Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Tracon Pharmaceuticals, Inc. | |
Entity Central Index Key | 1,394,319 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 17,511,928 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TCON |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 32,864 | $ 35,710 |
Short-term investments | 3,000 | 8,703 |
Prepaid and other assets | 1,441 | 1,235 |
Total current assets | 37,305 | 45,648 |
Property and equipment, net | 71 | 82 |
Total assets | 37,376 | 45,730 |
Current liabilities: | ||
Accounts payable and accrued expenses | 6,505 | 6,213 |
Accrued compensation and related expenses | 1,325 | 1,588 |
Current portion of deferred revenue | 1,259 | |
Long-term debt, current portion | 1,994 | 333 |
Final payment due bank | 850 | |
Total current liabilities | 9,824 | 10,243 |
Other long-term liabilities | 407 | 21 |
Long-term debt, less current portion | 5,329 | 7,130 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, authorized shares — 10,000,000 at September 30, 2017 and December 31, 2016; issued and outstanding shares — none | ||
Common stock, $0.001 par value; authorized shares — 200,000,000 at September 30, 2017 and December 31, 2016; issued and outstanding shares — 17,393,056 and 16,084,721 at September 30, 2017 and December 31, 2016, respectively | 17 | 16 |
Additional paid-in capital | 119,940 | 113,918 |
Accumulated deficit | (98,141) | (85,598) |
Total stockholders’ equity | 21,816 | 28,336 |
Total liabilities and stockholders’ equity | $ 37,376 | $ 45,730 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
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 | 17,393,056 | 16,084,721 |
Common stock, shares outstanding | 17,393,056 | 16,084,721 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Collaboration revenue | $ 7,498 | $ 815 | $ 8,755 | $ 2,832 |
Operating expenses: | ||||
Research and development | 4,257 | 4,531 | 14,732 | 16,799 |
General and administrative | 1,847 | 1,881 | 5,879 | 5,934 |
Total operating expenses | 6,104 | 6,412 | 20,611 | 22,733 |
Income (loss) from operations | 1,394 | (5,597) | (11,856) | (19,901) |
Other income (expense): | ||||
Interest expense, net | (223) | (287) | (681) | (871) |
Other income (expense), net | (1) | 13 | (6) | 78 |
Total other income (expense) | (224) | (274) | (687) | (793) |
Net income (loss) | $ 1,170 | $ (5,871) | $ (12,543) | $ (20,694) |
Net income (loss) per share, basic and diluted | $ 0.07 | $ (0.48) | $ (0.76) | $ (1.70) |
Weighted-average shares outstanding, basic | 16,828,801 | 12,227,081 | 16,550,730 | 12,200,628 |
Weighted-average shares outstanding, diluted | 17,137,311 | 12,227,081 | 16,550,730 | 12,200,628 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (12,543) | $ (20,694) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 2,398 | 2,339 |
Common stock issued for services | 29 | |
Depreciation and amortization | 41 | 70 |
Amortization of debt discount | 86 | 77 |
Amortization of premium/discount on short-term investments | (6) | 4 |
Noncash interest | 267 | 403 |
Deferred rent | 54 | (38) |
Deferred revenue | (1,259) | (1,604) |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | (206) | (128) |
Accounts payable and accrued expenses | 468 | (1,619) |
Accrued compensation and related expenses | (263) | 25 |
Net cash used in operating activities | (10,934) | (21,165) |
Cash flows from investing activities | ||
Purchase of property and equipment | (30) | (3) |
Purchases of available-for-sale short-term investments | (8,994) | (8,802) |
Proceeds from the maturity of available-for-sale short-term investments | 14,705 | 14,117 |
Net cash provided by investing activities | 5,681 | 5,312 |
Cash flows from financing activities | ||
Proceeds from long-term debt | 8,000 | |
Repayment of long-term debt | (8,850) | (1,000) |
Proceeds from sale of common stock | 3,610 | 5,000 |
Costs paid in connection with sales of common stock | (339) | |
Proceeds from issuance of common stock under equity plans | 123 | 128 |
Payment of tax withholdings related to net share settlements of vested restricted stock awards | (137) | |
Net cash provided by financing activities | 2,407 | 4,128 |
Decrease in cash and cash equivalents | (2,846) | (11,725) |
Cash and cash equivalents at beginning of period | 35,710 | 41,373 |
Cash and cash equivalents at end of period | $ 32,864 | $ 29,648 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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, wet age-related macular degeneration and fibrotic diseases. The Company’s lead product candidate is an antibody that binds 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 unaudited condensed 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 and Going Concern As of September 30, 2017, 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 September 30, 2017, the Company had an accumulated deficit of $98.1 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 September 30, 2017, the Company had cash, cash equivalents and short-term investments of $35.9 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 through mid-2018. The Company’s ability to execute its operating plan beyond mid-2018 depends on its ability to obtain additional funding through equity offerings, debt financings or potential licensing and collaboration arrangements. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. However, the Company’s current working capital, anticipated operating expenses and net losses and the uncertainties surrounding its ability to raise additional capital as needed, as discussed below, raise substantial doubt about its ability to continue as a going concern for a period of one year following the date that these financial statements are issued. The condensed consolidated financial statements do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to continue to fund its losses from operations through cash, cash equivalents and investments on hand, as well as through future equity offerings, debt financings, other third party funding, and potential licensing or collaboration arrangements, including equity financing through the common stock purchase agreement the Company entered into with Aspire Capital Fund, LLC in March 2017 for the purchase of up to $21.0 million of the Company’s stock over a 30 month period and/or the at-the-market equity offering sales agreement the Company entered into with Stifel, Nicolaus & Company, Incorporated in February 2016 for the sale of up to $25.0 million of the Company’s stock. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to the Company. Even if the Company raises additional capital, it may also be required to modify, delay or abandon some of its plans which could have a material adverse effect on the Company’s business, operating results and financial condition and the Company’s ability to achieve its intended business objectives. Any of these actions could materially harm the Company’s business, results of operations and future prospects. Unaudited Interim Financial Information The unaudited condensed consolidated financial statements at September 30, 2017, and for the three and nine months ended September 30, 2017 and 2016, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and with accounting principles generally accepted in the United States (GAAP) applicable to interim financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year or future periods. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2016, included in its Annual Report on Form 10-K filed with the SEC on March 1, 2017. Use of Estimates The Company’s condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of the Company’s condensed 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, expenses incurred for clinical trials 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. 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. 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, clinical sites, contract research organizations (CROs), and consultants 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 clinical trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through discussion with the clinical sites and 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 clinical sites, 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 and nine months ended September 30, 2017 and 2016, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. 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. 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. Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Net income (loss) and comprehensive income (loss) were the same for all periods presented. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average shares of common stock outstanding for the period, as adjusted for the weighted-average number of common shares outstanding that are subject to repurchase. The Company has excluded 3,368 and 6,980 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the three and nine months ended September 30, 2017, respectively, and 7,013 and 5,663 weighted-average shares subject to repurchase for the three and nine months ended September 30, 2016, respectively. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding and the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method. The following table sets forth a reconciliation of basic and diluted net income (loss) per share (in thousands, except share and per share amount): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net income (loss) $ 1,170 $ (5,871 ) $ (12,543 ) $ (20,694 ) Denominator: Weighted average common shares outstanding for basic 16,828,801 12,227,081 16,550,730 12,200,628 Dilutive potential common stock outstanding: Stock options 308,510 — — — Weighted average common shares outstanding for diluted 17,137,311 12,227,081 16,550,730 12,200,628 Basic and diluted net income (loss) per share $ 0.07 $ (0.48 ) $ (0.76 ) $ (1.70 ) Potentially dilutive securities not included in the calculation of diluted net income (loss) per share because to do so would be anti-dilutive are as follows (in common share equivalents): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Warrants to purchase common stock 103,865 57,173 103,865 57,173 Common stock options and RSUs 1,993,207 1,977,988 2,506,246 1,977,988 ESPP shares — — 4,871 3,079 2,097,072 2,035,161 2,614,982 2,038,240 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, Leases Recently Adopted Accounting Standards In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting |
Short-Term Investments, Cash Eq
Short-Term Investments, Cash Equivalents and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Short-Term Investments, Cash Equivalents and Fair Value Measurements | 2. Short-Term Investments, Cash Equivalents and Fair Value Measurements At September 30, 2017, short-term investments consisted of 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. 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 September 30, 2017, 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): September 30, 2017 December 31, 2016 Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 7,463 $ — $ — $ 7,463 $ 3,188 $ — $ — $ 3,188 Certificates of deposit — — — — 3,655 — — 3,655 U.S. treasury securities 3,000 — — 3,000 16,503 — — 16,503 $ 10,463 $ — $ — $ 10,463 $ 23,346 $ — $ — $ 23,346 Classified as: Cash equivalents $ 7,463 $ 14,643 Short-term investments 3,000 8,703 Total cash equivalents and short-term investments $ 10,463 $ 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 September 30, 2017 U.S. treasury securities and money market funds, included in cash equivalents and short-term investments $ 10,463 $ — $ 10,463 $ — At December 31, 2016 Certificates of deposit, U.S. treasury securities and money market funds, included in cash equivalents and short-term investments $ 23,346 $ — $ 23,346 $ — |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consisted of the following (in thousands): September 30, December 31, 2017 2016 Computer and office equipment $ 124 $ 115 Furniture and fixtures 19 19 Leasehold improvements 21 124 164 258 Less accumulated depreciation and amortization (93 ) (176 ) $ 71 $ 82 Depreciation expense related to property and equipment totaled approximately $7,000 and $23,000 for the three months ended September 30, 2017 and 2016, respectively, and $41,000 and $70,000 for the nine months ended September 30, 2017 and 2016, respectively. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt Long-term debt and unamortized debt discount balances were as follows (in thousands): September 30, December 31, 2017 2016 Long-term debt $ 8,000 $ 8,000 Less debt discount, net of current portion (271 ) (537 ) Long-term debt, net of debt discount 7,729 7,463 Less current portion of long-term debt (2,400 ) (333 ) Long-term debt, net of current portion $ 5,329 $ 7,130 Current portion of long-term debt $ 2,400 $ 333 Current portion of debt discount (406 ) — Current portion of long-term debt, net $ 1,994 $ 333 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 $8.0 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 transaction was accounted for as a debt modification. The 2017 Amended SVB Loan provides for interest to be paid at a rate of 8.55% per annum. 30 months. 4.0% The 2017 Amended SVB Loan provides for prepayment fees of 3.0% of the outstanding balance of the loan if the loan is repaid prior to January 26, 2018, 2.0% 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. 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. In connection with the 2017 Amended SVB Loan, 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. The fair value of the warrant and the final payment related to the 2017 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 2015 Amended SVB Loan. At September 30, 2017, the Company had 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 January 25, 2024 46,692 $ 5.14 103,865 Future minimum principal and interest payments under the 2017 Amended SVB Loan, including the final payment, as of September 30, 2017 are as follows (in thousands): Remaining 2017 $ 172 2018 3,766 2019 3,489 2020 1,961 9,388 Less interest and final payment (1,388 ) Long-term debt $ 8,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Lonza Biologics Tuas Pte Ltd (Lonza) On February 22, 2017, the Company entered into a long-term manufacturing agreement, or the Manufacturing Agreement, with 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, or due to a force majeure event that prevents performance under the Manufacturing Agreement for at least six months. 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. 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/or sublicensing fees. Each of the license agreements is generally cancelable by the Company, given appropriate prior written notice. At September 30, 2017, potential future milestone payments under these agreements, including future milestone payments associated with assets acquired from Janssen Pharmaceutica N.V. should they not exercise their option to regain their rights to certain assets as discussed in Note 7, |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 6. Stockholders’ Equity Sales of Common Stock In March 2017, the Company entered into a Common Stock Purchase Agreement (the Purchase Agreement) with Aspire Capital Fund, LLC (Aspire Capital) which provides that, upon the terms and subject to the conditions and limitations, Aspire Capital is committed to purchase up to an aggregate of $21.0 million of shares of the Company’s common stock. 222,222 shares of the Company’s common stock to Aspire Capital at $4.50 per share for net proceeds of approximately $0.9 million upon execution of the Purchase Agreement and . In consideration for entering into the Purchase Agreement and concurrently with the execution of the Purchase Agreement, the Company issued 195,726 shares of its common stock to Aspire Capital In February 2016, the Company entered into an At-the-Market Equity Offering Sales Agreement (Sales Agreement) with Stifel, Nicolaus & Company, Incorporated (Stifel), pursuant to which it may sell from time to time, at its option, up to an aggregate of $25.0 million of the Company’s shares of its common stock through Stifel, as sales agent. The Company is required to pay Stifel 2.5% of gross proceeds for the common stock sold through the Sales Agreement. During the three and nine months ended September 30, 2017, the Company sold approximately 737,000 shares of common stock through the Sales Agreement with Stifel for gross proceeds of approximately $2.6 million, and approximately $22.4 million of common stock remains available for sale under the Sales Agreement, subject to limitations on the amount of securities the Company may sell under its effective registration statement on Form S-3 within any 12 month period. During the nine months ended September 30, 2017, t he Company issued 53,756 shares of common stock upon the exercise of outstanding stock options and 74,044 shares of common stock upon the vesting of restricted stock units. The Company withheld shares of common stock on the vesting date of certain restricted stock units to settle the employees’ minimum statutory tax obligations for income and other related employment taxes, the payment of which is reported as a financing activity in the unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2017. During the year ended December 31, 2016, the Company issued 9,300 shares of common stock upon the exercise of outstanding stock options. 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: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Risk-free interest rate — % — % 2.1 % 1.6 % Expected volatility — % — % 83 % 78 % Expected term (in years) — — 6.2 6.3 Expected dividend yield — % — % — % — % No stock options were granted to employees during the three months ended September 30, 2017 and 2016. Stock compensation expense for the ESPP was immaterial for the three and nine months ended September 30, 2017. The allocation of stock-based compensation expense is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Research and development $ 379 $ 85 $ 1,104 $ 795 General and administrative 418 453 1,294 1,544 $ 797 $ 538 $ 2,398 $ 2,339 |
Collaborations
Collaborations | 9 Months Ended |
Sep. 30, 2017 | |
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 were delivered during the 41-month period over which the Company provided technical and regulatory support to Santen. At inception and through September 30, 2017, 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 recognized revenue for the fixed or determinable collaboration consideration on a straight-line basis over the 41-month period over which it delivered its technical and regulatory support. 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. During the nine months ended September 30, 2017 and the year ended December 31, 2015, development milestones that were deemed substantive milestones at the inception of the arrangement were achieved, and accordingly, the milestone payments of $7.0 million and $3.0 million, respectively, were recognized as revenue. The remaining $145.0 million of potential milestone payments are not substantive milestones as they do not require the efforts of the Company. 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 $7.5 million and $0.8 million for the three months ended September 30, 2017 and 2016, respectively, and $8.8 million and $2.8 million for the nine months ended September 30, 2017 and 2016, respectively. Janssen Pharmaceutica N.V. (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 on the acquisition date, no value was 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 License and Option Agreement in its entirety without cause, subject to specified conditions. |
Organization and Summary of S13
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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, wet age-related macular degeneration and fibrotic diseases. The Company’s lead product candidate is an antibody that binds 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 unaudited condensed 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 and Going Concern | Basis of Presentation and Going Concern As of September 30, 2017, 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 September 30, 2017, the Company had an accumulated deficit of $98.1 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 September 30, 2017, the Company had cash, cash equivalents and short-term investments of $35.9 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 through mid-2018. The Company’s ability to execute its operating plan beyond mid-2018 depends on its ability to obtain additional funding through equity offerings, debt financings or potential licensing and collaboration arrangements. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business. However, the Company’s current working capital, anticipated operating expenses and net losses and the uncertainties surrounding its ability to raise additional capital as needed, as discussed below, raise substantial doubt about its ability to continue as a going concern for a period of one year following the date that these financial statements are issued. The condensed consolidated financial statements do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to continue to fund its losses from operations through cash, cash equivalents and investments on hand, as well as through future equity offerings, debt financings, other third party funding, and potential licensing or collaboration arrangements, including equity financing through the common stock purchase agreement the Company entered into with Aspire Capital Fund, LLC in March 2017 for the purchase of up to $21.0 million of the Company’s stock over a 30 month period and/or the at-the-market equity offering sales agreement the Company entered into with Stifel, Nicolaus & Company, Incorporated in February 2016 for the sale of up to $25.0 million of the Company’s stock. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to the Company. Even if the Company raises additional capital, it may also be required to modify, delay or abandon some of its plans which could have a material adverse effect on the Company’s business, operating results and financial condition and the Company’s ability to achieve its intended business objectives. Any of these actions could materially harm the Company’s business, results of operations and future prospects. Unaudited Interim Financial Information The unaudited condensed consolidated financial statements at September 30, 2017, and for the three and nine months ended September 30, 2017 and 2016, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and with accounting principles generally accepted in the United States (GAAP) applicable to interim financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of only normal recurring accruals, which in the opinion of management are necessary to present fairly the Company’s financial position as of the interim date and results of operations for the interim periods presented. Interim results are not necessarily indicative of results for a full year or future periods. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2016, included in its Annual Report on Form 10-K filed with the SEC on March 1, 2017. |
Use of Estimates | Use of Estimates The Company’s condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of the Company’s condensed 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, expenses incurred for clinical trials 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. |
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. 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, clinical sites, contract research organizations (CROs), and consultants 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 clinical trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through discussion with the clinical sites and 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 clinical sites, 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 and nine months ended September 30, 2017 and 2016, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. |
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. 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. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Net income (loss) and comprehensive income (loss) were the same for all periods presented. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average shares of common stock outstanding for the period, as adjusted for the weighted-average number of common shares outstanding that are subject to repurchase. The Company has excluded 3,368 and 6,980 weighted-average shares subject to repurchase or forfeiture from the weighted-average number of common shares outstanding for the three and nine months ended September 30, 2017, respectively, and 7,013 and 5,663 weighted-average shares subject to repurchase for the three and nine months ended September 30, 2016, respectively. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding and the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method. The following table sets forth a reconciliation of basic and diluted net income (loss) per share (in thousands, except share and per share amount): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net income (loss) $ 1,170 $ (5,871 ) $ (12,543 ) $ (20,694 ) Denominator: Weighted average common shares outstanding for basic 16,828,801 12,227,081 16,550,730 12,200,628 Dilutive potential common stock outstanding: Stock options 308,510 — — — Weighted average common shares outstanding for diluted 17,137,311 12,227,081 16,550,730 12,200,628 Basic and diluted net income (loss) per share $ 0.07 $ (0.48 ) $ (0.76 ) $ (1.70 ) Potentially dilutive securities not included in the calculation of diluted net income (loss) per share because to do so would be anti-dilutive are as follows (in common share equivalents): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Warrants to purchase common stock 103,865 57,173 103,865 57,173 Common stock options and RSUs 1,993,207 1,977,988 2,506,246 1,977,988 ESPP shares — — 4,871 3,079 2,097,072 2,035,161 2,614,982 2,038,240 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, Leases |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting |
Organization and Summary of S14
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization And Accounting Policies [Abstract] | |
Reconciliation of basic and diluted net income (loss) per share | The following table sets forth a reconciliation of basic and diluted net income (loss) per share (in thousands, except share and per share amount): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net income (loss) $ 1,170 $ (5,871 ) $ (12,543 ) $ (20,694 ) Denominator: Weighted average common shares outstanding for basic 16,828,801 12,227,081 16,550,730 12,200,628 Dilutive potential common stock outstanding: Stock options 308,510 — — — Weighted average common shares outstanding for diluted 17,137,311 12,227,081 16,550,730 12,200,628 Basic and diluted net income (loss) per share $ 0.07 $ (0.48 ) $ (0.76 ) $ (1.70 ) |
Schedule of potentially dilutive securities not included in the calculation of diluted net income (loss) per share | Potentially dilutive securities not included in the calculation of diluted net income (loss) per share because to do so would be anti-dilutive are as follows (in common share equivalents): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Warrants to purchase common stock 103,865 57,173 103,865 57,173 Common stock options and RSUs 1,993,207 1,977,988 2,506,246 1,977,988 ESPP shares — — 4,871 3,079 2,097,072 2,035,161 2,614,982 2,038,240 |
Short-Term Investments, Cash 15
Short-Term Investments, Cash Equivalents and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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): September 30, 2017 December 31, 2016 Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 7,463 $ — $ — $ 7,463 $ 3,188 $ — $ — $ 3,188 Certificates of deposit — — — — 3,655 — — 3,655 U.S. treasury securities 3,000 — — 3,000 16,503 — — 16,503 $ 10,463 $ — $ — $ 10,463 $ 23,346 $ — $ — $ 23,346 Classified as: Cash equivalents $ 7,463 $ 14,643 Short-term investments 3,000 8,703 Total cash equivalents and short-term investments $ 10,463 $ 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 September 30, 2017 U.S. treasury securities and money market funds, included in cash equivalents and short-term investments $ 10,463 $ — $ 10,463 $ — At December 31, 2016 Certificates of deposit, U.S. treasury securities and money market funds, included in cash equivalents and short-term investments $ 23,346 $ — $ 23,346 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): September 30, December 31, 2017 2016 Computer and office equipment $ 124 $ 115 Furniture and fixtures 19 19 Leasehold improvements 21 124 164 258 Less accumulated depreciation and amortization (93 ) (176 ) $ 71 $ 82 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt and unamortized debt discount balances | Long-term debt and unamortized debt discount balances were as follows (in thousands): September 30, December 31, 2017 2016 Long-term debt $ 8,000 $ 8,000 Less debt discount, net of current portion (271 ) (537 ) Long-term debt, net of debt discount 7,729 7,463 Less current portion of long-term debt (2,400 ) (333 ) Long-term debt, net of current portion $ 5,329 $ 7,130 Current portion of long-term debt $ 2,400 $ 333 Current portion of debt discount (406 ) — Current portion of long-term debt, net $ 1,994 $ 333 |
Schedule of exercisable outstanding warrants for purchase of common stock issued | At September 30, 2017, the Company had 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 January 25, 2024 46,692 $ 5.14 103,865 |
Schedule of future minimum principal and interest payments | Future minimum principal and interest payments under the 2017 Amended SVB Loan, including the final payment, as of September 30, 2017 are as follows (in thousands): Remaining 2017 $ 172 2018 3,766 2019 3,489 2020 1,961 9,388 Less interest and final payment (1,388 ) Long-term debt $ 8,000 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
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: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Risk-free interest rate — % — % 2.1 % 1.6 % Expected volatility — % — % 83 % 78 % Expected term (in years) — — 6.2 6.3 Expected dividend yield — % — % — % — % |
Summary of allocation of stock-based compensation expense | The allocation of stock-based compensation expense is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Research and development $ 379 $ 85 $ 1,104 $ 795 General and administrative 418 453 1,294 1,544 $ 797 $ 538 $ 2,398 $ 2,339 |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Feb. 29, 2016 | |
Basis of Presentation | |||||||
Accumulated deficit | $ (98,141,000) | $ (98,141,000) | $ (85,598,000) | ||||
Cash, cash equivalents and short-term investments | $ 35,900,000 | $ 35,900,000 | |||||
Weighted-average shares subject to repurchase or forfeiture (in shares) | 3,368 | 7,013 | 6,980 | 5,663 | |||
Stifel, Nicolaus & Company, Incorporated | At-the-Market Equity Offering Sales Agreement | Common Stock | |||||||
Basis of Presentation | |||||||
Maximum aggregate value of stock to be sold | $ 25,000,000 | ||||||
Aspire Capital | Common Stock | |||||||
Basis of Presentation | |||||||
Maximum aggregate value of stock to be purchase | $ 21,000,000 | ||||||
Sale duration for common stock under purchase agreement | 30 months |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies - Reconciliation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income (loss) | $ 1,170 | $ (5,871) | $ (12,543) | $ (20,694) |
Denominator: | ||||
Weighted average common shares outstanding for basic | 16,828,801 | 12,227,081 | 16,550,730 | 12,200,628 |
Dilutive potential common stock outstanding: | ||||
Stock options | 308,510 | |||
Weighted average common shares outstanding for diluted | 17,137,311 | 12,227,081 | 16,550,730 | 12,200,628 |
Basic and diluted net income (loss) per share | $ 0.07 | $ (0.48) | $ (0.76) | $ (1.70) |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Not Included in the Calculation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive securities | ||||
Antidilutive securities | 2,097,072 | 2,035,161 | 2,614,982 | 2,038,240 |
Warrants to Purchase Common Stock | ||||
Antidilutive securities | ||||
Antidilutive securities | 103,865 | 57,173 | 103,865 | 57,173 |
Common Stock Options and RSUs | ||||
Antidilutive securities | ||||
Antidilutive securities | 1,993,207 | 1,977,988 | 2,506,246 | 1,977,988 |
ESPP Shares | ||||
Antidilutive securities | ||||
Antidilutive securities | 4,871 | 3,079 |
Short-Term Investments, Cash 22
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||
Maximum period for remaining contractual maturities of available-for-sale investments | 1 year | |
Amount of transfers between levels | $ 0 | $ 0 |
Short-Term Investments, Cash 23
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Schedule of Available for Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | $ 10,463 | $ 23,346 |
Estimated Fair Value | 10,463 | 23,346 |
Short-term investments | 3,000 | 8,703 |
Estimated Fair Value | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cash equivalents | 7,463 | 14,643 |
Short-term investments | 3,000 | 8,703 |
Money market funds | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | 7,463 | 3,188 |
Estimated Fair Value | 7,463 | 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 | 3,000 | 16,503 |
Estimated Fair Value | $ 3,000 | $ 16,503 |
Short-Term Investments, Cash 24
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, U.S. treasury securities and money market funds, included in cash equivalents and short-term investments - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Fair value, assets | $ 10,463 | $ 23,346 |
Level 2 | ||
Assets: | ||
Fair value, assets | $ 10,463 | $ 23,346 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property and Equipment | ||
Property and equipment, gross | $ 164 | $ 258 |
Less accumulated depreciation and amortization | (93) | (176) |
Property and equipment, net | 71 | 82 |
Computer and office equipment | ||
Property and Equipment | ||
Property and equipment, gross | 124 | 115 |
Furniture and fixtures | ||
Property and Equipment | ||
Property and equipment, gross | 19 | 19 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | $ 21 | $ 124 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation and amortization | $ 7 | $ 23 | $ 41 | $ 70 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt and Unamortized Debt Discount Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Long-term debt | $ 8,000 | $ 8,000 |
Less debt discount, net of current portion | (271) | (537) |
Long-term debt, net of debt discount | 7,729 | 7,463 |
Less current portion of long-term debt | (2,400) | (333) |
Long-term debt, net of current portion | 5,329 | 7,130 |
Current portion of long-term debt | 2,400 | 333 |
Current portion of debt discount | (406) | |
Current portion of long-term debt, net | $ 1,994 | $ 333 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Jan. 31, 2017 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||
Proceeds from long-term debt | $ 8,000,000 | |
Silicon Valley Bank | ||
Debt Instrument [Line Items] | ||
Warrants issued | 103,865 | |
2017 SVB Loan | Silicon Valley Bank | ||
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 | Prior to January 26, 2018 | ||
Debt Instrument [Line Items] | ||
Prepayment fee (as a percent) | 3.00% | |
2017 SVB Loan | Silicon Valley Bank | 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 | After January 25, 2019 | ||
Debt Instrument [Line Items] | ||
Prepayment fee (as a percent) | 1.00% |
Long-Term Debt - Schedule of Ex
Long-Term Debt - Schedule of Exercisable Outstanding Warrants for Purchase of Common Stock Issued (Details) - Silicon Valley Bank | Sep. 30, 2017$ / sharesshares |
Debt Instrument [Line Items] | |
Warrants issued | 103,865 |
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 |
January 25, 2024 | |
Debt Instrument [Line Items] | |
Warrants issued | 46,692 |
Exercise price (per share) | $ / shares | $ 5.14 |
Long-Term Debt - Schedule of Fu
Long-Term Debt - Schedule of Future Minimum Principal and Interest Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 8,000 | $ 8,000 |
2017 Amended SVB Loan | ||
Debt Instrument [Line Items] | ||
Remaining 2,017 | 172 | |
2,018 | 3,766 | |
2,019 | 3,489 | |
2,020 | 1,961 | |
Debt, including interest and final payment | 9,388 | |
Less interest and final payment | (1,388) | |
Long-term debt | $ 8,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Feb. 22, 2017 | Sep. 30, 2017 |
Commitments and Contingencies | ||
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, or due to a force majeure event that prevents performance under the Manufacturing Agreement for at least six months. 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. | |
Prior written notice for termination on the breach of agreement period | 60 days | |
Research and development arrangement | ||
Commitments and Contingencies | ||
Potential milestone payable | $ 126 | |
Prior to Approval | ||
Commitments and Contingencies | ||
Long-Term manufacturing agreement for lead purchase of product candidate batches estimated annual cost | $ 15 | |
Regulatory Approval | ||
Commitments and Contingencies | ||
Long-Term manufacturing agreement for lead purchase of product candidate batches estimated annual cost | $ 22 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | May 01, 2017 | Mar. 31, 2017 | Feb. 29, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Schedule Of Stock By Class [Table] | ||||||||
Proceeds from sale of common stock | $ 3,610,000 | $ 5,000,000 | ||||||
Stock Option | ||||||||
Schedule Of Stock By Class [Table] | ||||||||
Stock options granted to employees | 0 | 0 | ||||||
Common Stock | ||||||||
Schedule Of Stock By Class [Table] | ||||||||
Shares issued upon exercise of outstanding stock options | 53,756 | 9,300 | ||||||
Common Stock | Restricted Stock Units | ||||||||
Schedule Of Stock By Class [Table] | ||||||||
Shares issued upon vesting of restricted stock units | 74,044 | |||||||
Aspire Capital | Common Stock | ||||||||
Schedule Of Stock By Class [Table] | ||||||||
Maximum aggregate value of stock to be purchase | $ 21,000,000 | |||||||
Sale duration for common stock under purchase agreement | 30 months | |||||||
Shares issued, price per share | $ 4.50 | |||||||
Stock issued during period, shares, new issues | 195,726 | 222,222 | ||||||
Proceeds from sale of common stock | $ 900,000 | |||||||
Maximum value of additional shares committed to purchase | $ 20,000,000 | |||||||
Stifel, Nicolaus & Company, Incorporated | Common Stock | At-the-Market Equity Offering Sales Agreement | ||||||||
Schedule Of Stock By Class [Table] | ||||||||
Stock issued during period, shares, new issues | 737,000 | 737,000 | ||||||
Proceeds from sale of common stock | $ 2,600,000 | $ 2,600,000 | ||||||
Maximum aggregate value of stock to be sold | $ 25,000,000 | |||||||
Percentage of gross proceeds, required to pay for common stock sold through sales agreement | 2.50% | |||||||
Common stock remains available for sale | $ 22,400,000 | $ 22,400,000 | ||||||
Period over which limited value of shares subjected to sell under form S-3 | 12 months | 12 months |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Weighted-Average Assumptions Fair Value of the Employee Stock Option Grants (Details) - Stock Option | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Class Of Stock [Line Items] | ||||
Risk-free interest rate | 2.10% | 1.60% | ||
Expected volatility | 83.00% | 78.00% | ||
Expected term (in years) | 6 years 2 months 13 days | 6 years 3 months 18 days | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Stockholders' Equity - Summar34
Stockholders' Equity - Summary of Allocation of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Class Of Stock [Line Items] | ||||
Stock based compensation expense | $ 797 | $ 538 | $ 2,398 | $ 2,339 |
Research and development | ||||
Class Of Stock [Line Items] | ||||
Stock based compensation expense | 379 | 85 | 1,104 | 795 |
General and administrative | ||||
Class Of Stock [Line Items] | ||||
Stock based compensation expense | $ 418 | $ 453 | $ 1,294 | $ 1,544 |
Collaborations - Additional Inf
Collaborations - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2015 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Contracts Revenue | $ 7,498,000 | $ 815,000 | $ 8,755,000 | $ 2,832,000 | ||
Janssen Pharmaceutica N.V. | ||||||
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 License and Option Agreement in its entirety without cause, subject to specified conditions. | |||||
Janssen Pharmaceutica N.V. | 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 Pharmaceutica N.V. | 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 | |||||
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 | $ 7,500,000 | $ 800,000 | $ 8,800,000 | $ 2,800,000 | ||
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 | $ 7,000,000 | $ 3,000,000 |