Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 12, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Tracon Pharmaceuticals, Inc. | ||
Entity Central Index Key | 1,394,319 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 16,163,559 | ||
Entity Public Float | $ 37.8 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TCON |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 35,710 | $ 41,373 |
Short-term investments | 8,703 | 10,783 |
Prepaid and other assets | 1,235 | 1,150 |
Total current assets | 45,648 | 53,306 |
Property and equipment, net | 82 | 173 |
Other assets | 43 | |
Total assets | 45,730 | 53,522 |
Current liabilities: | ||
Accounts payable and accrued expenses | 6,213 | 8,281 |
Accrued compensation and related expenses | 1,588 | 1,163 |
Current portion of deferred revenue | 1,259 | 3,353 |
Long-term debt, current portion | 333 | 1,378 |
Final payment due bank | 850 | |
Total current liabilities | 10,243 | 14,175 |
Other long-term liabilities | 21 | 905 |
Long-term debt, less current portion | 7,130 | 7,464 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, authorized shares — 10,000,000 at December 31, 2016 and December 31, 2015; issued and outstanding shares—none | ||
Common stock, $0.001 par value; authorized shares — 200,000,000 at December 31, 2016 and December 31, 2015; issued and outstanding shares — 16,084,721 and 12,175,942 at December 31, 2016 and December 31, 2015, respectively | 16 | 12 |
Additional paid-in capital | 113,918 | 89,556 |
Accumulated deficit | (85,598) | (58,590) |
Total stockholders’ equity | 28,336 | 30,978 |
Total liabilities and stockholders’ equity | $ 45,730 | $ 53,522 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 16,084,721 | 12,175,942 |
Common stock, shares outstanding | 16,084,721 | 12,175,942 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Collaboration revenue | $ 3,449 | $ 7,904 | $ 3,598 |
Operating expenses: | |||
Research and development | 21,566 | 25,680 | 7,652 |
General and administrative | 7,859 | 5,691 | 2,125 |
Total operating expenses | 29,425 | 31,371 | 9,777 |
Loss from operations | (25,976) | (23,467) | (6,179) |
Other income (expense): | |||
Interest expense, net | (1,119) | (923) | (667) |
Other income (expense), net | 87 | (20) | 37 |
Total other income (expense) | (1,032) | (943) | (630) |
Net loss | (27,008) | (24,410) | (6,809) |
Accretion to redemption value of redeemable convertible preferred stock | (31) | (297) | |
Net loss attributable to common stockholders | $ (27,008) | $ (24,441) | $ (7,106) |
Net loss per share attributable to common stockholders, basic and diluted | $ (2.13) | $ (2.20) | $ (4.40) |
Weighted-average shares outstanding, basic and diluted | 12,677,910 | 11,115,651 | 1,615,044 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Series B |
Balance at Dec. 31, 2013 | $ 23,929 | ||||
Balance (in Shares) at Dec. 31, 2013 | 12,249,999 | ||||
Increase (Decrease) in Convertible Preferred Stock | |||||
Issuance of redeemable convertible preferred stock | $ 25,654 | ||||
Issuance of redeemable convertible preferred stock (in shares) | 12,400,274 | ||||
Accretion to redemption value of redeemable convertible preferred stock | $ 297 | ||||
Balance at Dec. 31, 2014 | $ 49,880 | ||||
Balance (in Shares) at Dec. 31, 2014 | 24,650,273 | ||||
Balance at Dec. 31, 2013 | $ (25,344) | $ 2 | $ 2,025 | $ (27,371) | |
Balance (in Shares) at Dec. 31, 2013 | 1,614,851 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Accretion to redemption value of redeemable convertible preferred stock | (297) | (297) | |||
Exercise of common stock options (in shares) | 19,003 | ||||
Stock-based compensation expense | 271 | 271 | |||
Vested shares related to repurchase liability | 5 | 5 | |||
Net loss | (6,809) | (6,809) | |||
Balance at Dec. 31, 2014 | (32,174) | $ 2 | 2,004 | (34,180) | |
Balance (in Shares) at Dec. 31, 2014 | 1,633,854 | ||||
Increase (Decrease) in Convertible Preferred Stock | |||||
Conversion of redeemable convertible preferred stock into common stock at initial public offering | $ (49,911) | ||||
Conversion of redeemable convertible preferred stock into common stock at initial public offering (in shares) | (24,650,273) | ||||
Accretion to redemption value of redeemable convertible preferred stock | $ 31 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Initial public offering and private placement of common stock for cash of $10 per share, net of offering costs | 34,954 | $ 4 | 34,950 | ||
Initial public offering and private placement of common stock for cash of $10 per share, net of offering costs (in shares) | 4,100,000 | ||||
Conversion of redeemable convertible preferred stock into common stock at initial public offering | 49,911 | $ 6 | 49,905 | ||
Conversion of redeemable convertible preferred stock into common stock at initial public offering (in shares) | 6,369,567 | ||||
Reclassification of redeemable convertible preferred stock warrant | 311 | 311 | |||
Accretion to redemption value of redeemable convertible preferred stock | (31) | (31) | |||
Issuance of common stock under equity plans | 179 | 179 | |||
Issuance of common stock under equity plans (in shares) | 72,521 | ||||
Stock-based compensation expense | 2,088 | 2,088 | |||
Vested shares related to repurchase liability | 12 | 12 | |||
Issuance of common stock warrants in connection with debt financing | 138 | 138 | |||
Net loss | (24,410) | (24,410) | |||
Balance at Dec. 31, 2015 | 30,978 | $ 12 | 89,556 | (58,590) | |
Balance (in Shares) at Dec. 31, 2015 | 12,175,942 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Issuance of common stock under equity plans | 178 | 178 | |||
Issuance of common stock under equity plans (in shares) | 37,672 | ||||
Stock-based compensation expense | 3,083 | 3,083 | |||
Vested shares related to repurchase liability | 13 | 13 | |||
Issuance of common stock in a public offering, net of offering costs | 16,113 | $ 3 | 16,110 | ||
Issuance of common stock in a public offering, net of offering costs (in shares) | 3,018,750 | ||||
Other issuances of common stock, net | 4,956 | $ 1 | 4,955 | ||
Other issuances of common stock, net (in shares) | 840,022 | ||||
Issuance of common stock in exchange for services | 23 | 23 | |||
Issuance of common stock in exchange for services (in shares) | 12,335 | ||||
Net loss | (27,008) | (27,008) | |||
Balance at Dec. 31, 2016 | $ 28,336 | $ 16 | $ 113,918 | $ (85,598) | |
Balance (in Shares) at Dec. 31, 2016 | 16,084,721 |
Consolidated Statements of Red6
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | |
Series B | ||
Share price (in dollar per share) | $ 2.1935 | |
Offering costs | $ 1,546 | |
Common Stock | IPO and Private Placement | ||
Share price (in dollar per share) | $ 10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net loss | $ (27,008) | $ (24,410) | $ (6,809) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Stock-based compensation | 3,083 | 2,088 | 271 |
Common stock issued for services | 23 | ||
Depreciation and amortization | 94 | 51 | 15 |
Amortization of debt discount | 100 | 97 | 99 |
Amortization of premium/discount on short-term investments | 3 | 8 | |
Noncash interest | 522 | 417 | 300 |
Change in fair value of preferred stock warrant liability | 65 | (37) | |
Deferred rent | (53) | (4) | 45 |
Deferred revenue | (2,094) | (3,550) | 6,903 |
Changes in assets and liabilities: | |||
Prepaid expenses and other assets | (42) | (424) | (1,701) |
Accounts payable and accrued expenses | (2,203) | 6,144 | 2,282 |
Accrued compensation and related expenses | 425 | 355 | 390 |
Net cash (used in) provided by operating activities | (27,150) | (19,163) | 1,758 |
Cash flows from investing activities | |||
Purchase of property and equipment | (3) | (127) | (70) |
Purchases of available-for-sale short-term investments | (17,506) | (12,790) | |
Proceeds from the maturity of available-for-sale short-term investments | 19,582 | 2,000 | |
Net cash provided by (used in) investing activities | 2,073 | (10,917) | (70) |
Cash flows from financing activities | |||
Proceeds from long-term debt | 10,000 | 7,500 | |
Repayment of long-term debt | (2,000) | (9,930) | (920) |
Proceeds from sale of common stock, net of offering costs paid in the current period | 21,236 | 36,204 | (1,250) |
Proceeds from sale of preferred stock, net of offering costs | 25,654 | ||
Proceeds from issuance of common stock under equity plans | 178 | 179 | 52 |
Net cash provided by financing activities | 19,414 | 36,453 | 31,036 |
(Decrease) increase in cash and cash equivalents | (5,663) | 6,373 | 32,724 |
Cash and cash equivalents at beginning of period | 41,373 | 35,000 | 2,276 |
Cash and cash equivalents at end of period | 35,710 | 41,373 | 35,000 |
Supplemental disclosure of cash flow information | |||
Interest paid | $ 622 | 428 | 270 |
Supplemental schedule of noncash investing and financing activities | |||
Issuance of preferred stock warrants in connection with long-term debt | $ 186 | ||
Issuance of common stock warrants in connection with long-term debt | $ 138 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization And Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Organization and Business TRACON Pharmaceuticals, Inc. (formerly Lexington Pharmaceuticals, Inc.) (TRACON or the Company) was incorporated in the state of Delaware on October 28, 2004. TRACON is a clinical stage biopharmaceutical company focused on the development and commercialization of novel targeted therapeutics for cancer, age‑related macular degeneration and fibrotic diseases. The Company’s research focuses on antibodies that bind to the endoglin receptor, which is essential to angiogenesis (the process of new blood vessel formation) and a key contributor to fibrosis (tissue scarring). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, TRACON Pharma Limited, which was formed in September 2015 and is currently inactive. All significant intercompany accounts and transactions have been eliminated. Basis of Presentation As of December 31, 2016, the Company has devoted substantially all of its efforts to product development, raising capital, and building infrastructure and has not realized revenues from its planned principal operations. The Company has incurred operating losses since inception. As of December 31, 2016, the Company had an accumulated deficit of $85.6 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it continues the development and commercialization of its product candidates and works to develop additional product candidates through research and development programs. At December 31, 2016, the Company had cash, cash equivalents and short-term investments of $44.4 million. Based on the Company’s current business plan, management believes that existing cash, cash equivalents and short-term investments will be sufficient to fund the Company’s obligations for at least the next twelve months. The Company plans to continue to fund its losses from operations and capital funding needs through cash and investments on hand, as well as future debt and equity financing and potential collaboration arrangements. If the Company is not able to secure adequate additional funding, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or delay or reduce the scope of its planned development programs Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to revenue recognition and the valuation of equity awards. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these investments. Cash and cash equivalents include cash in readily available checking and money market funds, as well as certificates of deposit. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the related assets, which is generally five years. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the related assets. Repairs and maintenance costs are charged to expense as incurred. Deferred Rent Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rent expense and amounts paid under the lease agreements is recorded as deferred rent in the accompanying consolidated balance sheets. Tenant improvement allowances and other lease incentives are recorded as liabilities and are amortized on a straight-line basis over the term of the lease as reductions to rent expense. Preferred Stock Warrant Liabilities Prior to the completion of the Company’s initial public offering in February 2015, the Company had outstanding freestanding warrants to purchase shares of its Series A redeemable convertible preferred stock. Since the underlying Series A redeemable convertible preferred stock was classified outside of permanent equity, these preferred stock warrants were classified as liabilities in the December 31, 2014 balance sheet. The Company adjusted the carrying value of such preferred stock warrants to their estimated fair value at each reporting date, with any related increases or decreases in the fair value recorded as an increase or decrease to other income (expense) in the consolidated statements of operations. Upon the completion of the Company’s initial public offering, the warrants no longer require liability accounting and the then fair value of the warrant liability was reclassified into stockholders’ equity. The Company performed the final remeasurement of the warrant liability as of the initial public offering date and recorded the $65,000 change in fair value into other income (expense) for the year ended December 31, 2015. Revenue Recognition The Company’s revenue is derived from its license agreement with Santen Pharmaceutical Co., Ltd. (Santen) as described in Note 7. The Company recognizes revenue when all four of the following criteria are met: (1) there is persuasive evidence that an arrangement exists; (2) delivery of the products and/or services has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as long-term deferred revenue. The Company evaluates multiple-element arrangements to determine: (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. Deliverables are considered separate units of accounting provided that: (a) the delivered items have value to the customer on a standalone basis and (b) if the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the Company’s control. In assessing whether an item has standalone value, the Company considers factors such as the research, manufacturing and commercialization capabilities of the partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the partner can use the other deliverables for their intended purpose without the receipt of the remaining elements, whether the value of the deliverable is dependent on the undelivered items and whether there are other vendors that can provide the undelivered elements. Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method. The Company uses the following hierarchy of values to estimate the selling price of each deliverable: (1) vendor-specific objective evidence of fair value; (2) third-party evidence of selling price; and (3) best estimate of selling price (BESP). The BESP reflects the Company’s best estimate of what the selling price would be if the Company regularly sold the deliverable on a standalone basis. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that are contemplated in negotiating an arrangement and estimated costs. The Company validates the BESP for units of accounting by evaluating whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration between multiple units of accounting. The Company then applies the applicable revenue recognition criteria to each of the separate units of accounting in determining the appropriate period and pattern of recognition. If there is no discernible pattern of performance and/or objectively measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company expects to complete its performance obligations. With respect to revenue derived from reimbursement of direct, out-of-pocket expenses for research and development costs associated with collaborations, where the Company acts as a principal with discretion to choose suppliers, bear credit risk and perform part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations. Milestones The Company uses the milestone method of accounting and revenue is recognized when earned, as evidenced by written acknowledgment from the collaborator or other persuasive evidence that the milestone has been achieved and the payment is non-refundable, provided that the milestone event is substantive. A milestone event is defined as an event: (1) that can only be achieved based in whole or in part on either the Company’s performance or on the occurrence of a specific outcome resulting from the Company’s performance; (2) for which there is substantive uncertainty at the inception of the arrangement that the event will be achieved; and (3) that would result in additional payments being due to the Company. Events for which the occurrence is either contingent solely upon the passage of time or the result of a counterparty’s performance are not considered to be milestone events. A milestone event is substantive if all of the following conditions are met: (a) the consideration is commensurate with either the Company’s performance to achieve the milestone, or the enhancement of the value to the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (b) the consideration relates solely to past performance; and (c) the consideration is reasonable relative to all the deliverables and payment terms (including other potential milestone consideration) within the arrangement. The Company assesses whether a milestone is substantive at the inception of each arrangement. If a milestone is deemed non-substantive, the Company will account for that milestone payment in accordance with the multiple element arrangements guidance and recognize it consistent with the related units of accounting for the arrangement over the related performance period. Clinical Trial Expense Accruals As part of the process of preparing the Company’s financial statements, the Company is required to estimate expenses resulting from its obligations under contracts with vendors, contract research organizations (CROs), and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials. During the course of a clinical trial, the Company adjusts the clinical expense recognition if actual results differ from its estimates. The Company makes estimates of accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. The Company’s clinical trial accruals are dependent upon accurate reporting by CROs and other third-party vendors. Although the Company does not expect its estimates to differ materially from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. For the three years in the period ended December 31, 2016, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. Research and Development Costs Research and development costs, including license fees, are expensed as incurred. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. Stock-Based Compensation Stock-based compensation expense represents the grant date fair value of employee stock option grants, employee restricted stock unit grants (RSUs) and employee stock purchase plan (ESPP) rights recognized as expense over the requisite service period of the awards (usually the vesting period) on a straight-line basis, net of estimated forfeitures. The Company estimates the fair value of stock option grants and ESPP rights using the Black-Scholes option pricing model. The fair value of RSUs is based on the stock price on the date of grant. The Company accounts for stock options granted to non-employees using the fair value approach. These option grants, if any, are subject to periodic revaluation over their vesting terms. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than‑not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss were the same for all periods presented. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average shares of common stock outstanding for the period, without consideration for common stock equivalents and adjusted for the weighted‑average number of common shares outstanding that are subject to repurchase. The Company has excluded 7,878, 6,555, and 2,863 weighted-average shares subject to repurchase or forfeiture from the weighted‑average number of common shares outstanding for the years ended December 31, 2016, 2015, and 2014 respectively. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): December 31, 2016 2015 2014 Redeemable convertible preferred stock outstanding — — 6,369,567 Warrants to purchase redeemable convertible preferred stock — — 38,758 Warrants to purchase common stock 57,173 57,173 — Common stock options and restricted stock units 2,023,478 1,788,149 1,023,847 ESPP shares 2,857 143 — 2,083,508 1,845,465 7,432,172 Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases Recently Adopted Accounting Standards In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Short-Term Investments, Cash Eq
Short-Term Investments, Cash Equivalents and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Short-Term Investments, Cash Equivalents and Fair Value Measurements | 2. Short-Term Investments, Cash Equivalents and Fair Value Measurements At December 31, 2016, short-term investments consist of certificates of deposit and U.S. treasury securities. The Company classifies all investments as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies. These investments are carried at amortized cost which approximates fair value, with the unrealized gains and losses reported as a component of other comprehensive income in equity until realized. A decline in the market value of any short-term investment below cost that is determined to be other-than-temporary will result in a revaluation of its carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. No such impairment charges were recorded for any period presented. Realized gains and losses from the sale of short-term investments, if any, are determined on a specific identification basis. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense on the consolidated statements of operations. Realized and unrealized gains and losses during the periods presented were immaterial. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method and are included in interest income on the consolidated statements of operations. Interest and dividends on securities classified as available-for-sale are included in interest income on the consolidated statements of operations. At December 31, 2016, the remaining contractual maturities of all available-for-sale investments were less than one year. The carrying amounts of cash and cash equivalents, prepaid and other assets, accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Based on the borrowing rates currently available to the Company for loans with similar terms, which is considered a Level 2 input, the Company believes that the fair value of long-term debt approximates its carrying value. The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented. Cash equivalents and short-term investments, all of which are classified as available-for-sale securities, consisted of the following (in thousands) December 31, 2016 Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 3,188 $ — $ — $ 3,188 Certificates of deposit 3,655 — — 3,655 U.S. treasury securities 16,503 — — 16,503 $ 23,346 $ — $ — $ 23,346 Classified as: Cash equivalents $ 14,643 Short-term investments 8,703 Total Cash equivalents and Short-term investments $ 23,346 The fair values of the Company’s assets and liabilities, which are measured at fair value on a recurring basis, were determined using the following inputs (in thousands) Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) At December 31, 2016 Certificates of deposit, money market funds and U.S. treasury securities, included in Cash equivalents and Short-term investments $ 23,346 $ — $ 23,346 $ — At December 31, 2015 Certificates of deposit, money market funds and U.S. treasury securities, included in Cash equivalents and Short-term investments $ 14,996 $ — $ 14,996 $ — |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consist of the following (in thousands): December 31, December 31, 2016 2015 Computer and office equipment $ 115 $ 112 Furniture and fixtures 19 19 Leasehold improvements 124 99 Construction in process — 25 258 255 Less accumulated depreciation and amortization (176 ) (82 ) $ 82 $ 173 Depreciation expense related to property and equipment totaled approximately $94,000, $51,000 and $15,000 for the years ended December 31, 2016, 2015 and 2014, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt Long-term debt and unamortized debt discount balances are as follows (in thousands): December 31, December 31, 2016 2015 Long-term debt $ 8,000 $ 10,000 Less debt discount, net of current portion (537 ) (536 ) Long-term debt, net of debt discount 7,463 9,464 Less current portion of long-term debt (333 ) (2,000 ) Long-term debt, net of current portion $ 7,130 $ 7,464 Current portion of long-term debt $ 333 $ 2,000 Current portion of debt discount — (622 ) Current portion of long-term debt, net $ 333 $ 1,378 In January 2017, the Company entered into a second amendment to its Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the 2017 Amended SVB Loan) under which the Company borrowed $8 million all of which was immediately used to repay the Company’s existing loan with SVB (the 2015 Amended SVB Loan). In accordance with the terms of the 2015 Amended SVB Loan, the Company paid a final payment of $0.9 million associated with the pay off of the 2015 Amended SVB Loan. The 2017 Amended SVB Loan provides for interest to be paid at a rate of 8.55% per annum. Interest-only payments are due monthly through December 2017, which will be extended through June 2018 in the event certain conditions are met. Thereafter, in addition to interest accrued during such period, the monthly payments will include an amount equal to the outstanding principal at December 31, 2017 (or June 30, 2018, as applicable) divided by 30 months. At maturity (or earlier prepayment), the Company is also required to make a final payment equal to 4.0% of the original principal amount borrowed. The 2017 Amended SVB Loan provides for prepayment fees of 3% of the outstanding balance of the loan if the loan is repaid prior to January 26, 2018, 2.0% of the amount prepaid if the prepayment occurs after January 25, 2018 but prior to January 25, 2019 and 1.0% of the amount prepaid if the prepayment occurs thereafter. Except as described above, the 2017 Amended SVB Loan is subject to the same material terms set forth in the 2015 Amended SVB Loan Agreement. In connection with the second amendment, the Company issued SVB a warrant to purchase 46,692 shares of its common stock at an exercise price of $5.14 per share. The warrant is fully exercisable and expires on January 25, 2024. Consistent with the terms of the 2015 Amended SVB loan agreements the 2017 Amended SVB Loan is collateralized by substantially all of the Company’s assets, other than the Company’s intellectual property, and contains customary conditions of borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness and make distributions to holders of the Company’s capital stock. Should an event of default occur, including the occurrence of a material adverse change, the Company could be liable for immediate repayment of all obligations under the 2017 Amended SVB Loan. The 2015 Amended SVB Loan provided for interest to be paid at a rate of 6.5% per annum. Interest-only payments were due monthly through June 2016. Thereafter, in addition to interest accrued during such period, the monthly payments included an amount equal to the outstanding principal at July 1, 2016 divided by 30 months. At maturity (or earlier prepayment), the Company was also required to make a final payment equal to 8.5% of the original $10.0 million principal amount borrowed. The fair value of the warrants and the final payment related to the 2015 Amended SVB Loan were recorded as debt discounts and are being amortized to interest expense using the effective interest method over the term of the debt, in addition to the remaining unamortized discounts related to the SVB Loan and the Amended SVB Loan Agreements. At December 31, 2016, the Company has the following exercisable outstanding warrants for the purchase of common stock issued in connection with the Company’s loan agreements with SVB: Expiration Number of shares Exercise price November 14, 2023 through June 4, 2024 38,758 $ 7.74 May 13, 2022 18,415 $ 10.86 57,173 The fair value of the warrants and the final payment related to the 2015 Amended SVB Loan were recorded as debt discounts and are being amortized to interest expense using the effective interest method over the term of the debt, in addition to the remaining unamortized discounts related to the SVB Loan and the Amended SVB Loan Agreements. Future minimum principal and interest payments under the 2015 and 2017 Amended SVB Loans, including the final payments, are as follows (in thousands): 2017 2018 2019 2020 Less interest and final payment Long-term debt including current portion 2015 Amended SVB Loan $ 1,269 $ — $ — $ — $ (936 ) $ 333 2017 Amended SVB Loan 578 3,766 3,489 1,960 (1,793 ) 8,000 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Facility Lease The Company leases its office space under a non‑cancelable operating lease that expires in April 2017, and has entered into a separate lease for office space that expires April 2022, which will become its corporate headquarters in May 2017. The leases are subject to base lease payments and additional charges for common area maintenance and other costs and includes certain lease incentives and tenant improvement allowances. Rent expense for each of the years ended December 31, 2016, 2015 and 2014 was $0.4 million, $0.2 million and $0.1 million, respectively. Under the terms of the lease agreement for its new corporate headquarters, the Company provided the lessor with an irrevocable letter of credit in the amount of $175,000. The lessor shall be entitled to draw on the letter of credit in the event of any default by the Company under the terms of the lease. Future minimum payments under the non‑cancelable operating lease as of December 31, 2016 are as follows (in thousands): 2017 $ 343 2018 405 2019 423 2020 442 2021 461 $ 2,074 License Agreements The Company has entered into various license agreements pursuant to which the Company acquired licenses to certain intellectual property. The agreements generally required an upfront license fee and, in some cases, reimbursement of patent costs. Additionally, under each agreement, the Company may be required to pay annual maintenance fees, royalties, milestone payments and sublicensing fees. Each of the license agreements is generally cancelable by the Company, given appropriate prior written notice. At December 31, 2016, potential future milestone payments under these agreements totaled an aggregate of approximately $127.0 million. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity (Deficit) | 6. Stockholders’ Equity (Deficit) Redeemable Convertible Preferred Stock In connection with the completion of the Company’s initial public offering on February 4, 2015, all of the outstanding shares of redeemable convertible preferred stock were converted into 6,369,567 shares of the Company’s common stock; outstanding warrants to purchase 150,000 shares of Series A redeemable convertible preferred stock were converted into warrants to purchase 38,758 shares of the Company’s common stock, and the Company’s certificate of incorporation was amended and restated to authorize 200,000,000 shares of common stock and 10,000,000 shares of undesignated preferred stock. No preferred stock dividends were paid or declared by the Company. Sales of Common Stock During November 2016, the Company completed an underwritten public offering of 3,018,750 shares of its common stock at an offering price of $5.75 per share. The Company received net proceeds from this offering of approximately $16.1 million, after deducting underwriting discounts, commissions and offering-related expenses of $1.3 million. In September 2016, concurrent with its License and Option Agreement with Janssen Pharmaceutica N.V. (Janssen) and its affiliate, Johnson & Johnson Innovation-JJDC, Inc. (JJDC) at a purchase price of $5.95 per share (determined by the average of the daily volume weighted average closing prices of the common stock as reported on NASDAQ for the five days prior to the date of the purchase) The Company also entered into an Investor Rights Agreement, pursuant to which the Company granted JJDC certain rights to require the Company to register the shares for resale under the Securities Act. Stock Compensation Plans 2011 Equity Incentive Plan The Company granted awards under the TRACON Pharmaceuticals, Inc. 2011 Equity Incentive Plan until January 2015. The 2011 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights (SARs), restricted stock grants and restricted stock units to eligible recipients. Recipients of incentive stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2011 Plan is no more than ten years. Grants made under the 2011 Plan generally vest on the last day of each month over 48 months from the vesting commencement date subject to continuous service. In connection with the adoption of the 2015 Equity Incentive Plan (the 2015 Plan), the Company terminated the 2011 Plan and no additional awards will be granted under the 2011 Plan. 2015 Equity Incentive Plan Effective January 1, 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the 2015 Plan). Under the 2015 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. Initially, a total of 801,033 shares of common stock were reserved for issuance under the 2015 Plan. In addition, the number of shares of common stock available for issuance under the 2015 Plan will be annually increased on the first day of each fiscal year during the term of the 2015 Plan, beginning with the 2016 fiscal year, by an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year or such other amount as the Company’s board of directors may determine. The maximum term of the options granted under the 2015 Plan is no more than ten years. Grants generally vest at 25% one year from the vesting commencement date and ratably each month thereafter for a period of 36 months, subject to continuous service. In December 2015, the 2015 Plan was amended to allow an additional 500,000 shares of common stock to be used exclusively for the grant of equity awards as a material inducement for individuals to commence employment at the Company in compliance with NASDAQ Listing Rule 5635(c)(4). Restricted Stock Units In 2016, the Company issued RSUs to employees and members of the Board of Directors under the 2015 Equity Incentive Plan. The total fair value of RSUs that vested during the year ended December 31, 2016 was $0. The aggregate intrinsic value of outstanding RSUs at December 31, 2016 was $1.5 million and is based on the Company’s closing market price per share on December 31, 2016 of $4.90. As of December 31, 2016, there was approximately $1.7 million of unrecognized compensation costs related to outstanding RSUs, which is expected to be recognized over a weighted average remaining period of 2.8 years. Restricted stock unit activity under the 2015 Plan is summarized as follows: Weighted Average Number of Grant Date Shares Fair Value Outstanding at December 31, 2015 — $ - Granted 306,780 $ 7.70 Forfeited — $ - Outstanding at December 31, 2016 306,780 $ 7.70 Stock Options Stock option activity under all Plans is summarized as follows: Weighted- Number of Average Options Exercise Price Balance at December 31, 2015 1,788,149 $ 7.76 Granted 107,747 $ 6.68 Exercised (9,300 ) $ 0.70 Forfeited (169,898 ) $ 9.71 Balance at December 31, 2016 1,716,698 $ 7.54 Information about the Company’s outstanding stock options is as follows (in thousands, except share and per share data and contractual term): Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value December 31, 2016: Options outstanding 1,716,698 $ 7.54 7.34 $ 2,241 Options vested and expected to vest 1,716,698 $ 7.54 7.34 $ 2,241 Options exercisable 1,115,178 $ 6.04 6.84 $ 2,162 The weighted-average grant date fair value per share of employee option grants during the years ended December 31, 2016, 2015 and 2014 was $6.68, $12.97 and $4.70, respectively. The aggregate intrinsic value used in the above table of options at December 31, 2016 is based on the Company’s closing market price per common share on December 31, 2016 of $4.90. The Company received approximately $6,500, $54,200 and $52,300 in proceeds from the exercise of stock options during the years ended December 31, 2016, 2015 and 2014, respectively. The total intrinsic value of options exercised was approximately $78,000, $0.8 million and $84,000 during the years ended December 31, 2016, 2015 and 2014, respectively. The total fair value of options that vested during the year ended December 31, 2016, 2015 and 2014 was $3.4 million, $0.8 million and $1.2 million, respectively. Employee Stock Purchase Plan On January 1, 2015, the Company’s board of directors adopted the Employee Stock Purchase Plan (the ESPP), which became effective upon the pricing of the Company’s initial public offering on January 29, 2015. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation. Initially, a total of 183,462 shares of common stock was reserved for issuance under the ESPP. In addition, the number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each fiscal year during the term of the ESPP, beginning with the 2016 fiscal year, by an amount equal to the lessor of: (i) 366,925 shares; (ii) 1% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year; or (iii) such other amount as the Company’s board of directors may determine. Stock compensation expense for the years ended December 31, 2016 and 2015 related to the ESPP was immaterial. Stock-Based Compensation Expense The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2016 2015 2014 Risk-free interest rate 1.6 % 1.7 % 1.9 % Expected volatility 80.0 % 74.0 % 76.0 % Expected term (in years) 6.3 6.3 6.3 Expected dividend yield — % — % — % Risk-free interest rate. The Company bases the risk‑free interest rate assumption on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. Expected volatility. The expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry. Expected term. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period. Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends. The allocation of stock-based compensation is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Research and development $ 1,090 $ 1,038 $ 178 General and administrative 1,993 1,050 93 $ 3,083 $ 2,088 $ 271 As of December 31, 2016 and 2015, the unrecognized compensation cost related to outstanding time-based employee options was $4.0 million and $7.0 million, respectively, and is expected to be recognized as expense over approximately 2.1 years and 3.0 years, respectively. Common Stock Reserved for Future Issuance Common stock reserved for future issuance is as follows: December 31, 2016 2015 Common stock warrants 57,173 57,173 Common stock options and restricted stock units granted and outstanding 2,023,478 1,788,149 Awards available under the 2015 Plan 749,753 507,345 Shares available under the Employee Stock Purchase Plan 261,840 168,453 3,092,244 2,521,120 |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2016 | |
Collaborations Disclosure [Abstract] | |
Collaborations | 7. Collaborations Santen In March 2014, the Company entered into a license agreement with Santen, under which the Company granted Santen an exclusive, worldwide license to certain patents, information and know-how related to TRC105. Under the agreement, Santen is permitted to use, develop, manufacture and commercialize TRC105 products for ophthalmology indications, excluding systemic treatment of ocular tumors. Santen also has the right to grant sublicenses to affiliates and third party collaborators. In the event Santen sublicenses any of its rights under the agreement, Santen will be obligated to pay the Company a portion of any upfront and certain milestone payments received under such sublicense. Santen has sole responsibility for funding, developing, seeking regulatory approval for and commercializing TRC105 products in the field of ophthalmology. In the event that Santen fails to meet certain commercial diligence obligations, the Company will have the option to co-promote TRC105 products in the field of ophthalmology in the United States with Santen. If the Company exercises this option, the Company will pay Santen a percentage of certain development expenses, and the Company will receive a percentage of profits from sales of the licensed products in the ophthalmology field in the United States, but will not also receive royalties on such sales. In consideration of the rights granted to Santen under the agreement, the Company received a one-time upfront fee of $10.0 million. The license agreement provides for various types of payments, including the upfront payment, payment for various technical and regulatory support, payments for delivery of drug substance, reimbursement of certain development costs, milestone payments, and royalties on net product sales. The Company has identified multiple deliverables, which include at inception: (1) a license to patents, information and know-how related to TRC105, (2) technology transfer, (3) collaboration, including technical and regulatory support provided by the Company, (4) manufacturing and supply obligations, and (5) shared chemistry, manufacturing and controls (CMC) development activities. Deliverables 1 and 2 above were substantially delivered at the inception of the agreement, and deliverables 3 through 5 are expected to be delivered during the estimated 31-month period over which the Company will provide technical and regulatory support to Santen. At inception and through December 31, 2016, the Company has identified one single unit of accounting for all the deliverables under the agreement since the delivered elements do not have standalone value. The Company’s technical and regulatory expertise, including manufacturing and CMC activities, in the development of biologic therapeutics, specifically TRC105, is a significant component of Santen’s ability to utilize the license and know-how related to TRC105. Given the early stage of development of TRC105 for ophthalmology, the Company is the only party capable of performing the level and type of technical and regulatory collaboration services required by Santen under the agreement. As a result, the Company has determined that the license, including the ability to sublicense, and know-how related to TRC105 do not have standalone value to a licensee. As such, the Company is recognizing revenue for the fixed or determinable collaboration consideration on a straight-line basis over the estimated 43-month period over which it will deliver its technical and regulatory support. During the year ended December 31, 2016, the expected term over which the Company will provide technical and regulatory support to Santen was extended from 31 to 43 months. The changes in the estimated term decreased net loss by $0.6 million, or $0.04 per share for the three months ended December 31, 2016, and increased net loss by $1.3 million, or $0.10 per share, for the twelve months ended December 31, 2016. In addition, the Company is eligible to receive up to a total of $155.0 million in milestone payments upon the achievement of certain milestones, of which $20.0 million relates to the initiation of certain development activities, $52.5 million relates to the submission of certain regulatory filings and receipt of certain regulatory approvals and $82.5 million relates to commercialization activities and the achievement of specified levels of product sales. The Company has determined that $10.0 million related to the initiation of certain clinical development activities will be based upon its efforts and meet the criteria of substantive milestones and therefore will be recognized as revenue upon achievement of the milestone in accordance with the milestone method of accounting. The remaining $145.0 million of potential milestone payments are not substantive milestones as they do not require the efforts of the Company. During the year ended December 31, 2015, a development milestone that was deemed a substantive milestone at the inception of the arrangement was achieved, and accordingly, the milestone payment of $3.0 million was recognized as revenue. If TRC105 products are successfully commercialized in the field of ophthalmology, Santen will be required to pay the Company tiered royalties on net sales ranging from high single digits to low teens, depending on the volume of sales, subject to adjustments in certain circumstances. In addition, Santen will reimburse the Company for all royalties due by the Company under certain third party agreements with respect to the use, manufacture or commercialization of TRC105 products in the field of ophthalmology by Santen and its affiliates and sublicensees. Royalties will continue on a country-by-country basis through the later of the expiration of the Company’s patent rights applicable to the TRC105 products in a given country or 12 years after the first commercial sale of the first TRC105 product commercially launched in such country. Santen may unilaterally terminate this agreement in its entirety, or on a country-by-country basis, upon written notice to the Company. Either party may terminate the agreement in the event of the other party’s bankruptcy or dissolution or for the other party’s material breach of the agreement that remains uncured 90 days (or 30 days with respect to a payment breach) after receiving notice from the non-breaching party. Unless earlier terminated, the agreement continues in effect until the termination of Santen’s payment obligations. In connection with the collaboration with Santen, the Company recognized revenue of $3.4 and $7.9 million for the years ended December 31, 2016 and 2015, respectively, and had deferred revenue of $1.3 million and $3.4 million as of December 31, 2016 and 2015, respectively. Janssen In September 2016, the Company entered into a license and option agreement with Janssen (the License and Option Agreement) under which Janssen granted the Company a license to technology and intellectual property to develop, manufacture and commercialize two compounds: a small molecule inhibitor of androgen receptor and androgen receptor mutations (the AR Mutant Program or TRC253) which is intended for the treatment of men with prostate cancer, and an inhibitor of NF-kB inducing kinase (the NIK Program or TRC694, and, together with the AR Mutant Program, the Programs). With respect to the AR Mutant Program, Janssen maintains an option, which is exercisable until 90 days after the Company demonstrates clinical proof of concept, to regain the rights to the licensed intellectual property and to obtain an exclusive license to commercialize the compounds and certain other specified intellectual property developed under the AR Mutant Program. If Janssen exercises the option, Janssen will be obligated to pay the Company (i) a one-time option exercise fee of $45.0 million; (ii) regulatory and commercial based milestone payments totaling up to $137.5 million upon achievement of specified events; and (iii) royalties in the low single digits on annual net sales of AR Mutant Program products. If Janssen does not exercise the option, the Company would then have the right to retain worldwide development and commercialization rights to the AR Mutant Program, in which case, the Company would be obligated to pay to Janssen (x) development and regulatory based milestone payments totaling up to $45.0 million upon achievement of specified events, and (y) royalties in the low single digits based on annual net sales of AR Mutant Program products, subject to certain specified reductions. With respect to the NIK Program, Janssen maintains a right, which is exercisable within 90 days following the date on which the Company demonstrates clinical proof of concept with respect to the NIK Program, to negotiate exclusively for a period of six months for a reversion of the related rights in the licensed intellectual property and to obtain an exclusive license to commercialize the compounds and certain other specified intellectual property developed under the NIK Program. If Janssen does not exercise its right of first negotiation, or, if after exercise of such right, the Company and Janssen are unable to reach an agreement on the terms of a reversion and exclusive license, and, in either case, the Company continues the development of the NIK Program, then the Company would be obligated to pay Janssen (i) development and regulatory based milestone payments totaling up to $60.0 million upon achievement of specified events, and (ii) royalties in the low single digits based on annual net sales of NIK Program products, subject to certain specified reductions. No consideration was exchanged for these assets on the acquisition date. Given the early preclinical stage of development of these assets and the low likelihood of success of development through regulatory approval, no value has been assigned to these assets in the accompanying consolidated balance sheet. The Company is obligated to use diligent efforts to develop the Programs according to agreed upon development plans, timelines and budgets. For each Program that the Company retains, the Company is further obligated to use commercially reasonable efforts to develop, obtain marketing approval for, and commercialize licensed products. Until the expiration or earlier termination of the development term of the AR Mutant Program or the NIK Program, as applicable, under the License and Option Agreement, subject to specified exceptions, the Company has agreed not to research, develop or commercialize any compounds or products related to the AR Mutant Program or the NIK Program, as applicable, other than pursuant to the collaboration with Janssen. The License and Option Agreement may be terminated for uncured breach, bankruptcy, or the failure or inability to demonstrate clinical proof of concept with respect to a particular Program during specified timeframes. In addition, the License and Option Agreement will automatically terminate (a) with respect to the AR Mutant Program, upon Janssen exercising its option in respect of the AR Mutant Program and making payment of the option exercise fee to the Company or, if Janssen does not exercise the option, upon the expiration of all payment obligations of the Company to Janssen with respect of the AR Mutant Program, and (b) with respect to the NIK Program, upon the Company and Janssen entering into an exclusive license agreement following Janssen’s exercise of its right of first negotiation or, if Janssen’s right of first negotiation with respect to the NIK Program expires and the Company and Janssen have not entered into an exclusive license agreement, upon the expiration of all payment obligations of the Company to Janssen with respect of the NIK Program. The Company may also terminate a Program or the Agreement in its entirety without cause, subject to specified conditions. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes A reconciliation of the Company’s effective tax rate and federal statutory tax rate is summarized as follows (in thousands): Years Ended December 31, 2016 2015 2014 Federal income taxes $ (9,453 ) $ (8,300 ) $ (2,315 ) State income taxes, net of federal benefit — — (381 ) Permanent items 717 277 59 Uncertain tax positions 1,644 749 — Research and development credits (2,078 ) (881 ) (252 ) California net operating loss carryforwards (1,054 ) — — Rate change (489 ) — — Other, net 5 82 18 Change in valuation allowance 10,708 8,073 2,871 Provision for income taxes $ — $ — $ — Significant components of the Company’s deferred tax assets are summarized as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 24,484 $ 14,950 Research and development credits 3,262 1,606 Deferred revenue 441 1,140 Depreciation and amortization 229 121 Other, net 1,753 818 Total deferred tax assets 30,169 18,635 Valuation allowance (30,169 ) (18,635 ) Net deferred tax assets $ — $ — The Company has net deferred tax assets relating primarily to net operating loss (NOL) carryforwards and research and development credit carryforwards. Subject to certain limitations, the Company may use these deferred tax assets to offset taxable income in future periods. Due to the Company’s history of losses and uncertainty regarding future earnings, a full valuation allowance has been recorded against the Company’s deferred tax assets, as it is more likely than not that such assets will not be realized. The net change in the total valuation allowance for the years ended December 31, 2016, 2015 and 2014 was $10.7 million, $8.1 million and $2.9 million, respectively. At December 31, 2016, the Company had federal and California NOL carryforwards of approximately $69.1 million and $44.0 million, respectively. The federal and California NOL carryforwards will begin to expire in 2030, unless previously utilized. At December 31, 2016, the Company also had federal and California research and development and Orphan Drug credit carryforwards of approximately $3.6 million and $1.1 million, respectively. The federal research and development credit carryforwards will begin expiring in 2031 unless previously utilized. The California research credit carry forward does not expire. Pursuant to Sections 382 and 383 of the Code, annual use of the Company’s NOL and research and development credit carryforwards may be limited in the event that a cumulative change in ownership of more than 50% occurs within a three-year period. The Company completed a Section 382/383 analysis regarding the limitation of NOL and research and development credit carryforwards as of December 31, 2015 and as a result of the analysis, ownership changes were determined to have occurred and certain deferred tax assets were written off. The Company will continue to consider changes in ownership that may cause losses of tax attributes in the future. The changes in the Company’s unrecognized tax benefits are summarized as follows (in thousands): Balance at December 31, 2013 $ 277 Decrease related to prior year positions — Increase related to current year positions 92 Balance at December 31, 2014 369 Increase related to prior year positions 1,135 Increase related to current year positions 318 Balance at December 31, 2015 1,822 Increase related to prior year positions 1,902 Increase related to current year positions 453 Balance at December 31, 2016 $ 4,177 The Company’s policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense. The Company has no accruals for interest or penalties in the accompanying consolidated balance sheets as of December 31, 2016 and 2015 and has not recognized interest or penalties in the accompanying consolidated statements of operations for the three years in the period ended December 31, 2016. Due to the valuation allowance recorded against the Company’s deferred tax assets, future changes in unrecognized tax benefits will not impact the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly in the next 12 months. The Company is subject to taxation in the United States and California. Due to the net operating loss carryforwards, the U.S. federal and California returns are open to examination for all years since inception. The Company has not been, nor is it currently, under examination by the federal or any state tax authority. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) Plan | 9. 401(k) Plan The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain matching contributions to the 401(k) plan. Matching contributions for the years ended December 31, 2016, 2015 and 2014 totaled approximately $172,000, $107,000 and $73,000, respectively. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | 10. Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for the years ended December 31, 2016 and 2015 are as follows (in thousands, except per share data): First Second Third Fourth Quarter Quarter Quarter Quarter 2016 Revenue $ 1,210 $ 807 $ 815 $ 617 Total operating expenses $ 7,504 $ 8,817 $ 6,412 $ 6,692 Consolidated net loss $ (6,526 ) $ (8,297 ) $ (5,871 ) $ (6,314 ) Basic and diluted net loss attributable to common stockholders $ (0.54 ) $ (0.68 ) $ (0.48 ) $ (0.45 ) 2015 Revenue $ 1,132 $ 4,197 $ 1,180 $ 1,395 Total operating expenses $ 4,844 $ 6,881 $ 7,415 $ 12,231 Consolidated net loss $ (4,026 ) $ (2,921 ) $ (6,447 ) $ (11,047 ) Basic and diluted net loss attributable to common stockholders $ (0.50 ) $ (0.24 ) $ (0.53 ) $ (0.91 ) |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | 11. Subsequent Event On February 22, 2017, the Company entered into a long-term manufacturing agreement, or the Manufacturing Agreement, with Lonza Biologics Tuas Pte Ltd, or Lonza, for the long term manufacture and supply of registration and commercial batches of TRC105, the Company’s lead drug product candidate. Under the Manufacturing Agreement, Lonza has agreed to manufacture TRC105 pursuant to purchase orders and in accordance with the manufacturing specifications agreed upon between the Company and Lonza. The Company is required to purchase certain batches of TRC105 prior to regulatory approval with a total estimated cost of approximately $15.0 million. The Manufacturing Agreement has an initial term beginning on the effective date and ending on the seventh anniversary of the date of first regulatory approval of TRC105 by the FDA or EMA. The Manufacturing Agreement may be renewed for an additional three years upon the written agreement of both parties no later than the fifth anniversary of the date of first approval of TRC105 by the FDA or EMA. Either party may terminate the Manufacturing Agreement due to a material breach of the Manufacturing Agreement by the other party, subject to prior written notice and a cure period, due to the insolvency or bankruptcy of the other party, due to a force majeure event that prevents performance under the Manufacturing Agreement for at least six months, or if the parties fail to enter into an initial project plan within 90 days of the date of the Manufacturing Agreement (which period may be extended by mutual agreement of the parties). The Company may terminate the Manufacturing Agreement, subject to 60 days’ written notice, if the Company discontinues the TRC105 program, whether due to a notice of non-approval or withdrawal of marketing approval by a regulatory agency or otherwise. In the event of a termination by the Company the Company’s the Company |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization And Accounting Policies [Abstract] | |
Organization and Business | Organization and Business TRACON Pharmaceuticals, Inc. (formerly Lexington Pharmaceuticals, Inc.) (TRACON or the Company) was incorporated in the state of Delaware on October 28, 2004. TRACON is a clinical stage biopharmaceutical company focused on the development and commercialization of novel targeted therapeutics for cancer, age‑related macular degeneration and fibrotic diseases. The Company’s research focuses on antibodies that bind to the endoglin receptor, which is essential to angiogenesis (the process of new blood vessel formation) and a key contributor to fibrosis (tissue scarring). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, TRACON Pharma Limited, which was formed in September 2015 and is currently inactive. All significant intercompany accounts and transactions have been eliminated. |
Basis of Presentation | Basis of Presentation As of December 31, 2016, the Company has devoted substantially all of its efforts to product development, raising capital, and building infrastructure and has not realized revenues from its planned principal operations. The Company has incurred operating losses since inception. As of December 31, 2016, the Company had an accumulated deficit of $85.6 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it continues the development and commercialization of its product candidates and works to develop additional product candidates through research and development programs. At December 31, 2016, the Company had cash, cash equivalents and short-term investments of $44.4 million. Based on the Company’s current business plan, management believes that existing cash, cash equivalents and short-term investments will be sufficient to fund the Company’s obligations for at least the next twelve months. The Company plans to continue to fund its losses from operations and capital funding needs through cash and investments on hand, as well as future debt and equity financing and potential collaboration arrangements. If the Company is not able to secure adequate additional funding, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or delay or reduce the scope of its planned development programs |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to revenue recognition and the valuation of equity awards. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these investments. Cash and cash equivalents include cash in readily available checking and money market funds, as well as certificates of deposit. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the related assets, which is generally five years. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the related assets. Repairs and maintenance costs are charged to expense as incurred. |
Deferred Rent | Deferred Rent Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rent expense and amounts paid under the lease agreements is recorded as deferred rent in the accompanying consolidated balance sheets. Tenant improvement allowances and other lease incentives are recorded as liabilities and are amortized on a straight-line basis over the term of the lease as reductions to rent expense. |
Preferred Stock Warrant Liabilities | Preferred Stock Warrant Liabilities Prior to the completion of the Company’s initial public offering in February 2015, the Company had outstanding freestanding warrants to purchase shares of its Series A redeemable convertible preferred stock. Since the underlying Series A redeemable convertible preferred stock was classified outside of permanent equity, these preferred stock warrants were classified as liabilities in the December 31, 2014 balance sheet. The Company adjusted the carrying value of such preferred stock warrants to their estimated fair value at each reporting date, with any related increases or decreases in the fair value recorded as an increase or decrease to other income (expense) in the consolidated statements of operations. Upon the completion of the Company’s initial public offering, the warrants no longer require liability accounting and the then fair value of the warrant liability was reclassified into stockholders’ equity. The Company performed the final remeasurement of the warrant liability as of the initial public offering date and recorded the $65,000 change in fair value into other income (expense) for the year ended December 31, 2015. |
Revenue Recognition | Revenue Recognition The Company’s revenue is derived from its license agreement with Santen Pharmaceutical Co., Ltd. (Santen) as described in Note 7. The Company recognizes revenue when all four of the following criteria are met: (1) there is persuasive evidence that an arrangement exists; (2) delivery of the products and/or services has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as long-term deferred revenue. The Company evaluates multiple-element arrangements to determine: (1) the deliverables included in the arrangement and (2) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. Deliverables are considered separate units of accounting provided that: (a) the delivered items have value to the customer on a standalone basis and (b) if the arrangement includes a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and substantially in the Company’s control. In assessing whether an item has standalone value, the Company considers factors such as the research, manufacturing and commercialization capabilities of the partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the partner can use the other deliverables for their intended purpose without the receipt of the remaining elements, whether the value of the deliverable is dependent on the undelivered items and whether there are other vendors that can provide the undelivered elements. Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method. The Company uses the following hierarchy of values to estimate the selling price of each deliverable: (1) vendor-specific objective evidence of fair value; (2) third-party evidence of selling price; and (3) best estimate of selling price (BESP). The BESP reflects the Company’s best estimate of what the selling price would be if the Company regularly sold the deliverable on a standalone basis. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that are contemplated in negotiating an arrangement and estimated costs. The Company validates the BESP for units of accounting by evaluating whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration between multiple units of accounting. The Company then applies the applicable revenue recognition criteria to each of the separate units of accounting in determining the appropriate period and pattern of recognition. If there is no discernible pattern of performance and/or objectively measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company expects to complete its performance obligations. With respect to revenue derived from reimbursement of direct, out-of-pocket expenses for research and development costs associated with collaborations, where the Company acts as a principal with discretion to choose suppliers, bear credit risk and perform part of the services required in the transaction, the Company records revenue for the gross amount of the reimbursement. The costs associated with these reimbursements are reflected as a component of research and development expense in the consolidated statements of operations. Milestones The Company uses the milestone method of accounting and revenue is recognized when earned, as evidenced by written acknowledgment from the collaborator or other persuasive evidence that the milestone has been achieved and the payment is non-refundable, provided that the milestone event is substantive. A milestone event is defined as an event: (1) that can only be achieved based in whole or in part on either the Company’s performance or on the occurrence of a specific outcome resulting from the Company’s performance; (2) for which there is substantive uncertainty at the inception of the arrangement that the event will be achieved; and (3) that would result in additional payments being due to the Company. Events for which the occurrence is either contingent solely upon the passage of time or the result of a counterparty’s performance are not considered to be milestone events. A milestone event is substantive if all of the following conditions are met: (a) the consideration is commensurate with either the Company’s performance to achieve the milestone, or the enhancement of the value to the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (b) the consideration relates solely to past performance; and (c) the consideration is reasonable relative to all the deliverables and payment terms (including other potential milestone consideration) within the arrangement. The Company assesses whether a milestone is substantive at the inception of each arrangement. If a milestone is deemed non-substantive, the Company will account for that milestone payment in accordance with the multiple element arrangements guidance and recognize it consistent with the related units of accounting for the arrangement over the related performance period. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals As part of the process of preparing the Company’s financial statements, the Company is required to estimate expenses resulting from its obligations under contracts with vendors, contract research organizations (CROs), and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials. During the course of a clinical trial, the Company adjusts the clinical expense recognition if actual results differ from its estimates. The Company makes estimates of accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. The Company’s clinical trial accruals are dependent upon accurate reporting by CROs and other third-party vendors. Although the Company does not expect its estimates to differ materially from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any particular period. For the three years in the period ended December 31, 2016, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. |
Research and Development Costs | Research and Development Costs Research and development costs, including license fees, are expensed as incurred. |
Patent Costs | Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense represents the grant date fair value of employee stock option grants, employee restricted stock unit grants (RSUs) and employee stock purchase plan (ESPP) rights recognized as expense over the requisite service period of the awards (usually the vesting period) on a straight-line basis, net of estimated forfeitures. The Company estimates the fair value of stock option grants and ESPP rights using the Black-Scholes option pricing model. The fair value of RSUs is based on the stock price on the date of grant. The Company accounts for stock options granted to non-employees using the fair value approach. These option grants, if any, are subject to periodic revaluation over their vesting terms. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than‑not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss were the same for all periods presented. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average shares of common stock outstanding for the period, without consideration for common stock equivalents and adjusted for the weighted‑average number of common shares outstanding that are subject to repurchase. The Company has excluded 7,878, 6,555, and 2,863 weighted-average shares subject to repurchase or forfeiture from the weighted‑average number of common shares outstanding for the years ended December 31, 2016, 2015, and 2014 respectively. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): December 31, 2016 2015 2014 Redeemable convertible preferred stock outstanding — — 6,369,567 Warrants to purchase redeemable convertible preferred stock — — 38,758 Warrants to purchase common stock 57,173 57,173 — Common stock options and restricted stock units 2,023,478 1,788,149 1,023,847 ESPP shares 2,857 143 — 2,083,508 1,845,465 7,432,172 |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization And Accounting Policies [Abstract] | |
Schedule of potentially dilutive securities not included in the calculation of diluted net loss per share | Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): December 31, 2016 2015 2014 Redeemable convertible preferred stock outstanding — — 6,369,567 Warrants to purchase redeemable convertible preferred stock — — 38,758 Warrants to purchase common stock 57,173 57,173 — Common stock options and restricted stock units 2,023,478 1,788,149 1,023,847 ESPP shares 2,857 143 — 2,083,508 1,845,465 7,432,172 |
Short-Term Investments, Cash 21
Short-Term Investments, Cash Equivalents and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Available-for-sale Securities | Cash equivalents and short-term investments, all of which are classified as available-for-sale securities, consisted of the following (in thousands) December 31, 2016 Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 3,188 $ — $ — $ 3,188 Certificates of deposit 3,655 — — 3,655 U.S. treasury securities 16,503 — — 16,503 $ 23,346 $ — $ — $ 23,346 Classified as: Cash equivalents $ 14,643 Short-term investments 8,703 Total Cash equivalents and Short-term investments $ 23,346 |
Schedule of assets and liabilities measured at fair value on a recurring basis | The fair values of the Company’s assets and liabilities, which are measured at fair value on a recurring basis, were determined using the following inputs (in thousands) Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) At December 31, 2016 Certificates of deposit, money market funds and U.S. treasury securities, included in Cash equivalents and Short-term investments $ 23,346 $ — $ 23,346 $ — At December 31, 2015 Certificates of deposit, money market funds and U.S. treasury securities, included in Cash equivalents and Short-term investments $ 14,996 $ — $ 14,996 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following (in thousands): December 31, December 31, 2016 2015 Computer and office equipment $ 115 $ 112 Furniture and fixtures 19 19 Leasehold improvements 124 99 Construction in process — 25 258 255 Less accumulated depreciation and amortization (176 ) (82 ) $ 82 $ 173 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt and unamortized debt discount balances | Long-term debt and unamortized debt discount balances are as follows (in thousands): December 31, December 31, 2016 2015 Long-term debt $ 8,000 $ 10,000 Less debt discount, net of current portion (537 ) (536 ) Long-term debt, net of debt discount 7,463 9,464 Less current portion of long-term debt (333 ) (2,000 ) Long-term debt, net of current portion $ 7,130 $ 7,464 Current portion of long-term debt $ 333 $ 2,000 Current portion of debt discount — (622 ) Current portion of long-term debt, net $ 333 $ 1,378 |
Schedule of exercisable outstanding warrants for purchase of common stock issued | At December 31, 2016, the Company has the following exercisable outstanding warrants for the purchase of common stock issued in connection with the Company’s loan agreements with SVB: Expiration Number of shares Exercise price November 14, 2023 through June 4, 2024 38,758 $ 7.74 May 13, 2022 18,415 $ 10.86 57,173 |
Schedule of future minimum principal and interest payments | Future minimum principal and interest payments under the 2015 and 2017 Amended SVB Loans, including the final payments, are as follows (in thousands): 2017 2018 2019 2020 Less interest and final payment Long-term debt including current portion 2015 Amended SVB Loan $ 1,269 $ — $ — $ — $ (936 ) $ 333 2017 Amended SVB Loan 578 3,766 3,489 1,960 (1,793 ) 8,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments under the non-cancelable operating lease | Future minimum payments under the non‑cancelable operating lease as of December 31, 2016 are as follows (in thousands): 2017 $ 343 2018 405 2019 423 2020 442 2021 461 $ 2,074 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders Equity Note [Abstract] | |
Schedule of restricted stock unit activity under 2015 plan | Restricted stock unit activity under the 2015 Plan is summarized as follows: Weighted Average Number of Grant Date Shares Fair Value Outstanding at December 31, 2015 — $ - Granted 306,780 $ 7.70 Forfeited — $ - Outstanding at December 31, 2016 306,780 $ 7.70 |
Schedule of stock option activity | Stock option activity under all Plans is summarized as follows: Weighted- Number of Average Options Exercise Price Balance at December 31, 2015 1,788,149 $ 7.76 Granted 107,747 $ 6.68 Exercised (9,300 ) $ 0.70 Forfeited (169,898 ) $ 9.71 Balance at December 31, 2016 1,716,698 $ 7.54 |
Schedule of outstanding stock options | Information about the Company’s outstanding stock options is as follows (in thousands, except share and per share data and contractual term): Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value December 31, 2016: Options outstanding 1,716,698 $ 7.54 7.34 $ 2,241 Options vested and expected to vest 1,716,698 $ 7.54 7.34 $ 2,241 Options exercisable 1,115,178 $ 6.04 6.84 $ 2,162 |
Summary of weighted-average assumptions used Black-Scholes option pricing model to determine the fair value | The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2016 2015 2014 Risk-free interest rate 1.6 % 1.7 % 1.9 % Expected volatility 80.0 % 74.0 % 76.0 % Expected term (in years) 6.3 6.3 6.3 Expected dividend yield — % — % — % |
Summary of allocation of stock-based compensation | The allocation of stock-based compensation is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Research and development $ 1,090 $ 1,038 $ 178 General and administrative 1,993 1,050 93 $ 3,083 $ 2,088 $ 271 |
Schedule of common stock reserved for future issuance | Common stock reserved for future issuance is as follows: December 31, 2016 2015 Common stock warrants 57,173 57,173 Common stock options and restricted stock units granted and outstanding 2,023,478 1,788,149 Awards available under the 2015 Plan 749,753 507,345 Shares available under the Employee Stock Purchase Plan 261,840 168,453 3,092,244 2,521,120 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of effective tax rate and federal statutory tax rate | A reconciliation of the Company’s effective tax rate and federal statutory tax rate is summarized as follows (in thousands): Years Ended December 31, 2016 2015 2014 Federal income taxes $ (9,453 ) $ (8,300 ) $ (2,315 ) State income taxes, net of federal benefit — — (381 ) Permanent items 717 277 59 Uncertain tax positions 1,644 749 — Research and development credits (2,078 ) (881 ) (252 ) California net operating loss carryforwards (1,054 ) — — Rate change (489 ) — — Other, net 5 82 18 Change in valuation allowance 10,708 8,073 2,871 Provision for income taxes $ — $ — $ — |
Schedule of components of deferred tax assets | Significant components of the Company’s deferred tax assets are summarized as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 24,484 $ 14,950 Research and development credits 3,262 1,606 Deferred revenue 441 1,140 Depreciation and amortization 229 121 Other, net 1,753 818 Total deferred tax assets 30,169 18,635 Valuation allowance (30,169 ) (18,635 ) Net deferred tax assets $ — $ — |
Schedule of changes in unrecognized tax benefits | The changes in the Company’s unrecognized tax benefits are summarized as follows (in thousands): Balance at December 31, 2013 $ 277 Decrease related to prior year positions — Increase related to current year positions 92 Balance at December 31, 2014 369 Increase related to prior year positions 1,135 Increase related to current year positions 318 Balance at December 31, 2015 1,822 Increase related to prior year positions 1,902 Increase related to current year positions 453 Balance at December 31, 2016 $ 4,177 |
Quarterly Financial Data (Una27
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly data | Summarized quarterly data for the years ended December 31, 2016 and 2015 are as follows (in thousands, except per share data): First Second Third Fourth Quarter Quarter Quarter Quarter 2016 Revenue $ 1,210 $ 807 $ 815 $ 617 Total operating expenses $ 7,504 $ 8,817 $ 6,412 $ 6,692 Consolidated net loss $ (6,526 ) $ (8,297 ) $ (5,871 ) $ (6,314 ) Basic and diluted net loss attributable to common stockholders $ (0.54 ) $ (0.68 ) $ (0.48 ) $ (0.45 ) 2015 Revenue $ 1,132 $ 4,197 $ 1,180 $ 1,395 Total operating expenses $ 4,844 $ 6,881 $ 7,415 $ 12,231 Consolidated net loss $ (4,026 ) $ (2,921 ) $ (6,447 ) $ (11,047 ) Basic and diluted net loss attributable to common stockholders $ (0.50 ) $ (0.24 ) $ (0.53 ) $ (0.91 ) |
Organization and Summary of S28
Organization and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)segmentshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | |
Basis of Presentation | |||
Accumulated deficit | $ (85,598) | $ (58,590) | |
Cash, cash equivalents and short-term investments | $ 44,400 | ||
Property and Equipment | |||
Estimated useful life | 5 years | ||
Preferred Stock Warrant Liabilities | |||
Change in fair value of preferred stock warrant liability | $ 65 | $ (37) | |
Weighted-average shares subject to repurchase or forfeiture (in shares) | shares | 7,878 | 6,555 | 2,863 |
Segment reporting | |||
Number of reportable segments | segment | 1 | ||
Other income (expense) | |||
Preferred Stock Warrant Liabilities | |||
Change in fair value of preferred stock warrant liability | $ 65,000 |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Not Included in the Calculation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive securities | |||
Antidilutive securities | 2,083,508 | 1,845,465 | 7,432,172 |
Redeemable Convertible Preferred Stock | |||
Antidilutive securities | |||
Antidilutive securities | 6,369,567 | ||
Warrants | |||
Antidilutive securities | |||
Antidilutive securities | 57,173 | 57,173 | |
Warrants | Redeemable Convertible Preferred Stock | |||
Antidilutive securities | |||
Antidilutive securities | 38,758 | ||
Common Stock Options and Restricted Stock Units | |||
Antidilutive securities | |||
Antidilutive securities | 2,023,478 | 1,788,149 | 1,023,847 |
ESPP Shares | |||
Antidilutive securities | |||
Antidilutive securities | 2,857 | 143 |
Short-Term Investments, Cash 30
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Maximum period for remaining contractual maturities of available-for-sale investments | 1 year |
Amount of transfers between levels | $ 0 |
Short-Term Investments, Cash 31
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Schedule of Available for Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | $ 23,346 | |
Estimated Fair Value | 23,346 | |
Short-term investments | 8,703 | $ 10,783 |
Estimated Fair Value | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cash equivalents | 14,643 | |
Short-term investments | 8,703 | |
Money market funds | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | 3,188 | |
Estimated Fair Value | 3,188 | |
Certificates of deposit | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | 3,655 | |
Estimated Fair Value | 3,655 | |
U.S. treasury securities | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | 16,503 | |
Estimated Fair Value | $ 16,503 |
Short-Term Investments, Cash 32
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - Certificates of deposit, money market funds and U.S. treasury securities, included in Cash and cash equivalents and Short-term investments - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Fair value, assets | $ 23,346 | $ 14,996 |
Level 2 | ||
Assets: | ||
Fair value, assets | $ 23,346 | $ 14,996 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and Equipment | ||
Property and equipment, gross | $ 258 | $ 255 |
Less accumulated depreciation and amortization | (176) | (82) |
Property and equipment, net | 82 | 173 |
Computer and office equipment | ||
Property and Equipment | ||
Property and equipment, gross | 115 | 112 |
Furniture and fixtures | ||
Property and Equipment | ||
Property and equipment, gross | 19 | 19 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | $ 124 | 99 |
Construction-in-process | ||
Property and Equipment | ||
Property and equipment, gross | $ 25 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization | $ 94 | $ 51 | $ 15 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt and Unamortized Debt Discount Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Long-term debt | ||
Long-term debt | $ 8,000 | $ 10,000 |
Less debt discount, net of current portion | (537) | (536) |
Long-term debt, net of debt discount | 7,463 | 9,464 |
Less current portion of long-term debt | (333) | (2,000) |
Long-term debt, net of current portion | 7,130 | 7,464 |
Current portion of long-term debt | 333 | 2,000 |
Current portion of debt discount | (622) | |
Current portion of long-term debt, net | $ 333 | $ 1,378 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 10,000,000 | $ 7,500,000 | ||
Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Warrants issued | 57,173 | |||
2017 SVB Loan | Silicon Valley Bank | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 8,000,000 | |||
Final payment on payoff | $ 900,000 | |||
Interest rate | 8.55% | |||
Repayment period | 30 months | |||
Additional fee on final payment due (as a percent) | 4.00% | |||
Warrants issued | 46,692 | |||
Exercise price (per share) | $ 5.14 | |||
2017 SVB Loan | Silicon Valley Bank | Subsequent Event | Prior to January 26, 2018 | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee (as a percent) | 3.00% | |||
2017 SVB Loan | Silicon Valley Bank | Subsequent Event | After January 25, 2018 Prior to January 25, 2019 | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee (as a percent) | 2.00% | |||
2017 SVB Loan | Silicon Valley Bank | Subsequent Event | After January 25, 2019 | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee (as a percent) | 1.00% | |||
2015 SVB Loan | Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 10,000,000 | |||
Interest rate | 6.50% | |||
Repayment period | 30 months | |||
Additional fee on final payment due (as a percent) | 8.50% |
Long-Term Debt - Schedule of Ex
Long-Term Debt - Schedule of Exercisable Outstanding Warrants for Purchase of Common Stock Issued (Details) - Silicon Valley Bank | Dec. 31, 2016$ / sharesshares |
Debt Instrument [Line Items] | |
Warrants issued | 57,173 |
November 14, 2023 Through June 4, 2024 | |
Debt Instrument [Line Items] | |
Warrants issued | 38,758 |
Exercise price (per share) | $ / shares | $ 7.74 |
May 13, 2022 | |
Debt Instrument [Line Items] | |
Warrants issued | 18,415 |
Exercise price (per share) | $ / shares | $ 10.86 |
Long-Term Debt - Schedule of Fu
Long-Term Debt - Schedule of Future Minimum Principal and Interest Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Long-term debt including current portion | $ 8,000 | $ 10,000 |
2015 Amended SVB Loan | ||
Debt Instrument [Line Items] | ||
2,017 | 1,269 | |
Less interest and final payment | (936) | |
Long-term debt including current portion | 333 | |
2017 Amended SVB Loan | ||
Debt Instrument [Line Items] | ||
2,017 | 578 | |
2,018 | 3,766 | |
2,019 | 3,489 | |
2,020 | 1,960 | |
Less interest and final payment | (1,793) | |
Long-term debt including current portion | $ 8,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | |||
Rent expense | $ 400 | $ 200 | $ 100 |
Irrevocable letter of credit provided to lessor | 175,000 | ||
Research and development arrangement | |||
Commitments and Contingencies | |||
Potential milestone payable | $ 127,000 |
Commitments and Contingencies40
Commitments and Contingencies - Schedule of Future Minimum Payments Under the Non-Cancelable Operating Lease (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Future minimum payments under non-cancelable operating lease | |
2,017 | $ 343 |
2,018 | 405 |
2,019 | 423 |
2,020 | 442 |
2,021 | 461 |
Total | $ 2,074 |
Stockholders' Equity (Deficit41
Stockholders' Equity (Deficit) - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 04, 2015 | Nov. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 |
Class Of Stock [Line Items] | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||
Undesignated preferred stock authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock dividends paid | $ 0 | ||||
Common Stock | |||||
Class Of Stock [Line Items] | |||||
Number of redeemable convertible preferred stock converted into common stock | 6,369,567 | ||||
Conversion of warrants to purchase shares | 38,758 | ||||
Stock issued during period, shares, new issues | 4,100,000 | ||||
Proceeds from sale of common stock | $ 16.1 | ||||
Payments of stock issuance costs | $ 1.3 | ||||
Common Stock | License and Option Agreement | |||||
Class Of Stock [Line Items] | |||||
Stock issued during period, shares, new issues | 840,022 | ||||
Shares issued, price per share | $ 5.95 | ||||
Proceeds from sale of common stock | $ 5 | ||||
Number of consecutive trading days | 5 days | ||||
Common Stock | IPO | |||||
Class Of Stock [Line Items] | |||||
Stock issued during period, shares, new issues | 3,018,750 | ||||
Shares issued, price per share | $ 5.75 | ||||
Redeemable Convertible Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Conversion of warrants to purchase shares | 150,000 |
Stockholders' Equity (Deficit42
Stockholders' Equity (Deficit) - (SBC) - Additional Information (Details) - USD ($) | Jan. 02, 2015 | Jan. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Stock Plans | |||||
Shares of common stock reserved for future issuance | 3,092,244 | 2,521,120 | |||
Stock Option | |||||
Share-based compensation | |||||
Share price (in dollar per share) | $ 4.90 | ||||
Unrecognized compensation cost, period of recognition | 2 years 1 month 6 days | 3 years | |||
Unrecognized compensation cost | $ 4,000,000 | $ 7,000,000 | |||
Stock options, additional disclosures | |||||
Granted (in dollars per share) | $ 6.68 | $ 12.97 | $ 4.70 | ||
Share price (in dollar per share) | $ 4.90 | ||||
Proceeds from exercise of stock options | $ 6,500 | $ 54,200 | $ 52,300 | ||
Total intrinsic value of options exercised | 78,000 | 800,000 | 84,000 | ||
Total fair value of options vested during the year | $ 3,400,000 | $ 800,000 | $ 1,200,000 | ||
Stock Option | Year One | |||||
Stock Plans | |||||
Grants vesting period | 1 year | ||||
Grants vesting (as a percent) | 25.00% | ||||
Stock Option | Thereafter | |||||
Stock Plans | |||||
Grants vesting period | 36 months | ||||
ESPP | |||||
Stock Plans | |||||
Shares of common stock reserved for future issuance | 183,462 | 261,840 | 168,453 | ||
Percentage of total number of shares of common stock outstanding | 1.00% | ||||
Share-based compensation | |||||
Percentage of eligible compensation | 15.00% | ||||
Stock options, additional disclosures | |||||
Number of shares that could potentially be issued | 366,925 | ||||
2011 Equity Incentive Plan | Stock Option | |||||
Stock Plans | |||||
Maximum term of options granted | 10 years | ||||
Grants vesting period | 48 months | ||||
2015 Equity Incentive Plan | |||||
Stock Plans | |||||
Maximum term of options granted | 10 years | ||||
Shares of common stock reserved for future issuance | 801,033 | 749,753 | 507,345 | ||
Percentage of total number of shares of common stock outstanding | 4.00% | ||||
Additional shares to be used exclusively for grant for Inducement awards | 500,000 | ||||
2015 Equity Incentive Plan | Restricted Stock Units | |||||
Share-based compensation | |||||
Aggregate intrinsic value of outstanding units | $ 1,500,000 | ||||
Share price (in dollar per share) | $ 4.90 | ||||
Unrecognized compensation cost related to outstanding units | $ 1,700,000 | ||||
Unrecognized compensation cost, period of recognition | 2 years 9 months 18 days | ||||
Stock options, additional disclosures | |||||
Granted (in dollars per share) | $ 7.70 | ||||
Share price (in dollar per share) | $ 4.90 | ||||
2015 Equity Incentive Plan | Restricted Stock Units | Board of Directors | |||||
Share-based compensation | |||||
Total fair value of the units | $ 0 |
Stockholders' Equity (Deficit43
Stockholders' Equity (Deficit) - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units - 2015 Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Options | |
Granted (in shares) | shares | 306,780 |
Balance (in shares) | shares | 306,780 |
Weighted Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 7.70 |
Balance (in dollars per share) | $ / shares | $ 7.70 |
Stockholders' Equity (Deficit44
Stockholders' Equity (Deficit) - Summary of Stock Option Activity (Details) - Stock Option | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Options | |
Balance (in shares) | shares | 1,788,149 |
Granted (in shares) | shares | 107,747 |
Exercised (in shares) | shares | (9,300) |
Forfeited (in shares) | shares | (169,898) |
Balance (in shares) | shares | 1,716,698 |
Weighted-Average Exercise Price | |
Balance (in dollars per share) | $ / shares | $ 7.76 |
Granted (in dollars per share) | $ / shares | 6.68 |
Exercised (in dollars per share) | $ / shares | 0.70 |
Forfeited (in dollars per share) | $ / shares | 9.71 |
Balance (in dollars per share) | $ / shares | $ 7.54 |
Stockholders' Equity (Deficit45
Stockholders' Equity (Deficit) - Summary of Company's Outstanding Stock Option (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | ||
Number of shares, options vested and expected to vest | 2,023,478 | 1,788,149 |
Stock Option | ||
Number of Options | ||
Balance (in shares) | 1,788,149 | |
Number of shares, options vested and expected to vest | 1,716,698 | |
Number of shares, options exercisable | 1,115,178 | |
Aggregate intrinsic value, options outstanding | $ 2,241 | |
Aggregate intrinsic value, options vested and expected to vest | 2,241 | |
Aggregate intrinsic value, options exercisable | $ 2,162 | |
Weighted-Average Exercise Price | ||
Balance (in shares) | $ 7.54 | $ 7.76 |
Weighted-average exercise price, options vested and expected to vest (in dollars per share) | 7.54 | |
Weighted-average exercise price, options exercisable (in dollars per share) | $ 6.04 | |
Weighted-average remaining contractual term, options outstanding (in years) | 7 years 4 months 2 days | |
Weighted-average remaining contractual term, options vested and expected to vest (in years) | 7 years 4 months 2 days | |
Weighted-average remaining contractual term, options exercisable (in years) | 6 years 10 months 2 days |
Stockholders' Equity (Deficit46
Stockholders' Equity (Deficit) - Summary of Weighted-Average Assumptions Fair Value of the Employee Stock Option Grants (Details) - Stock Option | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Class Of Stock [Line Items] | |||
Risk-free interest rate | 1.60% | 1.70% | 1.90% |
Expected volatility | 80.00% | 74.00% | 76.00% |
Expected term (in years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 3 months 18 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stockholders' Equity (Deficit47
Stockholders' Equity (Deficit) - Summary of Allocation of Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Class Of Stock [Line Items] | |||
Stock based compensation expense | $ 3,083 | $ 2,088 | $ 271 |
Research and development | |||
Class Of Stock [Line Items] | |||
Stock based compensation expense | 1,090 | 1,038 | 178 |
General and administrative | |||
Class Of Stock [Line Items] | |||
Stock based compensation expense | $ 1,993 | $ 1,050 | $ 93 |
Stockholders' Equity (Deficit48
Stockholders' Equity (Deficit) - Summary of Common Stock Reserved For Future Issuance (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 02, 2015 |
Stock Plans | |||
Shares of common stock reserved for future issuance | 3,092,244 | 2,521,120 | |
Number of shares, options vested and expected to vest | 2,023,478 | 1,788,149 | |
2015 Equity Incentive Plan | |||
Stock Plans | |||
Shares of common stock reserved for future issuance | 749,753 | 507,345 | 801,033 |
Common Stock. | Warrants | |||
Stock Plans | |||
Shares of common stock reserved for future issuance | 57,173 | 57,173 | |
ESPP | |||
Stock Plans | |||
Shares of common stock reserved for future issuance | 261,840 | 168,453 | 183,462 |
Collaborations - Additional Inf
Collaborations - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2014 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Contracts Revenue | $ 617,000 | $ 815,000 | $ 807,000 | $ 1,210,000 | $ 1,395,000 | $ 1,180,000 | $ 4,197,000 | $ 1,132,000 | $ 3,449,000 | $ 7,904,000 | $ 3,598,000 | |
Janssen | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
License and Option Agreement termination description | The License and Option Agreement may be terminated for uncured breach, bankruptcy, or the failure or inability to demonstrate clinical proof of concept with respect to a particular Program during specified timeframes. In addition, the License and Option Agreement will automatically terminate (a) with respect to the AR Mutant Program, upon Janssen exercising its option in respect of the AR Mutant Program and making payment of the option exercise fee to the Company or, if Janssen does not exercise the option, upon the expiration of all payment obligations of the Company to Janssen with respect of the AR Mutant Program, and (b) with respect to the NIK Program, upon the Company and Janssen entering into an exclusive license agreement following Janssen’s exercise of its right of first negotiation or, if Janssen’s right of first negotiation with respect to the NIK Program expires and the Company and Janssen have not entered into an exclusive license agreement, upon the expiration of all payment obligations of the Company to Janssen with respect of the NIK Program. The Company may also terminate a Program or the Agreement in its entirety without cause, subject to specified conditions. | |||||||||||
Janssen | License and Option Agreement | AR Mutant Program | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Exercisable period | 90 days | |||||||||||
License and option agreement terms | Janssen will be obligated to pay the Company (i) a one-time option exercise fee of $45.0 million; (ii) regulatory and commercial based milestone payments totaling up to $137.5 million upon achievement of specified events; and (iii) royalties in the low single digits on annual net sales of AR Mutant Program products. | |||||||||||
One-time option exercise fee | $ 45,000,000 | |||||||||||
Regulatory and commercial based milestone payments | 137,500,000 | |||||||||||
Development and regulatory based milestone payments | $ 45,000,000 | |||||||||||
Janssen | License and Option Agreement | NIK Program | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Exercisable period | 90 days | |||||||||||
License and option agreement terms | The Company would be obligated to pay Janssen (i) development and regulatory based milestone payments totaling up to $60.0 million upon achievement of specified events, and (ii) royalties in the low single digits based on annual net sales of NIK Program products, subject to certain specified reductions. | |||||||||||
Development and regulatory based milestone payments | $ 60,000,000 | |||||||||||
Consideration exchanged for assets acquired | 0 | |||||||||||
Value given to assets acquired | 0 | $ 0 | ||||||||||
Collaborative Arrangement | Santen | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
One-time upfront fee | $ 10,000,000 | |||||||||||
Period for recognition of revenue | 43 months | 31 months | ||||||||||
Potential milestone that could be received | 155,000,000 | |||||||||||
Balance of potential milestone that could be received | 145,000,000 | $ 145,000,000 | ||||||||||
Royalty continuation term | 12 years | |||||||||||
Cure period for bankruptcy or dissolution | 90 days | |||||||||||
Cure period for breach of payment | 30 days | |||||||||||
Contracts Revenue | $ 3,400,000 | $ 7,900,000 | ||||||||||
Deferred revenue | 1,300,000 | $ 3,400,000 | 1,300,000 | 3,400,000 | ||||||||
Collaborative Arrangement | Santen | Development Milestones | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Potential milestone that could be received | 20,000,000 | |||||||||||
Collaborative Arrangement | Santen | Regulatory Milestones | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Potential milestone that could be received | 52,500,000 | |||||||||||
Collaborative Arrangement | Santen | Commercialization Milestones | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Potential milestone that could be received | $ 82,500,000 | |||||||||||
Revenue recognized upon achievement of milestone | 10,000,000 | |||||||||||
Aggregate milestone revenue recognized | $ 3,000,000 | |||||||||||
Collaborative Arrangement | Santen | Change in Accounting Estimate | ||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||
Change in accounting estimate increase in net loss | $ 600,000 | $ 1,300,000 | ||||||||||
Change in accounting estimate increase in net loss (in dollars per share) | $ 0.04 | $ 0.10 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Effective Tax Rate and Federal Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of effective tax rate and federal statutory tax rate | |||
Federal income taxes | $ (9,453) | $ (8,300) | $ (2,315) |
State income taxes, net of federal benefit | (381) | ||
Permanent items | 717 | 277 | 59 |
Uncertain tax positions | 1,644 | 749 | |
Research and development credits | (2,078) | (881) | (252) |
California net operating loss carryforwards | (1,054) | ||
Rate change | (489) | ||
Other, net | 5 | 82 | 18 |
Change in valuation allowance | $ 10,708 | $ 8,073 | $ 2,871 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 24,484 | $ 14,950 |
Research and development credits | 3,262 | 1,606 |
Deferred revenue | 441 | 1,140 |
Depreciation and amortization | 229 | 121 |
Other, net | 1,753 | 818 |
Total deferred tax assets | 30,169 | 18,635 |
Valuation allowance | $ (30,169) | $ (18,635) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Carryforwards | |||
Net change in the total valuation allowance | $ 10,700,000 | $ 8,100,000 | $ 2,900,000 |
Accrual for interest or penalties for unrecognized tax benefits | 0 | $ 0 | |
Income tax interest or penalties expense for unrecognized tax benefits | $ 0 | ||
Minimum | |||
Carryforwards | |||
Percent of ownership | 50.00% | ||
Federal | |||
Carryforwards | |||
NOL carryforward | $ 69,100,000 | ||
NOL carryforward begin to expire | 2,030 | ||
Federal | Research and Development Credit Carryforwards | |||
Carryforwards | |||
Credit carryforward | $ 3,600,000 | ||
Credit carryforward begin to expire | 2,031 | ||
California | |||
Carryforwards | |||
NOL carryforward | $ 44,000,000 | ||
NOL carryforward begin to expire | 2,030 | ||
California | Research and Development Credit Carryforwards | |||
Carryforwards | |||
Credit carryforward | $ 1,100,000 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unrecognized tax benefits | |||
Balance, beginning of period | $ 1,822 | $ 369 | $ 277 |
Increase related to prior year positions | 1,902 | 1,135 | |
Increase related to current year positions | 453 | 318 | 92 |
Balance, end of period | $ 4,177 | $ 1,822 | $ 369 |
401(k) Plan - Additional Inform
401(k) Plan - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure | |||
Defined contribution amount | $ 172,000 | $ 107,000 | $ 73,000 |
Quarterly Financial Data (Una55
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Data - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Information | |||||||||||
Revenue | $ 617 | $ 815 | $ 807 | $ 1,210 | $ 1,395 | $ 1,180 | $ 4,197 | $ 1,132 | $ 3,449 | $ 7,904 | $ 3,598 |
Total operating expenses | 6,692 | 6,412 | 8,817 | 7,504 | 12,231 | 7,415 | 6,881 | 4,844 | 29,425 | 31,371 | 9,777 |
Consolidated net loss | $ (6,314) | $ (5,871) | $ (8,297) | $ (6,526) | $ (11,047) | $ (6,447) | $ (2,921) | $ (4,026) | $ (27,008) | $ (24,410) | $ (6,809) |
Basic and diluted net loss attributable to common stockholders | $ (0.45) | $ (0.48) | $ (0.68) | $ (0.54) | $ (0.91) | $ (0.53) | $ (0.24) | $ (0.50) | $ (2.13) | $ (2.20) | $ (4.40) |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | Feb. 22, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | ||
Long-term manufacturing agreement description | Either party may terminate the Manufacturing Agreement due to a material breach of the Manufacturing Agreement by the other party, subject to prior written notice and a cure period, due to the insolvency or bankruptcy of the other party, due to a force majeure event that prevents performance under the Manufacturing Agreement for at least six months, or if the parties fail to enter into an initial project plan within 90 days of the date of the Manufacturing Agreement (which period may be extended by mutual agreement of the parties). The Company may terminate the Manufacturing Agreement, subject to 60 days’ written notice, if the Company discontinues the TRC105 program, whether due to a notice of non-approval or withdrawal of marketing approval by a regulatory agency or otherwise. In the event of a termination by the Company due to discontinuation of the TRC105 program or a termination by Lonza due to the Company’s material breach or insolvency or bankruptcy, the Company would be obligated to pay to Lonza certain batch cancellation and/or early termination fees. | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Long-term manufacturing agreement, executed period | 90 days | |
Prior written notice for termination on the breach of agreement period | 60 days | |
Subsequent Event | Prior to Approval | ||
Subsequent Event [Line Items] | ||
Long-Term manufacturing agreement for lead purchase of product candidate batches estimated annual cost | $ 15 | |
Subsequent Event | Regulatory Approval | ||
Subsequent Event [Line Items] | ||
Long-Term manufacturing agreement for lead purchase of product candidate batches estimated annual cost | $ 22 |