical trials, and the valuation of common stock and stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates.
Fair Value Measurements	Fair Value Measurements Certain assets and liabilities are carried at fair value under 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s cash equivalents and marketable securities at March 31, 2017 and December 31, 2016, were carried at fair value determined according to the fair value hierarchy described above (see Note 3). The carrying value of accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these assets and liabilities. The carrying value of the Company’s outstanding notes payable (see Note 7) approximates fair value reflecting interest rates currently available to the Company.
Marketable Securities	Marketable Securities The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of other income (expense), net based on the specific identification method. Fair value is determined based on quoted market prices. At March 31, 2017, marketable securities by security type consisted of: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States treasury notes $ 25,706 $ — $ (9) $ 25,697 Total $ 25,706 $ — $ (9) $ 25,697 At December 31, 2016, marketable securities by security type consisted of: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States treasury notes $ 35,216 $ 1 $ (8) $ 35,209 Total $ 35,216 $ 1 $ (8) $ 35,209 At March 31, 2017 and December 31, 2016, marketable securities consisted of investments that mature within one year.
Restricted Cash	Restricted Cash The Company held certificates of deposit totaling $1,728 at March 31, 2017 and December 31, 2016, as security deposits for the lease of the Company’s future and current corporate headquarters. The Company has classified these certificates of deposit as long-term restricted cash on its balance sheet.
Segment Data	Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on advancing its bioresorbable hydrogel-based product candidates exclusively for ophthalmology. All tangible assets are held in the United States.
Comprehensive Loss	Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders.
Net Income (Loss) Per Share	Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the diluted net income (loss) by the weighted average number of common shares, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, unvested restricted common shares and common stock warrants, as determined using the treasury stock method. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the three months ended March 31, 2017 and 2016. The following common stock equivalents outstanding as of March 31, 2017 and 2016 were excluded from the computation of diluted net loss per share for the three months ended March 31, 2017 and 2016, because they had an anti-dilutive impact: As of March 31, 2017 2016 Options to purchase common stock 4,207,234 2,958,669 Warrants for the purchase of common stock 18,939 18,939 4,226,173 2,977,608
Recently Issued and Adopted Accounting Pronouncements	Recently Issued and Adopted Accounting Pronouncements Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The amendments in this update will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted ASU 2016-09 on January 1, 2017 and to estimate forfeitures at each period and the adoption did not have a material impact to the financial statements . Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date which amends ASU 2014-09. As a result, the standard effective date will be in the first quarter of 2018 with early adoption permitted in the first quarter of 2017. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”); ASU 2016-10, “Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing” (“ASU 2016-10”); ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”); and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which are intended to provide additional guidance and clarity to ASU 2014-09. The Company must adopt ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 along with ASU 2014-09 (collectively, the “New Revenue Standards”). The New Revenue Standards may be applied using one of two retrospective application methods: (1) a full retrospective approach for all periods presented, or (2) a modified retrospective approach that presents a cumulative effect as of the adoption date and additional required disclosures. The Company expects to adopt the New Revenue Standards in the first quarter of 2018 using the modified retrospective approach and is in the process of completing its initial analysis identifying the revenue that will be impacted by the adoption of this new standard and the impact to its financial statements and footnote disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 on its statement of cash flows. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash” (ASU 2016-18). ASU 2016-18 requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of- period total amounts shown on the statement of cash flows. The effective date will be the first quarter of fiscal year 2018. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures .

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Summary of Marketable Securities by Security Type	At March 31, 2017, marketable securities by security type consisted of: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States treasury notes $ 25,706 $ — $ (9) $ 25,697 Total $ 25,706 $ — $ (9) $ 25,697 At December 31, 2016, marketable securities by security type consisted of: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value United States treasury notes $ 35,216 $ 1 $ (8) $ 35,209 Total $ 35,216 $ 1 $ (8) $ 35,209
Schedule of Antidilutive Securities, Excluded from Computation of Diluted Net Loss per Share	As of March 31, 2017 2016 Options to purchase common stock 4,207,234 2,958,669 Warrants for the purchase of common stock 18,939 18,939 4,226,173 2,977,608

Fair Value of Financial Asset20

Fair Value of Financial Assets and Liabilities (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value of Financial Assets and Liabilities
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis	Fair Value Measurements as of March 31, 2017 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ — $ 53,011 $ — $ 53,011 Marketable securities: United States treasury notes — 25,697 — 25,697 Total $ — $ 78,708 $ — $ 78,708 Fair Value Measurements as of December 31, 2016 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ — $ 20,734 $ — $ 20,734 Agency bonds — 8,994 — 8,994 Marketable securities: United States treasury notes — 35,209 — 35,209 Total $ — $ 64,937 $ — $ 64,937

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2017
Accrued Expenses
Schedule of Accrued Expenses	March 31, December 31, 2017 2016 Accrued payroll and related expenses $ 1,047 $ 2,146 Accrued professional fees 1,601 1,018 Accrued research and development expenses 520 360 Accrued insurance 394 591 Accrued other 443 520 $ 4,005 $ 4,635

Notes Payable (Tables)

Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2017
Notes Payable
Schedule of Annual Repayment Requirements for Credit Facility	As of March 31, 2017, the annual repayment requirements for the Amended Credit Facility, inclusive of the final payment of $630 due at expiration, were as follows: Interest and Final Year Ending December 31, Principal Payment Total 2017 — 1,110 1,110 2018 5,658 1,308 6,966 2019 6,171 796 6,967 2020 6,171 911 7,082 $ 18,000 $ 4,125 $ 22,125

Stock-Based Awards (Tables)

Stock-Based Awards (Tables)	3 Months Ended
	Mar. 31, 2017
Stock-Based Awards
Schedule of Stock-Based Compensation Expense Related to Stock Options and Restricted Common Stock	Three Months Ended March 31, 2017 2016 Research and development $ 532 $ 453 Selling and marketing 206 107 General and administrative 967 789 $ 1,705 $ 1,349

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies.
Summary of Future Minimum Lease Payments for Operating Leases	Year Ending December 31, 2017 $ 955 2018 1,461 2019 1,235 2020 1,270 2021 1,305 Thereafter 7,940 Total $ 14,166

Nature of the Business and Ba25

Nature of the Business and Basis of Presentation - Nature of Business (Details) $ in Thousands	Mar. 31, 2017USD ($)tranche	Dec. 31, 2016USD ($)
Nature of Business
Accumulated deficit	$ 189,902	$ 173,879
Minimum time period from the issuance date of the financial statements, Company believes it will be able to fund operations, debt service and capital requirements	12 months
Amended Credit Facility
Nature of Business
Number of tranches | tranche	2
Tranche one, capacity available under debt facility contingent on FDA approval and achievement of certain sales levels of DEXTENZA	$ 10,000
Tranche two, capacity available under debt facility contingent on FDA approval and achievement of certain sales levels of DEXTENZA	$ 10,000

Summary of Significant Accoun26

Summary of Significant Accounting Policies - Summary of Marketable Securities by Security Type (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Marketable Securities
Amortized Cost	$ 25,706	$ 35,216
Gross Unrealized Gains		1
Gross Unrealized Losses	(9)	(8)
Estimated Fair Value	$ 25,697	$ 35,209
Maturity period for marketable securities classified as available-for-sale	1 year	1 year
United States Treasury Notes
Marketable Securities
Amortized Cost	$ 25,706	$ 35,216
Gross Unrealized Gains		1
Gross Unrealized Losses	(9)	(8)
Estimated Fair Value	$ 25,697	$ 35,209

Summary of Significant Accoun27

Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Restricted Cash
Certificate of deposit	$ 1,728	$ 1,728
Certificates of Deposit
Restricted Cash
Certificate of deposit	$ 1,728	$ 1,728

Summary of Significant Accoun28

Summary of Significant Accounting Policies - Schedule of Antidilutive Securities, Excluded from Computation of Diluted Net Loss per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share
Total common stock equivalents	4,226,173	2,977,608
Options to Purchase Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Total common stock equivalents	4,207,234	2,958,669
Warrants for the Purchase of Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Total common stock equivalents	18,939	18,939

Fair Value of Financial Asset29

Fair Value of Financial Assets and Liabilities - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets:
Marketable securities	$ 25,697	$ 35,209
Recurring Basis
Assets:
Total assets at fair value	78,708	64,937
Recurring Basis | United States Treasury Notes
Assets:
Marketable securities	25,697	35,209
Money Market Funds | Recurring Basis
Assets:
Cash equivalents	53,011	20,734
Agency bonds | Recurring Basis
Assets:
Cash equivalents		8,994
Level 2 | Recurring Basis
Assets:
Total assets at fair value	78,708	64,937
Level 2 | Recurring Basis | United States Treasury Notes
Assets:
Marketable securities	25,697	35,209
Level 2 | Money Market Funds | Recurring Basis
Assets:
Cash equivalents	$ 53,011	20,734
Level 2 | Agency bonds | Recurring Basis
Assets:
Cash equivalents		$ 8,994

Accrued Expenses - Schedule of

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accrued Expenses
Accrued payroll and related expenses	$ 1,047	$ 2,146
Accrued professional fees	1,601	1,018
Accrued research and development expenses	520	360
Accrued insurance	394	591
Accrued other	443	520
Total	$ 4,005	$ 4,635

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Income Taxes
Unrecognized tax benefits	$ 0	$ 0
Accrued interest or tax penalties related to income taxes	$ 0	$ 0
Income tax examination, year under examination	2,013

Collaboration and Feasibility32

Collaboration and Feasibility Agreements - Additional Information (Details) - USD ($) $ in Thousands	Oct. 10, 2016	Jan. 31, 2015	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2014	Dec. 31, 2016
Collarboration and Feasibility Agreements
Revenue recognized				$ 42
Feasibility Agreement | Biotechnology
Collarboration and Feasibility Agreements
Potential agreement revenue					$ 700
Non-Refundable revenue entitled to receive on milestone achievement					250
Maximum revenue that could be recognized					$ 450
Payment received on milestone achievement		$ 250
Non-Refundable revenue			$ 500
Revenue recognized			0	$ 42
Deferred revenue			0			$ 0
Accounts receivable			$ 0			$ 0
Collaboration Agreement | Regeneron
Collarboration and Feasibility Agreements
Payment receivable upon exercise of option	$ 10,000
Collaboration Agreement | Regeneron | Maximum
Collarboration and Feasibility Agreements
Reimbursable clinical development costs	25,000
Potential increase in reimbursable clinical development costs	5,000
Potential payment receivable per Licensed Product upon the achievement of specified development and regulatory milestones	145,000
Potential payment receivable per Licensed Product upon first commercial sale of such Licensed Product	100,000
Potential payment receivable due for achievement of specified sales milestones for all Licensed Products	$ 50,000

Notes Payable - Additional Info

Notes Payable - Additional Information (Details) - Amended Credit Facility $ in Thousands	1 Months Ended
	Mar. 31, 2017USD ($)tranche
Notes Payable
Outstanding borrowings under credit facility	$ 18,000
Repayments of debt	14,300
Net proceeds from credit facility	$ 3,700
Number of tranches | tranche	2
Tranche one, amount contingent upon the achievement of regulatory and commercial milestones related to DEXTENZA	$ 10,000
Tranche two, amount contingent upon the achievement of regulatory and commercial milestones related to DEXTENZA	10,000
Borrowing capacity under the agreement	$ 38,000
Final payment due (as a percent)	3.50%
Outstanding borrowings, Effective annual interest rate (as a percent)	10.50%
Additional final payment	$ 630
LIBOR
Notes Payable
Interest rate floor (as a percent)	1.00%
Basis spread (as a percent)	7.25%
Indicative interest rate (as a percent)	8.25%

Notes Payable - Schedule of Ann

Notes Payable - Schedule of Annual Repayment Requirements for Credit Facility (Details) - Amended Credit Facility $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Annual repayment requirements
Credit Facility, Principal	$ 18,000
Credit Facility, Interest and Final Payment	4,125
Credit Facility, Total	22,125
2,017
Annual repayment requirements
Credit Facility, Interest and Final Payment	1,110
Credit Facility, Total	1,110
2,018
Annual repayment requirements
Credit Facility, Principal	5,658
Credit Facility, Interest and Final Payment	1,308
Credit Facility, Total	6,966
2,019
Annual repayment requirements
Credit Facility, Principal	6,171
Credit Facility, Interest and Final Payment	796
Credit Facility, Total	6,967
2,020
Annual repayment requirements
Credit Facility, Principal	6,171
Credit Facility, Interest and Final Payment	911
Credit Facility, Total	$ 7,082

Common Stock and Preferred St35

Common Stock and Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 30, 2016	Apr. 30, 2017	Mar. 31, 2017	Jan. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Common Stock and Preferred Stock
Net proceeds from issuance of common stock					$ 26,272
Follow-on Offering | Common Stock
Common Stock and Preferred Stock
Number of shares issued				3,571,429
Common stock, price per share				$ 7
Net proceeds from issuance of common stock				$ 23,261
2016 ATM Agreement | Common Stock
Common Stock and Preferred Stock
Maximum aggregate proceeds from offering	$ 40,000
Number of shares issued		93,730	177,068	161,341		102,077
Net proceeds from issuance of common stock		$ 855	$ 1,561	$ 1,395		$ 600

Warrants - Additional Informati

Warrants - Additional Information (Details) - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Warrants
Class Of Warrant Or Rights Date From Which Warrants Or Rights Expired	Apr. 17, 2021
Warrants exercised	0	0
Warrants for Common Stock
Warrants
Number of shares callable by warrants	18,939
Warrants for Common Stock | Weighted Average
Warrants
Weighted average exercise price to purchase common stock	$ 7.92

Stock-Based Awards - Additional

Stock-Based Awards - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Jan. 01, 2017
Restricted Common Stock
Net proceeds from issuance of common stock	$ 26,272
Unrecognized stock-based compensation cost	$ 13,994
Weighted average period of unrecognized stock-based compensation cost expected to be recognized	2 years 7 months 21 days
Unvested service-based stock options held by nonemployees	1,933
Common Stock
Restricted Common Stock
Issuance of common stock in connection with employee stock purchase plan, shares	0
2014 Stock Incentive Plan | Common Stock
Restricted Common Stock
Number of shares of common stock available for issuance	1,230,777
Increased number of shares of common stock reserved for issuance		1,000,964
2014 Employee Stock Purchase Plan | Common Stock
Restricted Common Stock
Number of shares of common stock available for issuance	388,336
Increased number of shares of common stock reserved for issuance		125,121

Stock-Based Awards - Schedule o

Stock-Based Awards - Schedule of Stock-Based Compensation Expense Related to Stock Options and Restricted Common Stock (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock-based Compensation
Stock-based compensation expense	$ 1,705	$ 1,349
Research and Development Expense
Stock-based Compensation
Stock-based compensation expense	532	453
Selling and Marketing Expense
Stock-based Compensation
Stock-based compensation expense	206	107
General and Administrative Expense
Stock-based Compensation
Stock-based compensation expense	$ 967	$ 789

Commitments and Contingencies -

Commitments and Contingencies - Summary of Future Minimum Lease Payments for Operating Leases (Details) $ in Thousands	Jun. 17, 2016USD ($)ft²	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)
Leases
Rental expense		$ 496	$ 191
Future minimum lease payments
2,017		955
2,018		1,461
2,019		1,235
2,020		1,270
2,021		1,305
Thereafter		7,940
Total		14,166
Lease Agreement, June 2016, Bedford, Massachusetts
Leases
Area covered under lease | ft²	70,712
Initial annual base rent of leased space	$ 1,200
Letter of credit	1,500
Construction in process		2,485
Construction costs due from landlord		$ 688
Lease Agreement, June 2016, Bedford, Massachusetts | Maximum
Leases
Construction allowance under lease agreement	$ 2,800

Commitments and Contingencies40

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands	Oct. 10, 2016	Mar. 31, 2017	Mar. 31, 2017
Incept
Commitments and Contingencies
Payments for Royalties			$ 111
Regeneron | Collaboration Agreement
Commitments and Contingencies
Payments made under the collaboration agreement		$ 0
Regeneron | Collaboration Agreement | Maximum
Commitments and Contingencies
Reimbursable clinical development costs	$ 25,000
Potential increase in reimbursable clinical development costs	$ 5,000

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands	Apr. 01, 2016	Feb. 28, 2017	Apr. 30, 2014	Mar. 31, 2017	Mar. 31, 2016
Chief Executive Officer
Related Party Transactions
Number of Shares Granted			28,437
Base salary			$ 250
Repayment of base salary	$ 250
WilmerHale
Related Party Transactions
Accounts payable, related party				$ 0	$ 0
Legal Fees | WilmerHale
Related Party Transactions
Expenses incurred				285	196
Axtria | Master Service Agreement | Board of Director
Related Party Transactions
Statement of work amount		$ 1,400
Payments made				388
Accounts payable, related party				0	0
Axtria | Master Service Agreement | Selling and Marketing Expense | Board of Director
Related Party Transactions
Expenses incurred				$ 577	$ 1