Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 14, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | TRACON Pharmaceuticals, Inc. | ||
Entity Central Index Key | 0001394319 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 14.7 | ||
Entity Common Stock, Shares Outstanding | 5,397,938 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | TCON | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-36818 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 34-2037594 | ||
Entity Address, Address Line One | 4350 La Jolla Village Drive | ||
Entity Address, Address Line Two | Suite 800 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92122 | ||
City Area Code | 858 | ||
Local Phone Number | 550-0780 | ||
Document Annual Report | true | ||
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 16,412 | $ 25,136 |
Short-term investments | 0 | 13,968 |
Prepaid and other assets | 848 | 1,499 |
Total current assets | 17,260 | 40,603 |
Property and equipment, net | 23 | 45 |
Other assets | 838 | |
Total assets | 18,121 | 40,648 |
Current liabilities: | ||
Accounts payable and accrued expenses | 7,875 | 10,947 |
Accrued compensation and related expenses | 1,355 | 1,464 |
Long-term debt, current portion | 2,604 | 1,084 |
Total current liabilities | 11,834 | 13,495 |
Other long-term liabilities | 850 | 368 |
Long-term debt, less current portion | 2,739 | 5,343 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, authorized shares — 10,000,000 at December 31, 2019 and December 31, 2018; issued and outstanding shares — none | ||
Common stock, $0.001 par value; authorized shares — 20,000,000 at December 31, 2019 and December 31, 2018; issued and outstanding shares — 4,051,187 and 2,987,182 at December 31, 2019 and December 31, 2018, respectively | 4 | 3 |
Additional paid-in capital | 165,028 | 161,099 |
Accumulated deficit | (162,334) | (139,660) |
Total stockholders’ equity | 2,698 | 21,442 |
Total liabilities and stockholders’ equity | $ 18,121 | $ 40,648 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 20,000,000 | 20,000,000 |
Common stock, shares issued | 4,051,187 | 2,987,182 |
Common stock, shares outstanding | 4,051,187 | 2,987,182 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Collaboration revenue | $ 0 | $ 3,000 | $ 8,755 |
Type of Revenue [Extensible List] | tcon:CollaborationMember | tcon:CollaborationMember | tcon:CollaborationMember |
Operating expenses: | |||
Research and development | $ 14,530 | $ 30,460 | $ 19,355 |
General and administrative | 7,766 | 7,280 | 7,610 |
Total operating expenses | 22,296 | 37,740 | 26,965 |
Loss from operations | (22,296) | (34,740) | (18,210) |
Other income (expense): | |||
Interest expense, net | (386) | (231) | (886) |
Other income (expense), net | 8 | 12 | (7) |
Total other income (expense) | (378) | (219) | (893) |
Net loss | $ (22,674) | $ (34,959) | $ (19,103) |
Net loss per share, basic and diluted | $ (7.47) | $ (12.97) | $ (11.37) |
Weighted-average shares outstanding, basic and diluted | 3,034,299 | 2,694,624 | 1,680,667 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2016 | $ 28,336 | $ 2 | $ 113,932 | $ (85,598) |
Balance (in Shares) at Dec. 31, 2016 | 1,608,515 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Issuance of common stock under equity plans | 35 | 35 | ||
Issuance of common stock under equity plans (in shares) | 17,218 | |||
Stock-based compensation expense | 3,194 | 3,194 | ||
Vested shares related to repurchase liability | 14 | 14 | ||
Issuances of common stock, net of offering costs | 4,308 | 4,308 | ||
Issuances of common stock, net of offering costs (in shares) | 145,509 | |||
Issuance of common stock in exchange for services | 29 | 29 | ||
Issuance of common stock warrants in connection with debt financing | 174 | 174 | ||
Net loss | (19,103) | (19,103) | ||
Balance at Dec. 31, 2017 | 16,987 | $ 2 | 121,686 | (104,701) |
Balance (in Shares) at Dec. 31, 2017 | 1,771,242 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Issuance of common stock under equity plans | 185 | 185 | ||
Issuance of common stock under equity plans (in shares) | 22,881 | |||
Stock-based compensation expense | 2,667 | 2,667 | ||
Vested shares related to repurchase liability | 8 | 8 | ||
Issuances of common stock and warrants, net of offering costs | 36,456 | $ 1 | 36,455 | |
Issuances of Common Stock and Warrants Net of Offering Costs (in shares) | 1,193,059 | |||
Issuance of common stock warrants in connection with debt financing | 98 | 98 | ||
Net loss | (34,959) | (34,959) | ||
Balance at Dec. 31, 2018 | 21,442 | $ 3 | 161,099 | (139,660) |
Balance (in Shares) at Dec. 31, 2018 | 2,987,182 | |||
Increase (Decrease) in Shareholders' Equity | ||||
Issuance of common stock under equity plans | 12 | 12 | ||
Issuance of common stock under equity plans (in shares) | 9,270 | |||
Stock-based compensation expense | 1,624 | 1,624 | ||
Issuances of common stock, net of offering costs | 2,294 | $ 1 | 2,293 | |
Issuances of common stock, net of offering costs (in shares) | 1,054,735 | |||
Net loss | (22,674) | (22,674) | ||
Balance at Dec. 31, 2019 | $ 2,698 | $ 4 | $ 165,028 | $ (162,334) |
Balance (in Shares) at Dec. 31, 2019 | 4,051,187 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net loss | $ (22,674) | $ (34,959) | $ (19,103) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 1,624 | 2,667 | 3,194 |
Common stock issued for services | 29 | ||
Depreciation and amortization | 22 | 28 | 48 |
Noncash interest | 234 | 272 | 354 |
Amortization of debt discount | 81 | 94 | 117 |
Amortization of premium/discount on short-term investments | (52) | (100) | (9) |
Lease asset amortization and liability accretion, net | (6) | ||
Deferred rent | 11 | 60 | |
Deferred revenue | (3,000) | 1,741 | |
Changes in assets and liabilities: | |||
Prepaid expenses and other assets | 651 | 92 | (356) |
Accounts payable and accrued expenses | (3,421) | 4,142 | 776 |
Accrued compensation and related expenses | (109) | (30) | (94) |
Net cash used in operating activities | (23,650) | (30,783) | (13,243) |
Cash flows from investing activities | |||
Purchase of property and equipment | (39) | ||
Purchases of available-for-sale short-term investments | (4,980) | (32,869) | (13,992) |
Proceeds from the maturity of available-for-sale short-term investments | 19,000 | 24,000 | 17,705 |
Net cash provided by (used in) investing activities | 14,020 | (8,869) | 3,674 |
Cash flows from financing activities | |||
Proceeds from long-term debt | 7,000 | 8,000 | |
Repayment of long-term debt | (1,400) | (8,320) | (8,850) |
Proceeds from sale of common stock and warrants, net of offering costs | 2,294 | 36,456 | 4,141 |
Proceeds from issuance of common stock under equity plans | 32 | 263 | 172 |
Payment of tax withholdings related to net share settlements of vested restricted stock awards | (20) | (78) | (137) |
Net cash provided by financing activities | 906 | 35,321 | 3,326 |
Decrease in cash and cash equivalents | (8,724) | (4,331) | (6,243) |
Cash and cash equivalents at beginning of period | 25,136 | 29,467 | 35,710 |
Cash and cash equivalents at end of period | 16,412 | 25,136 | 29,467 |
Supplemental disclosure of cash flow information | |||
Interest paid | 612 | 642 | 664 |
Supplemental schedule of noncash investing and financing activities | |||
Issuance of common stock warrants in connection with long-term debt | $ 98 | 174 | |
Issuance of common stock in connection with common stock purchase agreement | $ 450 | $ 793 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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 and, through its license to Santen Pharmaceutical Co. Ltd. (Santen), wet age-related macular degeneration, or wet AMD. The Company’s product development platform, which emphasizes capital efficiency, also provides to ex-U.S. companies a rapid and capital-efficient U.S. drug development solution that includes U.S. and European Union (EU) clinical development expertise and U.S. commercialization expertise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, TRACON Pharma Limited and TRACON Pharma International Limited, which were formed in September 2015 and January 2019, respectively, and are currently inactive. All significant intercompany accounts and transactions have been eliminated. Basis of Presentation As of December 31, 2019, the Company has devoted substantially all of its efforts to product development, raising capital, and building infrastructure and has not realized revenues from its planned principal operations. The Company has incurred operating losses since inception. As of December 31, 2019, the Company had an accumulated deficit of $162.3 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it continues the development and commercialization of its product candidates and works to develop additional product candidates through research and development programs. At December 31, 2019, the Company had cash and cash equivalents of $16.4 million. Based on the Company’s current business plan, management believes that there is substantial doubt as to whether existing cash and cash equivalents will be sufficient to meet its obligations as they become due within one year from the date the financial statements are issued. The Company’s ability to execute its operating plan into early 2021 and beyond depends on its ability to obtain additional funding through equity offerings, debt financings, or potential licensing and collaboration arrangements. 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 2019 Purchase Agreement) the Company entered into with Aspire Capital Fund, LLC (Aspire Capital) in October 2019 for the purchase of up to $15.0 million of the Company’s common stock over a 30 month period, all of which remains available for sale , TM 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. Reverse Stock Split On November 7, 2019, the Company filed an amendment to the Company’s amended and restated certificate of incorporation to effect The par value of the common stock was not adjusted as a result of the reverse stock split. Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. The most significant estimates in the Company’s financial statements relate to revenue recognition and expenses incurred for clinical trials. 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. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the related assets, which is generally five years. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the related assets. Repairs and maintenance costs are charged to expense as incurred. Leases The Company determines if an arrangement contains a lease at inception. For arrangements where the Company is the lessee, operating leases are recorded as other assets, accounts payable and accrued expenses, and other long-term liabilities within the consolidated balance sheet. The Company currently does not have any finance leases. Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. Revenue Recognition To date, substantially all of the Company’s revenue has been derived from its license agreements with Santen and Ambrx, Inc. (Ambrx) as described in Note 7. The terms of these arrangements include payments to the Company for the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. In accordance with ASU 2014-09, the Company performs the following five steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of these agreements: (i) identification of the contract(s) with a customer; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including any constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services transferred to the customer. Once a contract is determined to be within the scope of Accounting Standards Codification 606, Revenue from Contracts with Customers, at contract inception, the Company assesses the goods or services promised within the contract to determine those that are performance obligations and assesses whether each promised good is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied. As part of the accounting for these arrangements, the Company develops assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promised goods or services, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Company evaluates whether the achievement of the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. Performance milestone payments represent a form of variable consideration. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Achievement of milestones that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable until the approvals are achieved. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis and the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations at the outset of the arrangement. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its out-licensing arrangements. The Company receives payments from its collaborators based on billing schedules established in each contract. Up-front and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under its collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. 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 each of the three years ended December 31, 2019, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. Research and Development Costs Research and development costs, including license fees, are expensed as incurred. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. Stock-Based Compensation Stock-based compensation expense represents the grant date fair value of employee stock option grants, employee restricted stock unit grants (RSUs), and employee stock purchase plan (ESPP) rights recognized as expense over the requisite service period of the awards (usually the vesting period) on a straight-line basis. 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 closing sales price for such stock on the date of grant. Equity award forfeitures are recorded as they occur. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than‑not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss were the same for all periods presented. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average shares of common stock outstanding for the period, without consideration for common stock equivalents and adjusted for the weighted‑average number of common shares outstanding that are subject to repurchase. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): December 31, 2019 2018 2017 Warrants to purchase common stock 1,561,903 1,561,903 10,384 Common stock options and restricted stock units 370,391 300,738 251,574 ESPP shares 1,322 1,275 365 1,933,616 1,863,916 262,323 Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases, which outlines a comprehensive lease accounting model and supersedes the then current lease guidance. The new accounting standard requires lessees to recognize lease liabilities and corresponding ROU assets for all leases with lease terms of greater than twelve months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The Company adopted ASU 2016-02 on January 1, 2019 using the modified retrospective method. Under this approach, financial information and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The Company elected the “package of practical expedients” upon adoption, which permits it to not reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use of hindsight or the practical expedient pertaining to land easements, the latter of which not being applicable. Upon adoption, the Company (i) recognized a ROU asset and lease liability on its balance sheet for its corporate office operating lease and (ii) derecognized the deferred rent balance as of December 31, 2018 under the superseded lease guidance. The ROU asset in the amount of $1.1 million has been recorded in other assets and the short-term and long-term lease liability in the amount of $0.3 million and $0.9 million, respectively, have been recorded in accounts payable and accrued expenses and other long-term liabilities, respectively, within the consolidated balance sheet. There was no impact on retained earnings or other components of equity, nor was there any impact on the statement of operations, upon adoption. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Accounting Standards Codification 718, Compensation-Stock Compensation, to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. The |
Short-Term Investments, Cash Eq
Short-Term Investments, Cash Equivalents and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Short-Term Investments, Cash Equivalents and Fair Value Measurements | 2. Short-Term Investments, Cash Equivalents and Fair Value Measurements At December 31, 2019, the Company had no short-term investments and at December 31, 2018, short-term investments consisted of U.S. treasury securities. The Company classifies all investments as available-for-sale securities, 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. 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, which are classified as equity securities, and short-term investments, which are classified as available-for-sale securities, consisted of the following (in thousands): December 31, 2018 Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Money market funds $ 5,832 $ — $ — $ 5,832 U.S. treasury securities 13,968 — — 13,968 $ 19,800 $ — $ — $ 19,800 Classified as: Cash equivalents $ 5,832 Short-term investments 13,968 Total cash equivalents and short-term investments $ 19,800 The fair values of the Company’s assets and liabilities, which are measured at fair value on a recurring basis, were determined using the following inputs (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) At December 31, 2018 Money market funds and U.S. treasury securities, included in cash equivalents and short-term investments $ 19,800 $ — $ 19,800 $ — |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consisted of the following (in thousands): December 31, 2019 2018 Computer and office equipment $ 133 $ 133 Furniture and fixtures 19 19 Leasehold improvements 21 21 173 173 Less: accumulated depreciation and amortization (150) (128) $ 23 $ 45 Depreciation expense related to property and equipment totaled approximately $22,000, $28,000 and $48,000 for the years ended December 31, 2019, 2018 and 2017, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt Long-term debt and unamortized debt discount balances were as follows (in thousands): December 31, 2019 2018 Long-term debt $ 5,600 $ 7,000 Less debt discount, net of current portion (61 ) (257) Long-term debt, net of debt discount 5,539 6,743 Less current portion of long-term debt (2,800 ) (1,400) Long-term debt, less current portion $ 2,739 $ 5,343 Current portion of long-term debt $ 2,800 $ 1,400 Current portion of debt discount (196 ) (316) Current portion of long-term debt, net $ 2,604 $ 1,084 In May 2018, the Company entered into a third amendment to its Amended and Restated Loan and Security Agreement (the 2018 Amended SVB Loan) with Silicon Valley Bank (SVB) under which the Company borrowed $7.0 million, all of which was immediately used to repay the Company’s existing loan with SVB (the 2017 Amended SVB Loan). In accordance with the terms of the 2017 Amended SVB Loan, the Company paid a final payment of $0.3 million associated with the payoff of the 2017 Amended SVB Loan. The transaction was accounted for as a debt modification. The 2018 Amended SVB Loan provides for interest to be paid at a rate of 9.0 30 months 4.0% The 2018 Amended SVB Loan provides for prepayment fees of 2.0% 1.0% of the amount prepaid if the prepayment occurs thereafter. The 2018 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 2018 Amended SVB Loan. As of December 31, 2019, the Company was in compliance with all covenants and conditions of the 2018 Amended SVB Loan. In connection with the 2018 Amended SVB Loan, the Company issued SVB a warrant to purchase 5,363 shares of its common stock at an exercise price of $26.10 per share. The warrant is fully exercisable and expires on May 3, 2025. The fair value of the warrant and the final payment related to the 2018 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 2017 Amended SVB Loan. At December 31, 2019, 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 May 13, 2022 1,841 $ 108.60 November 14, 2023 through June 4, 2024 3,874 $ 77.40 January 25, 2024 4,669 $ 51.40 May 3, 2025 5,363 $ 26.10 15,747 Future minimum principal and interest payments under the 2018 Amended SVB Loan, including the final payment, as of December 31, 2019 are as follows (in thousands): 2020 $ 3,195 2021 3,218 6,413 Less interest and final payment (813 ) Long-term debt $ 5,600 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
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 (Manufacturing Agreement) with Lonza for the long term manufacture and supply of registration and commercial batches of TRC105. Under the Manufacturing Agreement, Lonza agreed to manufacture TRC105 pursuant to purchase orders and in accordance with the manufacturing specifications agreed upon between the Company and Lonza. Following the announcement of the TAPPAS interim unblinded safety and efficacy data in April 2019, the Company exercised its right to terminate the Manufacturing Agreement as a result of its decision to terminate further TRC105 development in oncology. License Agreements The Company has entered into various license agreements pursuant to which the Company acquired licenses to certain intellectual property. The agreements generally required an upfront license fee and, in some cases, reimbursement of patent costs. Additionally, under each agreement, the Company may be required to pay annual maintenance fees, royalties, milestone payments and sublicensing fees. Each of the license agreements is generally cancelable by the Company, given appropriate prior written notice. At December 31, 2019, potential future milestone payments under these agreements, including future milestone payments associated with TRC253 acquired from Janssen Pharmaceutica N.V. (Janssen) should they not exercise their option to regain their rights to certain assets as discussed in Note 7, totaled an aggregate of approximately $66.0 million. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 6. Stockholders’ Equity Sales of Common Stock In October 2019, the Company entered into the 2019 Purchase Agreement with Aspire Capital which provides that, upon the terms and subject to the conditions and limitations set forth in the 2019 Purchase Agreement, Aspire Capital is committed to purchase up to an aggregate of $15.0 million of shares of the Company’s common stock solely at the Company’s request from time to time during a 30 month period and at prices based on the market price at the time of each sale. In consideration for entering into the 2019 Purchase Agreement and concurrently with the execution of the 2019 Purchase Agreement, the Company issued 142,658 shares of its common stock to Aspire Capital. As of December 31, 2019, the Company had not sold any shares of common stock to Aspire Capital under the 2019 Purchase Agreement. As of the date of this report, the Company has sold 0.2 million shares of common stock under the 2019 Purchase Agreement with Aspire Capital for gross proceeds of $0.8 million. In March 2017, the Company entered into a common stock purchase agreement (the 2017 Purchase Agreement) with Aspire Capital which provided that, upon the terms and subject to the conditions and limitations of the 2017 Purchase Agreement, Aspire Capital was committed to purchase up to an aggregate of $21.0 million of shares of its common stock. As of December 31, 2019, the Company had issued 41,795 shares of common stock to Aspire Capital under the 2017 Purchase Agreement for net proceeds of approximately $0.9 million. Upon execution of the 2019 Purchase Agreement, the 2017 Purchase Agreement with Aspire Capital was terminated in its entirety and no further sales of the Company’s common stock will occur under the 2017 Purchase Agreement. In March and April 2018, the Company sold 1,193,059 shares of its common stock at a purchase price of $27.00 per share, warrants to purchase 176,554 shares of its common stock at a purchase price of $26.90 per share and an exercise price of $0.10 per share (the Pre-Funded Warrants) and warrants to purchase 1,369,602 shares of its common stock at a purchase price of $1.25 per share and an exercise price of $27.00 per share (the Common Warrants) for net proceeds of approximately $36.5 million in a private placement to new and certain existing accredited investors. In accordance with their terms, the Pre-Funded Warrants and the Common Warrants may not be exercised if the holder’s ownership of the Company’s common stock would exceed 9.99% or 19.99% of the Company’s total shares outstanding following such exercise, depending on the investor. Both the Pre-Funded Warrants and the Common Warrants were recorded as a component of stockholders’ equity within additional paid-in capital. In April 2018, in connection with this transaction, the Company paid Angel Pond Capital, an affiliate of a holder of more than 5% of the Company’s common stock and an affiliate of a member of the Company’s Board of the Directors at that time, a fee totaling approximately $1.9 million as consideration for acting as a nonexclusive placement agent for this financing. At-The-Market Issuance Sales Agreement In September 2018, as amended February 2019, the Company entered into the Sales Agreement with JonesTrading, pursuant to which it could sell from time to time, at its option, up to an aggregate of $11.6 million of the Company’s shares of its common stock through JonesTrading, as sales agent, subject to limitations on the amount of securities the Company may sell pursuant to its effective registration statement on Form S-3 within any 12 month period. The Company is required to pay JonesTrading 2.5% of gross proceeds for the common stock sold through the Sales Agreement. During the year ended December 31, 2019, the Company sold 0.9 million shares of common stock through the Sales Agreement with JonesTrading for gross proceeds of $2.4 million and $9.2 million remains available for sale under the Sales Agreement as of December 31, 2019. As of the date of this report, the Company has sold 2.1 million shares of common stock through the Sales Agreement with JonesTrading for gross proceeds of $5.3 million. In September 2018, the Company terminated its At-the-Market Equity Offering Sales Agreement (Stifel Sales Agreement) with Stifel, Nicolaus & Company, Incorporated (Stifel). The Company had sold an aggregate of approximately $3.5 million of common stock through Stifel pursuant to the Stifel Sales Agreement prior to termination. Common Stock Warrants As of December 31, 2019 , the Company had the following outstanding warrants for the purchase of common stock: Expiration Number of shares Exercise price May 13, 2022 1,841 $ 108.60 November 14, 2023 through June 4, 2024 3,874 $ 77.40 January 25, 2024 4,669 $ 51.40 March 27, 2024 1,369,602 $ 27.00 March 27, 2025 176,554 $ 0.10 May 3, 2025 5,363 $ 26.10 1,561,903 During the year ended December 31, 2019, no warrants were exercised. Stock Compensation Plans 2011 Equity Incentive Plan The Company granted awards under the TRACON Pharmaceuticals, Inc. 2011 Equity Incentive Plan (the 2011 Plan) until January 2015. The 2011 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights (SARs), restricted stock grants and restricted stock units to eligible recipients. Recipients of incentive stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2011 Plan is no more than ten years. Grants made under the 2011 Plan generally vest on the last day of each month over 48 months from the vesting commencement date subject to continuous service. In connection with the adoption of the 2015 Equity Incentive Plan (the 2015 Plan), the Company terminated the 2011 Plan and no additional awards will be or have been granted under the 2011 Plan. 2015 Equity Incentive Plan Effective January 1, 2015, the Company’s board of directors adopted the 2015 Plan. Under the 2015 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. Initially, a total of 80,103 shares of common stock were reserved for issuance under the 2015 Plan. In addition, the number of shares of common stock available for issuance under the 2015 Plan will be annually increased on the first day of each fiscal year during the term of the 2015 Plan, beginning with the 2016 fiscal year, by an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year or such other amount as the Company’s board of directors may determine. The maximum term of the options granted under the 2015 Plan is no more than ten years. Grants generally vest at 25% one year from the vesting commencement date and ratably each month thereafter for a period of 36 months, subject to continuous service. In December 2015, the 2015 Plan was amended to allow an additional 50,000 shares of common stock to be used exclusively for the grant of equity awards as a material inducement for individuals to commence employment at the Company in compliance with Nasdaq Listing Rule 5635(c)(4). Restricted Stock Units In 2016, the Company issued RSUs to employees and members of the Company’s board of directors under the 2015 Plan. The total grant-date fair value of RSUs that vested during the years ended December 31, 2019 and 2018 was $0.4 million and $0.5 million, respectively. The aggregate intrinsic value of outstanding RSUs at December 31, 2019 was $8,000 and is based on the Company’s closing market price per share on December 31, 2019 of $2.34. As of December 31, 2019, there was approximately $16,000 of unrecognized compensation costs related to outstanding RSUs, which is expected to be recognized over a weighted average remaining period of 0.05 years. Restricted stock unit activity under the 2015 Plan is summarized as follows: Weighted Average Number of Grant Date Shares Fair Value Outstanding at December 31, 2018 9,254 $ 79.20 Granted — — Vested (4,629 ) 79.20 Forfeited (1,105 ) 79.20 Outstanding at December 31, 2019 3,520 $ 79.20 Stock Options Stock option activity under all Plans is summarized as follows: Weighted- Number of Average Options Exercise Price Balance at December 31, 2018 291,484 $ 52.78 Granted 163,297 $ 7.79 Exercised — $ — Forfeited (87,910) $ 36.65 Balance at December 31, 2019 366,871 $ 36.62 Information about the Company’s outstanding stock options as of December 31, 2019 is as follows: Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Options outstanding 366,871 $ 36.62 7.25 $ — Options vested and expected to vest 366,871 $ 36.62 7.25 $ — Options exercisable 185,629 $ 58.61 5.73 $ — The weighted-average grant date fair value per share of employee option grants during the years ended December 31, 2019, 2018 and 2017 was $5.55, $16.69 and $34.68, respectively. The aggregate intrinsic value used in the above table of options at December 31, 2019 is based on the Company’s closing market price per common share on December 31, 2019 of $2.34. The Company received approximately $0.2 million and $44,900 in proceeds from the exercise of stock options during the years ended December 31, 2018 and 2017, respectively. The total intrinsic value of options exercised was approximately $0.2 million and $0.2 million during the years ended December 31, 2018 and 2017, respectively. No stock options were exercised during the year ended December 31, 2019. The total grant-date fair value of options that vested during the years ended December 31, 2019, 2018 and 2017 was $1.5 million, $2.6 million and $1.9 million, respectively. Employee Stock Purchase Plan (ESPP) On January 1, 2015, the Company’s board of directors adopted the ESPP, which became effective upon the pricing of the Company’s initial public offering on January 29, 2015. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation. Initially, a total of 18,346 shares of common stock was reserved for issuance under the ESPP. In addition, the number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each fiscal year during the term of the ESPP, beginning with the 2016 fiscal year, by an amount equal to the lessor of: (i) 36,692 shares; (ii) 1% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year; or (iii) such other amount as the Company’s board of directors may determine. Stock compensation expense for the years ended December 31, 2019, 2018 and 2017 related to the ESPP was immaterial. Stock-Based Compensation Expense The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2019 2018 2017 Risk-free interest rate 2.6% 2.8% 2.1% Expected volatility 81.1% 79.6% 83.0% Expected term (in years) 6.2 6.2 6.2 Expected dividend yield — — — Risk-free interest rate. The Company bases the risk‑free interest rate assumption on the U.S. Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. Expected volatility. The expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry. Expected term. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period. Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends. The allocation of stock-based compensation expense was as follows (in thousands): Years Ended December 31, 2019 2018 2017 Research and development $ 776 $ 1,462 $ 1,482 General and administrative 848 1,205 1,712 $ 1,624 $ 2,667 $ 3,194 As of December 31, 2019 and 2018, the unrecognized compensation cost related to outstanding time-based options was $1.6 million and $2.6 million, respectively, and is expected to be recognized as expense over approximately 2.6 years and 2.6 years, respectively. Common Stock Reserved for Future Issuance Common stock reserved for future issuance was as follows: December 31, 2019 2018 Common stock warrants 1,561,903 1,561,903 Common stock options and restricted stock units granted and outstanding 370,391 300,738 Awards available under the 2015 Plan 128,589 81,495 Shares available under the ESPP 73,472 50,135 2,134,355 1,994,271 |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2019 | |
Collaborations Disclosure [Abstract] | |
Collaborations | 7. Collaborations 3D Medicines and Alphamab In December 2019, the Company, 3D Medicines Co., Ltd. (3D Medicines), and Jiangsu Alphamab Biopharmaceuticals Co., Ltd. (Alphamab) entered into the Envafolimab Collaboration Agreement for the development of envafolimab, also known as KN035, an investigational PD-L1 sdAb, or nanobody, administered by subcutaneous injection, for the treatment of soft tissue sarcoma in North America. No consideration was exchanged in the Envafolimab Collaboration Agreement. Given no consideration was exchanged, no value was assigned to the Envafolimab Collaboration Agreement in the accompanying consolidated balance sheet. Pursuant to the Envafolimab Collaboration Agreement, the Company was granted an exclusive license to develop and commercialize envafolimab for the treatment of sarcoma in North America. The Company is responsible for conducting, and will bear the costs of Phase 1, Phase 2, Phase 3, or post-approval clinical trials in North America for envafolimab in the indications of refractory and first line treatment of soft tissue sarcoma. 3D Medicines and Alphamab are responsible for conducting, and will bear the costs of, investigational new drug (IND)-enabling studies (other than those specific to the sarcoma indication) and the preparation of chemistry, manufacturing and controls (CMC) activities sections of an IND application for envafolimab. 3D Medicines and Alphamab have agreed to manufacture and supply, or to arrange for a third party manufacturer to manufacture and supply, envafolimab to the Company at pre-negotiated prices that vary based on clinical or commercial use. 3D Medicines and Alphamab retained the right to develop envafolimab in all territories outside of North America as well as within North America for all indications other than soft tissue sarcoma. The Company will be responsible for commercializing envafolimab for sarcoma in North America, including booking of sales revenue, unless (a) envafolimab is first approved in North America for an indication other than soft tissue sarcoma and launched in North America, or (b) envafolimab is first approved in North America for soft tissue sarcoma and subsequently approved in North America for an additional non-orphan indication and sold commercially by 3D Medicines and/or Alphamab, in which case 3D Medicines and Alphamab will be responsible for commercializing envafolimab for soft tissue sarcoma in North America, including booking of sales revenue. If 3D Medicines and Alphamab become responsible for commercialization under the Envafolimab Collaboration Agreement, the Company has the option to co-market envafolimab for sarcoma in North America. In the event that envafolimab is first approved in North America for sarcoma and within three years of the commercial launch of envafolimab in North America for sarcoma 3D Medicines and Alphamab replace the Company as the party responsible for commercialization, and the Company elects and 3D Medicines and Alphamab agree for the Company to not co-market envafolimab for sarcoma in North America, then 3D Medicine and Alphamab will be required to compensate the Company for its costs associated with preparing for and conducting commercial activities. If the Company has the responsibility for commercialization under the Envafolimab Collaboration Agreement, the Company will owe 3D Medicines and Alphamab tiered double digit royalties on net sales of envafolimab for sarcoma in North America ranging from the teens to mid-double digits. If 3D Medicines and Alphamab have responsibility for commercialization under the Collaboration Agreement, the Company will be entitled to (a) escalating double digit royalties on net sales of envafolimab for sarcoma in North America ranging from the teens to mid-double digits if the Company has chosen to not co-market envafolimab in sarcoma or (b) a 50% royalty on net sales of envafolimab for sarcoma in North America if the Company has chosen to co-market envafolimab in sarcoma. Payment obligations under the Envafolimab Collaboration Agreement continue on a country-by-country basis until the last to expire licensed patent covering envafolimab expires. 3D Medicines and Alphamab retain the right to reacquire the rights to envafolimab for sarcoma in North America in connection with an arm’s length sale to a third party, provided that the sale may not occur prior to completion of a pivotal trial of envafolimab in sarcoma without the Company’s written consent and the parties must negotiate in good faith and agree to fair compensation to be paid to the Company for the value of and opportunity represented by the required rights. Each party agreed that during the term of the Envafolimab Collaboration Agreement, it would not develop or license from any third party a monospecific inhibitor to PD-L1 or PD-1. The term of the Envafolimab Collaboration Agreement continues until the later of the date the parties cease further development and commercialization of envafolimab for sarcoma in North America or the expiration of all payment obligations. The Envafolimab Collaboration Agreement may be terminated earlier by a party in the event of an uncured material breach by the other party or bankruptcy of the other party, or for safety reasons related to envafolimab. In the event the Company elects, or a joint steering committee determines, to cease further development or commercialization of envafolimab, or if the Company fails to use commercially reasonable efforts to develop (including progress in clinical trials) and commercialize envafolimab and does not cure such failure within a specified time period, then the Company’s rights and obligations under the Envafolimab Collaboration Agreement will revert to 3D Medicines and Alphamab. I-Mab In November 2018, the Company and I-Mab Biopharma (I-Mab) entered into separate strategic collaboration and clinical trial agreements (the Collaboration Agreements) for the development of programs for multiple immuno-oncology product candidates, including I-Mab’s proprietary CD73 antibody TJ004309 (the TJ004309 Agreement) as well as up to five proprietary bispecific antibodies currently under development by I-Mab (the Bispecific Agreement). No consideration was exchanged in the Collaboration Agreements. Given the early preclinical stage of development of these assets as of the agreement date, no value was assigned to the Collaboration Agreements in the accompanying consolidated balance sheet. TJ004309 Agreement Pursuant to the TJ004309 Agreement, the Company and I-Mab are collaborating on developing the TJ004309 antibody, with the Company bearing the costs of filing an IND and for Phase 1 clinical trials, with the parties sharing costs equally for Phase 2 clinical trials, and with the Company and I-Mab bearing 40% and 60%, respectively, of the costs for pivotal clinical trials. I-Mab will be responsible for the cost of certain non-clinical activities, the drug supply of TJ004309, and any reference drugs used in the clinical trials. Each of the parties also agreed for a specified period of time to not develop or license to or from a third party any monoclonal antibody targeting CD73 or any other biologic for certain indications that a joint steering committee (JSC), as set up under the TJ004309 Agreement, selects for TJ004309 development. In the event that I-Mab out-licenses the rights to TJ004309 to a third party, the Company would be entitled to receive escalating portions of royalty and non-royalty consideration received by I-Mab with respect to certain territories outside of Greater China. In the event that I-Mab commercializes TJ004309, the Company would be entitled to receive a royalty percentage on net sales by I-Mab in North America ranging from the mid-single digits to low double digits, and in the EU and Japan in the mid-single digits. The portions of certain third party royalty and non-royalty consideration and the royalty from net sales by I-Mab to which the Company would be entitled will escalate based on the phase of development and relevant clinical trial obligations the Company completes under the TJ004309 Agreement, ranging from a high-single digit to a mid-teen percentage of non-royalty consideration as well as a double digit percentage of royalty consideration. The TJ004309 TJ004309 TJ004309 TJ004309 Bispecific Agreement Pursuant to the Bispecific Agreement, the Company and I-Mab may mutually select through a joint steering committee (JSC) up to five of I-Mab’s bispecific antibody product candidates within a five-year period for development and commercialization in North America. For each product candidate selected by the JSC for development under the Bispecific Agreement, I-Mab will be responsible and bear the costs for IND-enabling studies and establishing manufacturing for the product candidate, while the Company will be responsible for and bear the costs of filing an IND and conducting Phase 1 and Phase 2 clinical trials, and the Company will be responsible for and will share equally with I-Mab in the costs of conducting Phase 3 or pivotal clinical trials, in each case within North America. Subject to I-Mab’s right to co-promote an approved product candidate, the Company will be responsible for commercializing any approved product candidates in North America and will share profits and losses equally with I-Mab in North America. The Company would also be entitled to tiered low single digit royalties on net sales of product candidates in the EU and Japan. At any time prior to completing the first pivotal clinical study for a product candidate or if I-Mab ceases to support development costs or pay its portion of Phase 3 clinical trial costs for a product candidate or the JSC decides to cease development over the Company’s objections after initiating Phase 3 clinical trials, the Company will have an option to obtain an exclusive license to such product candidate in all territories except Greater China and Korea, and any other territories in which I-Mab previously licensed rights to a third party subject to the Company’s right of first refusal for any licenses I-Mab may grant to third-parties. If the Company exercises the option, it would assume sole responsibility for developing and commercializing the product candidate in the licensed territory, and in lieu of profit or loss sharing with I-Mab with respect to such product candidate, the Company would owe I-Mab pre-specified upfront and milestone payments and royalties on net sales, with the payments and royalties escalating depending on the phase of development the product candidate reached at the time the Company obtained the exclusive license: (i) if before IND-enabling studies and the preparation of the CMC activities of the collaborative product, the Company would owe I-Mab a one-time upfront payment of $10.0 million, development and regulatory based milestone payments totaling up to $90.0 million that begin upon completion of a pivotal study, sales milestones totaling up to $250.0 million, and royalties in the mid-single digits on annual net sales; (ii) if after IND submission but before completion of a Phase 1a clinical trial of the collaborative product, the Company would owe I-Mab a one-time upfront payment of $25.0 million, development and regulatory based milestone payments totaling up to $125.0 million that begin upon completion of a pivotal study, sales milestones totaling up to $250.0 million, and royalties in the high single digits on annual net sales; (iii) if after completion of a Phase 1a clinical trial but before completion of Phase 2 proof of concept clinical trial for the collaborative product, the Company would owe I-Mab a one-time upfront payment of $50.0 million, development and regulatory based milestone payments totaling up to $250.0 million that begin upon completion of a pivotal study, sales milestones totaling up to $250.0 million, and royalties in the low double digits on annual net sales; and (iv) if after completion of Phase 2 proof of concept clinical trial and before completion of pivotal study for the collaborative product, the Company would owe I-Mab a one-time upfront payment of $80.0 million, development and regulatory based milestone payments totaling up to $420.0 million that begin upon completion of a pivotal study, sales milestones totaling up to $250.0 million, and royalties in the high-teen double digits on annual net sales. Each party agreed that for a specified period of time, it would not develop or license to or from any third party any bispecific monoclonal antibody targeting the same two biological targets as those of any selected product candidates under the Bispecific Agreement. If development of any selected product candidates is terminated by a decision of the JSC, all rights to the product candidate will revert to I-Mab, subject to the Company’s right to obtain an exclusive license in certain circumstances. If development is terminated after submission of an IND and prior to initiating Phase 3 clinical trials or after initiating Phase 3 clinical trials and with the Company’s concurrence, the Company would be entitled to tiered low single digit royalties on net sales of the product candidate in North America, the EU, and Japan. The Bispecific Agreement may be terminated by either party in the event of an uncured material breach by the other party, bankruptcy of the other party, or with respect to any selected product candidate, for safety reasons related to that product candidate. 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. 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. As of December 31, 2019, 2018 and 2017, two development milestones had been received totaling $10.0 million. 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. Upon the adoption of ASU 2014-09, the Company assessed this agreement and identified multiple promised goods and services, which include at inception: (1) a license to patents, information and know-how related to TRC105, (2) a technology transfer, and (3) a collaboration, including technical and regulatory support provided by the Company. In addition, customer options were identified that include manufacturing and supply obligations and shared CMC development activities. All performance obligations were satisfied by the year ended December 31, 2017, which completed the Company’s obligations. Upon the adoption of ASC 2014-09 and as of December 31, 2019, the transaction price includes the $10.0 million upfront payment and the two development milestones received totaling $10.0 million, all of which had been fully recognized as revenue as of December 31, 2017. The remaining $52.5 million of potential development and regulatory milestone payments are not considered probable at December 31, 2019, and therefore no amounts have been included in the transaction price for these remaining milestones. In addition, in accordance with ASU 2014-09, a ny consideration related to the commercialization and sales-based milestones (including royalties) will be recognized when the related sales occur and have also been excluded from the transaction price. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The Company assessed this agreement upon the adoption of ASU 2014-09 and determined it had satisfied all of its performance obligations and recognized the full transaction price as of December 31, 2018, and accordingly, no 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). With respect to the AR Mutant Program, the License and Option Agreement, as amended, provides Janssen with an option, which is exercisable until 90 days after the Company demonstrates clinical proof of concept of TRC253, 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. 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 AR Mutant Program according to agreed upon development plans, timelines and budgets. The Company is further obligated as it relates to the AR Mutant Program 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, 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, 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 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. The Company may also terminate a program or the License and Option Agreement in its entirety without cause, subject to specified conditions. Ambrx, Inc. In December 2017, the Company entered into a license agreement with Ambrx for the development and commercialization of the Company’s endoglin antibodies, including TRC105, in Greater China. The license granted Ambrx the exclusive rights to use, develop, manufacture and commercialize the Company’s endoglin antibodies in all indications (excluding ophthalmology which are held by Santen) in Greater China. In February 2019, following discussions between the Company and Ambrx regarding Ambrx’s progress towards initiating a Phase 1 clinical trial of TRC105 in China, Ambrx notified the Company that it had elected to terminate the license agreement, resulting in all rights to TRC105 in Greater China reverting to the Company. In consideration of the rights granted to Ambrx under the agreement, the Company received a one-time upfront fee of $3.0 million, which was recorded as deferred revenue upon receipt and recognized as revenue in the first quarter of 2018 when the license and know-how related to TRC105 was delivered to Ambrx. No further revenue will be recognized associated with this agreement given Ambrx’s decision to terminate the license agreement, resulting in all rights to TRC105 in Greater China reverting to the Company. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases The Company leases its office space under a non-cancelable operating lease that expires in April 2022 and may be extended for an additional term of 60 months. The option to extend this lease has been excluded from the lease term as the Company is not reasonably certain that the option will be exercised. The lease is subject to base lease payments and additional charges for common area maintenance and other costs and includes certain lease incentives and tenant improvement allowances. Operating lease expense was $0.4 million, $0.4 million and $0.4 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the Company does not have any finance leases, nor any other operating leases. Supplemental cash flow information, as of December 31, 2019, related to operating leases was as follows (in thousands): Cash paid within operating cash flows $ 423 ROU assets recognized in exchange for new lease obligations $ 1,143 Supplemental balance sheet information, as of December 31, 2019 Reported as: Other assets (ROU asset) $ 838 Accounts payable and accrued expenses (lease liability) $ 355 Other long-term liabilities (lease liability) 570 Total lease liabilities $ 925 Weighted average remaining lease term 2.30 Weighted average discount rate 11.3% As of December 31, 2019 2020 $ 442 2021 461 2022 156 Total lease payments 1,059 Less imputed interest (134) Total operating lease liabilities $ 925 Under the terms of the lease agreement, the Company provided the lessor with an irrevocable letter of credit in the amount of $175,000. The lessor is entitled to draw on the letter of credit in the event of any default by the Company under the terms of the lease. ASC 840 Disclosures The Company elected the alternative modified transition method and previously disclosed the following: Future minimum payments under the non‑cancelable operating lease as of December 31, 2018 were as follows (in thousands): 2019 $ 423 2020 442 2021 461 2022 156 $ 1,482 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes A reconciliation of the Company’s effective tax rate and federal statutory tax rate is summarized as follows (in thousands): Years Ended December 31, 2019 2018 2017 Federal income taxes $ (4,761 ) $ (7,341 ) $ (6,686 ) State income taxes, net of federal benefit (1,381 ) (2,340 ) (1,404 ) Permanent items 149 439 1,170 Uncertain tax positions 1,828 672 (1,158 ) Research and development credits (1,253 ) (2,545 ) (2,719 ) California Net Operating Loss carryforwards — — (2,208 ) Rate change — 629 — Tax Cuts and Jobs Act — — 11,478 Other, net (75 ) — (126 ) Stock compensation 395 66 123 Change in valuation allowance 5,098 10,420 1,530 Provision for income taxes $ — $ — $ — Significant components of the Company’s deferred tax assets and deferred tax liabilities are summarized as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 36,850 $ 32,182 Research and development credits and Orphan Drug Credit 8,944 8,280 Depreciation and amortization 269 281 Right-of-use liability 194 — Other, net 1,369 1,609 Total deferred tax assets 47,626 42,352 Right-of-use asset (176 ) — Total deferred tax liabilities (176 ) — Total net deferred 47,450 42,352 Valuation allowance (47,450 ) (42,352 ) Net deferred tax assets $ — $ — The Company has net deferred tax assets relating primarily to net operating loss (NOL) carryforwards, research and development and Orphan Drug tax credit carryforwards. Subject to certain limitations, the Company may use these deferred tax assets to offset taxable income in future periods. Due to the Company’s history of losses and uncertainty regarding future earnings, a full valuation allowance has been recorded against the Company’s deferred tax assets, as it is more likely than not that such assets will not be realized. The net change in the total valuation allowance for the years ended December 31, 2019, 2018 and 2017 was $5.1 million, $10.4 million and $1.5 million, respectively. At December 31, 2019, the Company had federal and California NOL carryforwards of approximately $137.1 million and $117.7 million, respectively. The federal and California NOL carryforwards will begin to expire in 2030, unless previously utilized. The federal NOL generated after 2017 of $53.9 million will carryforward indefinitely and be available to offset up to 80% of future taxable income each year. At December 31, 2019, the Company also had federal and California research and development and Orphan Drug credit carryforwards of approximately $10.0 million and $2.3 million, respectively. The federal research and development and Orphan Drug credit carryforwards will begin expiring in 2031 unless previously utilized. The California research credit will carry forward indefinitely under current law. Pursuant to Sections 382 and 383 of the Internal Revenue Code (Code), the annual use of the Company’s NOL and research and development credit carryforwards may be limited in the event that a cumulative change in ownership of more than 50% occurs within a three-year period. The Company previously completed a Section 382/383 analysis regarding the limitation of NOL and research and development credit carryforwards as of December 31, 2018 and did not identify any change in ownership of more than 50% within the preceding three-year period since an ownership change was determined to have occurred at the time of the Company’s initial public offering in January 2015. The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since December 31, 2018. If the Company has experienced an ownership change at any time since December 31, 2018, utilization of the NOL or R&D credit carryforwards would be subject to an annual limitation under Section 382 of the Code. Any limitation may result in expiration of a portion of the NOL or R&D credit carryforwards before utilization. Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance with no net effect on income tax expense or the effective tax rate. On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted into law. The TCJA made significant changes to U.S. tax laws, including, but not limited to, the following: (a) reducing the federal corporate income tax rate from 35% to 21%, effective January 1, 2018; (b) eliminating the federal corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; and (c) eliminating several business deductions and credits, including deductions for certain executive compensation in excess of $1 million. As a result of the rate reduction, as of December 31, 2017, the Company reduced the deferred tax asset balance by $11.5 million. Due to the Company's full valuation allowance position, the Company has also reduced the valuation allowance by the same amount. The changes in the Company’s unrecognized tax benefits are summarized as follows (in thousands): Balance at December 31, 2016 $ 4,177 Change related to prior year positions (2,701) Increase related to current year positions 690 Balance at December 31, 2017 2,166 Change related to prior year positions — Increase related to current year positions 693 Balance at December 31, 2018 2,859 Change related to prior year positions — Increase related to current year positions 2,233 Balance at December 31, 2019 $ 5,092 The Company’s policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense. The Company has no accruals for interest or penalties in the accompanying consolidated balance sheets as of December 31, 2019 and 2018 and has not recognized interest or penalties in the accompanying consolidated statements of operations for the three years in the period ended December 31, 2019. Due to the valuation allowance recorded against the Company’s deferred tax assets, future changes in unrecognized tax benefits will not impact the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly in the next 12 months. The Company is subject to taxation in the United States and California. Due to the net operating loss carryforwards, the U.S. federal and California returns are open to examination for all years since inception. The Company has not been, nor is it currently, under examination by the federal or any state tax authority. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) Plan | 10. 401(k) Plan The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain matching contributions to the 401(k) plan. Matching contributions for the years ended December 31, 2019, 2018 and 2017 totaled approximately $173,000, $187,000 and $181,000, respectively. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | 11. Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized quarterly data for the years ended December 31, 2019 and 2018 are as follows (in thousands, except per share data): First Second Third Fourth Quarter Quarter Quarter Quarter 2019 Revenue $ — $ — $ — $ — Total operating expenses $ 7,163 $ 6,240 $ 5,081 $ 3,812 Consolidated net loss $ (7,213 ) $ (6,326 ) $ (5,199 ) $ (3,936 ) Net loss per share, basic and diluted $ (2.41 ) $ (2.11 ) $ (1.74 ) $ (1.25 ) 2018 Revenue $ 3,000 $ — $ — $ — Total operating expenses $ 11,189 $ 9,737 $ 9,083 $ 7,731 Consolidated net loss $ (8,364 ) $ (9,754 ) $ (9,085 ) $ (7,756 ) Net loss per share, basic and diluted $ (4.59 ) $ (3.28 ) $ (3.04 ) $ (2.60 ) |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 and, through its license to Santen Pharmaceutical Co. Ltd. (Santen), wet age-related macular degeneration, or wet AMD. The Company’s product development platform, which emphasizes capital efficiency, also provides to ex-U.S. companies a rapid and capital-efficient U.S. drug development solution that includes U.S. and European Union (EU) clinical development expertise and U.S. commercialization expertise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, TRACON Pharma Limited and TRACON Pharma International Limited, which were formed in September 2015 and January 2019, respectively, and are currently inactive. All significant intercompany accounts and transactions have been eliminated. |
Basis of Presentation | Basis of Presentation As of December 31, 2019, the Company has devoted substantially all of its efforts to product development, raising capital, and building infrastructure and has not realized revenues from its planned principal operations. The Company has incurred operating losses since inception. As of December 31, 2019, the Company had an accumulated deficit of $162.3 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it continues the development and commercialization of its product candidates and works to develop additional product candidates through research and development programs. At December 31, 2019, the Company had cash and cash equivalents of $16.4 million. Based on the Company’s current business plan, management believes that there is substantial doubt as to whether existing cash and cash equivalents will be sufficient to meet its obligations as they become due within one year from the date the financial statements are issued. The Company’s ability to execute its operating plan into early 2021 and beyond depends on its ability to obtain additional funding through equity offerings, debt financings, or potential licensing and collaboration arrangements. 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 2019 Purchase Agreement) the Company entered into with Aspire Capital Fund, LLC (Aspire Capital) in October 2019 for the purchase of up to $15.0 million of the Company’s common stock over a 30 month period, all of which remains available for sale , TM 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. |
Reverse Stock Split | Reverse Stock Split On November 7, 2019, the Company filed an amendment to the Company’s amended and restated certificate of incorporation to effect The par value of the common stock was not adjusted as a result of the reverse stock split. |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. The most significant estimates in the Company’s financial statements relate to revenue recognition and expenses incurred for clinical trials. 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. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the related assets, which is generally five years. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the related assets. Repairs and maintenance costs are charged to expense as incurred. |
Leases | Leases The Company determines if an arrangement contains a lease at inception. For arrangements where the Company is the lessee, operating leases are recorded as other assets, accounts payable and accrued expenses, and other long-term liabilities within the consolidated balance sheet. The Company currently does not have any finance leases. Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. |
Revenue Recognition | Revenue Recognition To date, substantially all of the Company’s revenue has been derived from its license agreements with Santen and Ambrx, Inc. (Ambrx) as described in Note 7. The terms of these arrangements include payments to the Company for the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. In accordance with ASU 2014-09, the Company performs the following five steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of these agreements: (i) identification of the contract(s) with a customer; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including any constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services transferred to the customer. Once a contract is determined to be within the scope of Accounting Standards Codification 606, Revenue from Contracts with Customers, at contract inception, the Company assesses the goods or services promised within the contract to determine those that are performance obligations and assesses whether each promised good is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when, or as, the performance obligation is satisfied. As part of the accounting for these arrangements, the Company develops assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promised goods or services, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of each arrangement that includes development, commercialization, and regulatory milestone payments, the Company evaluates whether the achievement of the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. Performance milestone payments represent a form of variable consideration. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Achievement of milestones that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable until the approvals are achieved. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis and the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations at the outset of the arrangement. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its out-licensing arrangements. The Company receives payments from its collaborators based on billing schedules established in each contract. Up-front and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under its collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. |
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 each of the three years ended December 31, 2019, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. |
Research and Development Costs | Research and Development Costs Research and development costs, including license fees, are expensed as incurred. |
Patent Costs | Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense represents the grant date fair value of employee stock option grants, employee restricted stock unit grants (RSUs), and employee stock purchase plan (ESPP) rights recognized as expense over the requisite service period of the awards (usually the vesting period) on a straight-line basis. 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 closing sales price for such stock on the date of grant. Equity award forfeitures are recorded as they occur. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than‑not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss were the same for all periods presented. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average shares of common stock outstanding for the period, without consideration for common stock equivalents and adjusted for the weighted‑average number of common shares outstanding that are subject to repurchase. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): December 31, 2019 2018 2017 Warrants to purchase common stock 1,561,903 1,561,903 10,384 Common stock options and restricted stock units 370,391 300,738 251,574 ESPP shares 1,322 1,275 365 1,933,616 1,863,916 262,323 |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases, which outlines a comprehensive lease accounting model and supersedes the then current lease guidance. The new accounting standard requires lessees to recognize lease liabilities and corresponding ROU assets for all leases with lease terms of greater than twelve months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The Company adopted ASU 2016-02 on January 1, 2019 using the modified retrospective method. Under this approach, financial information and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The Company elected the “package of practical expedients” upon adoption, which permits it to not reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use of hindsight or the practical expedient pertaining to land easements, the latter of which not being applicable. Upon adoption, the Company (i) recognized a ROU asset and lease liability on its balance sheet for its corporate office operating lease and (ii) derecognized the deferred rent balance as of December 31, 2018 under the superseded lease guidance. The ROU asset in the amount of $1.1 million has been recorded in other assets and the short-term and long-term lease liability in the amount of $0.3 million and $0.9 million, respectively, have been recorded in accounts payable and accrued expenses and other long-term liabilities, respectively, within the consolidated balance sheet. There was no impact on retained earnings or other components of equity, nor was there any impact on the statement of operations, upon adoption. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Accounting Standards Codification 718, Compensation-Stock Compensation, to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. The |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization And Accounting Policies [Abstract] | |
Schedule of potentially dilutive securities not included in the calculation of diluted net loss per share | Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): December 31, 2019 2018 2017 Warrants to purchase common stock 1,561,903 1,561,903 10,384 Common stock options and restricted stock units 370,391 300,738 251,574 ESPP shares 1,322 1,275 365 1,933,616 1,863,916 262,323 |
Short-Term Investments, Cash _2
Short-Term Investments, Cash Equivalents and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Available-for-sale Securities | Cash equivalents, which are classified as equity securities, and short-term investments, which are classified as available-for-sale securities, consisted of the following (in thousands): December 31, 2018 Cost Unrealized Gain Unrealized (Loss) Estimated Fair Value Money market funds $ 5,832 $ — $ — $ 5,832 U.S. treasury securities 13,968 — — 13,968 $ 19,800 $ — $ — $ 19,800 Classified as: Cash equivalents $ 5,832 Short-term investments 13,968 Total cash equivalents and short-term investments $ 19,800 |
Schedule of assets and liabilities measured at fair value on a recurring basis | The fair values of the Company’s assets and liabilities, which are measured at fair value on a recurring basis, were determined using the following inputs (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) At December 31, 2018 Money market funds and U.S. treasury securities, included in cash equivalents and short-term investments $ 19,800 $ — $ 19,800 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2019 2018 Computer and office equipment $ 133 $ 133 Furniture and fixtures 19 19 Leasehold improvements 21 21 173 173 Less: accumulated depreciation and amortization (150) (128) $ 23 $ 45 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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): December 31, 2019 2018 Long-term debt $ 5,600 $ 7,000 Less debt discount, net of current portion (61 ) (257) Long-term debt, net of debt discount 5,539 6,743 Less current portion of long-term debt (2,800 ) (1,400) Long-term debt, less current portion $ 2,739 $ 5,343 Current portion of long-term debt $ 2,800 $ 1,400 Current portion of debt discount (196 ) (316) Current portion of long-term debt, net $ 2,604 $ 1,084 |
Schedule of exercisable outstanding warrants for purchase of common stock issued | At December 31, 2019, 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 May 13, 2022 1,841 $ 108.60 November 14, 2023 through June 4, 2024 3,874 $ 77.40 January 25, 2024 4,669 $ 51.40 May 3, 2025 5,363 $ 26.10 15,747 As of December 31, 2019 , the Company had the following outstanding warrants for the purchase of common stock: Expiration Number of shares Exercise price May 13, 2022 1,841 $ 108.60 November 14, 2023 through June 4, 2024 3,874 $ 77.40 January 25, 2024 4,669 $ 51.40 March 27, 2024 1,369,602 $ 27.00 March 27, 2025 176,554 $ 0.10 May 3, 2025 5,363 $ 26.10 1,561,903 During the year ended December 31, 2019, no warrants were exercised. |
Schedule of future minimum principal and interest payments | Future minimum principal and interest payments under the 2018 Amended SVB Loan, including the final payment, as of December 31, 2019 are as follows (in thousands): 2020 $ 3,195 2021 3,218 6,413 Less interest and final payment (813 ) Long-term debt $ 5,600 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
Schedule of exercisable outstanding warrants for purchase of common stock issued | At December 31, 2019, 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 May 13, 2022 1,841 $ 108.60 November 14, 2023 through June 4, 2024 3,874 $ 77.40 January 25, 2024 4,669 $ 51.40 May 3, 2025 5,363 $ 26.10 15,747 As of December 31, 2019 , the Company had the following outstanding warrants for the purchase of common stock: Expiration Number of shares Exercise price May 13, 2022 1,841 $ 108.60 November 14, 2023 through June 4, 2024 3,874 $ 77.40 January 25, 2024 4,669 $ 51.40 March 27, 2024 1,369,602 $ 27.00 March 27, 2025 176,554 $ 0.10 May 3, 2025 5,363 $ 26.10 1,561,903 During the year ended December 31, 2019, no warrants were exercised. |
Schedule of restricted stock unit activity under 2015 plan | Restricted stock unit activity under the 2015 Plan is summarized as follows: Weighted Average Number of Grant Date Shares Fair Value Outstanding at December 31, 2018 9,254 $ 79.20 Granted — — Vested (4,629 ) 79.20 Forfeited (1,105 ) 79.20 Outstanding at December 31, 2019 3,520 $ 79.20 |
Schedule of stock option activity | Stock option activity under all Plans is summarized as follows: Weighted- Number of Average Options Exercise Price Balance at December 31, 2018 291,484 $ 52.78 Granted 163,297 $ 7.79 Exercised — $ — Forfeited (87,910) $ 36.65 Balance at December 31, 2019 366,871 $ 36.62 |
Schedule of outstanding stock options | Information about the Company’s outstanding stock options as of December 31, 2019 is as follows: Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Options outstanding 366,871 $ 36.62 7.25 $ — Options vested and expected to vest 366,871 $ 36.62 7.25 $ — Options exercisable 185,629 $ 58.61 5.73 $ — |
Summary of weighted-average assumptions used Black-Scholes option pricing model to determine the fair value | The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2019 2018 2017 Risk-free interest rate 2.6% 2.8% 2.1% Expected volatility 81.1% 79.6% 83.0% Expected term (in years) 6.2 6.2 6.2 Expected dividend yield — — — |
Summary of allocation of stock-based compensation expense | The allocation of stock-based compensation expense was as follows (in thousands): Years Ended December 31, 2019 2018 2017 Research and development $ 776 $ 1,462 $ 1,482 General and administrative 848 1,205 1,712 $ 1,624 $ 2,667 $ 3,194 |
Schedule of common stock reserved for future issuance | Common stock reserved for future issuance was as follows: December 31, 2019 2018 Common stock warrants 1,561,903 1,561,903 Common stock options and restricted stock units granted and outstanding 370,391 300,738 Awards available under the 2015 Plan 128,589 81,495 Shares available under the ESPP 73,472 50,135 2,134,355 1,994,271 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information, as of December 31, 2019, related to operating leases was as follows (in thousands): Cash paid within operating cash flows $ 423 ROU assets recognized in exchange for new lease obligations $ 1,143 |
Schedule of supplemental balance sheet information related to operating leases | Supplemental balance sheet information, as of December 31, 2019 Reported as: Other assets (ROU asset) $ 838 Accounts payable and accrued expenses (lease liability) $ 355 Other long-term liabilities (lease liability) 570 Total lease liabilities $ 925 Weighted average remaining lease term 2.30 Weighted average discount rate 11.3% |
Schedule of maturities of operating lease liabilities | As of December 31, 2019 2020 $ 442 2021 461 2022 156 Total lease payments 1,059 Less imputed interest (134) Total operating lease liabilities $ 925 |
Schedule of future minimum payments under the non-cancelable operating lease | Future minimum payments under the non‑cancelable operating lease as of December 31, 2018 were as follows (in thousands): 2019 $ 423 2020 442 2021 461 2022 156 $ 1,482 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of effective tax rate and federal statutory tax rate | A reconciliation of the Company’s effective tax rate and federal statutory tax rate is summarized as follows (in thousands): Years Ended December 31, 2019 2018 2017 Federal income taxes $ (4,761 ) $ (7,341 ) $ (6,686 ) State income taxes, net of federal benefit (1,381 ) (2,340 ) (1,404 ) Permanent items 149 439 1,170 Uncertain tax positions 1,828 672 (1,158 ) Research and development credits (1,253 ) (2,545 ) (2,719 ) California Net Operating Loss carryforwards — — (2,208 ) Rate change — 629 — Tax Cuts and Jobs Act — — 11,478 Other, net (75 ) — (126 ) Stock compensation 395 66 123 Change in valuation allowance 5,098 10,420 1,530 Provision for income taxes $ — $ — $ — |
Schedule of components of deferred tax assets and deferred tax Liabilities | Significant components of the Company’s deferred tax assets and deferred tax liabilities are summarized as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 36,850 $ 32,182 Research and development credits and Orphan Drug Credit 8,944 8,280 Depreciation and amortization 269 281 Right-of-use liability 194 — Other, net 1,369 1,609 Total deferred tax assets 47,626 42,352 Right-of-use asset (176 ) — Total deferred tax liabilities (176 ) — Total net deferred 47,450 42,352 Valuation allowance (47,450 ) (42,352 ) Net deferred tax assets $ — $ — |
Schedule of changes in unrecognized tax benefits | The changes in the Company’s unrecognized tax benefits are summarized as follows (in thousands): Balance at December 31, 2016 $ 4,177 Change related to prior year positions (2,701) Increase related to current year positions 690 Balance at December 31, 2017 2,166 Change related to prior year positions — Increase related to current year positions 693 Balance at December 31, 2018 2,859 Change related to prior year positions — Increase related to current year positions 2,233 Balance at December 31, 2019 $ 5,092 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly data | Summarized quarterly data for the years ended December 31, 2019 and 2018 are as follows (in thousands, except per share data): |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Additional Information (Details) | Nov. 07, 2019shares | Oct. 31, 2019USD ($) | Dec. 31, 2019USD ($)segmentshares | Feb. 28, 2019USD ($) | Dec. 31, 2018USD ($)shares | Sep. 30, 2018USD ($) |
Basis of Presentation | ||||||
Accumulated deficit | $ (162,334,000) | $ (139,660,000) | ||||
Cash, cash equivalents and short-term investments | $ 16,400,000 | |||||
Reverse split of Common Stock | 1-for-10 | |||||
Common Stock, Shares Authorized | shares | 20,000,000 | 20,000,000 | ||||
Preferred Stock, Shares Authorized | shares | 10,000,000 | 10,000,000 | 10,000,000 | |||
Property and Equipment | ||||||
Estimated useful life | 5 years | |||||
Segment reporting | ||||||
Number of reportable segments | segment | 1 | |||||
ASU 2016-02 [Member] | ||||||
Segment reporting | ||||||
Other assets (ROU asset) | $ 1,100 | |||||
Short-term lease liabilities | 300,000 | |||||
Long-term lease liabilities | 900,000 | |||||
Maximum | ||||||
Basis of Presentation | ||||||
Common Stock, Shares Authorized | shares | 200,000,000 | |||||
Minimum | ||||||
Basis of Presentation | ||||||
Common Stock, Shares Authorized | shares | 20,000,000 | |||||
Jones Trading Institutional Services LLC | Capital on Demand Sales Agreement | ||||||
Basis of Presentation | ||||||
Remaining amount available under the Sales Agreement | $ 9,200,000 | |||||
Jones Trading Institutional Services LLC | Capital on Demand Sales Agreement | Common Stock | ||||||
Basis of Presentation | ||||||
Maximum aggregate value of stock to be sold | $ 11,600,000 | $ 11,600,000 | ||||
Aspire Capital | Common Stock | ||||||
Basis of Presentation | ||||||
Maximum aggregate value of common stock to be purchase | $ 15,000,000 | |||||
Sale duration for common stock under purchase agreement | 30 months |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Not Included in the Calculation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive securities | |||
Antidilutive securities | 1,933,616 | 1,863,916 | 262,323 |
Warrants to Purchase Common Stock | |||
Antidilutive securities | |||
Antidilutive securities | 1,561,903 | 1,561,903 | 10,384 |
Common Stock Options and Restricted Stock Units | |||
Antidilutive securities | |||
Antidilutive securities | 370,391 | 300,738 | 251,574 |
ESPP Shares | |||
Antidilutive securities | |||
Antidilutive securities | 1,322 | 1,275 | 365 |
Short-Term Investments, Cash _3
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Additional Information (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Short-term investments | $ 0 | $ 13,968,000 |
Amount of transfers between levels | $ 0 | $ 0 |
Short-Term Investments, Cash _4
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Schedule of Available for Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | $ 19,800 | |
Estimated Fair Value | 19,800 | |
Short-term investments | $ 0 | 13,968 |
Estimated Fair Value | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cash equivalents | 5,832 | |
Short-term investments | 13,968 | |
Money market funds | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | 5,832 | |
Estimated Fair Value | 5,832 | |
U.S. treasury securities | ||
Short-Term Investments, Cash Equivalents and Fair Value Measurements | ||
Cost | 13,968 | |
Estimated Fair Value | $ 13,968 |
Short-Term Investments, Cash _5
Short-Term Investments, Cash Equivalents and Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - Money market funds and U.S. treasury securities, included in Cash equivalents and Short-term investments $ in Thousands | Dec. 31, 2018USD ($) |
Assets: | |
Fair value, assets | $ 19,800 |
Level 2 | |
Assets: | |
Fair value, assets | $ 19,800 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property and Equipment | ||
Property and equipment, gross | $ 173 | $ 173 |
Less: accumulated depreciation and amortization | (150) | (128) |
Property and equipment, net | 23 | 45 |
Computer and office equipment | ||
Property and Equipment | ||
Property and equipment, gross | 133 | 133 |
Furniture and fixtures | ||
Property and Equipment | ||
Property and equipment, gross | 19 | 19 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | $ 21 | $ 21 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization | $ 22 | $ 28 | $ 48 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt and Unamortized Debt Discount Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt | ||
Long-term debt | $ 5,600 | $ 7,000 |
Less debt discount, net of current portion | (61) | (257) |
Long-term debt, net of debt discount | 5,539 | 6,743 |
Less current portion of long-term debt | (2,800) | (1,400) |
Long-term debt, less current portion | 2,739 | 5,343 |
Current portion of long-term debt | 2,800 | 1,400 |
Current portion of debt discount | (196) | (316) |
Current portion of long-term debt, net | $ 2,604 | $ 1,084 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 7,000,000 | $ 8,000,000 | ||
Warrants issued | 1,561,903 | |||
Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Warrants issued | 15,747 | |||
2018 SVB Loan | Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 7,000,000 | |||
Interest rate | 9.00% | |||
Repayment period | 30 months | |||
Additional fee on final payment due (as a percent) | 4.00% | |||
Warrants issued | 5,363 | |||
Exercise price (per share) | $ 26.10 | |||
2018 SVB Loan | Silicon Valley Bank | After May 3, 2019 Prior to May 3, 2020 | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee (as a percent) | 2.00% | |||
2018 SVB Loan | Silicon Valley Bank | After May 3, 2020 | ||||
Debt Instrument [Line Items] | ||||
Prepayment fee (as a percent) | 1.00% | |||
2017 SVB Loan | Silicon Valley Bank | ||||
Debt Instrument [Line Items] | ||||
Final payment on payoff | $ 300,000 |
Long-Term Debt - Schedule of Ex
Long-Term Debt - Schedule of Exercisable Outstanding Warrants for Purchase of Common Stock Issued (Details) | Dec. 31, 2019$ / sharesshares |
Debt Instrument [Line Items] | |
Warrants issued | 1,561,903 |
Silicon Valley Bank | |
Debt Instrument [Line Items] | |
Warrants issued | 15,747 |
Silicon Valley Bank | May 13, 2022 | |
Debt Instrument [Line Items] | |
Warrants issued | 1,841 |
Exercise price (per share) | $ / shares | $ 108.60 |
Silicon Valley Bank | November 14, 2023 Through June 4, 2024 | |
Debt Instrument [Line Items] | |
Warrants issued | 3,874 |
Exercise price (per share) | $ / shares | $ 77.40 |
Silicon Valley Bank | January 25, 2024 | |
Debt Instrument [Line Items] | |
Warrants issued | 4,669 |
Exercise price (per share) | $ / shares | $ 51.40 |
Silicon Valley Bank | May 3, 2025 | |
Debt Instrument [Line Items] | |
Warrants issued | 5,363 |
Exercise price (per share) | $ / shares | $ 26.10 |
Long-Term Debt - Schedule of Fu
Long-Term Debt - Schedule of Future Minimum Principal and Interest Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 5,600 | $ 7,000 |
2018 Amended SVB Loan | ||
Debt Instrument [Line Items] | ||
2020 | 3,195 | |
2021 | 3,218 | |
Long-term debt including final payment | 6,413 | |
Less interest and final payment | (813) | |
Long-term debt | $ 5,600 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Dec. 31, 2019USD ($) |
Research and development arrangement | |
Commitments and Contingencies | |
Potential milestone payable | $ 66 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2019 | Sep. 30, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 28, 2019 | |
Class Of Stock [Line Items] | ||||||||
Conversion of warrants to purchase shares | 1,561,903 | |||||||
Warrants exercised | 0 | |||||||
Pre-Funded Warrants and Common Warrants | ||||||||
Class Of Stock [Line Items] | ||||||||
Maximum percentage of holders ownership interest in common stock to exercise warrants. | 9.99% | 9.99% | ||||||
Maximum percentage of holders ownership interest in common stock after exercise | 19.99% | 19.99% | ||||||
Common Stock | Jones Trading Institutional Services LLC | ||||||||
Class Of Stock [Line Items] | ||||||||
Stock issued during period, value, new issues | $ 2,100,000 | |||||||
Proceeds from sale of common stock | $ 5,300,000 | |||||||
Common Stock | Private Placement | ||||||||
Class Of Stock [Line Items] | ||||||||
Stock issued during period, shares, new issues | 1,193,059 | 1,193,059 | ||||||
Shares issued, price per share | $ 27 | $ 27 | ||||||
Net proceeds received in private placement | $ 36,500,000 | $ 36,500,000 | ||||||
Common Stock | Private Placement | Pre-Funded Warrants | ||||||||
Class Of Stock [Line Items] | ||||||||
Shares issued, price per share | $ 26.90 | $ 26.90 | ||||||
Conversion of warrants to purchase shares | 176,554 | 176,554 | ||||||
Exercise price (per share) | $ 0.10 | $ 0.10 | ||||||
Common Stock | Private Placement | Common Warrants | ||||||||
Class Of Stock [Line Items] | ||||||||
Shares issued, price per share | $ 1.25 | $ 1.25 | ||||||
Conversion of warrants to purchase shares | 1,369,602 | 1,369,602 | ||||||
Exercise price (per share) | $ 27 | $ 27 | ||||||
Common Stock | Capital on Demand Sales Agreement | Jones Trading Institutional Services LLC | ||||||||
Class Of Stock [Line Items] | ||||||||
Stock issued during period, shares, new issues | 0.9 | |||||||
Proceeds from sale of common stock | $ 2,400,000 | |||||||
Maximum aggregate value of stock to be sold | $ 11,600,000 | $ 11,600,000 | ||||||
Percentage of gross proceeds, required to pay for common stock sold through sales agreement | 2.50% | |||||||
Common stock remains available for sale | 9,200,000 | |||||||
Common Stock | At-the-Market Equity Offering Sales Agreement | Stifel, Nicolaus & Company, Incorporated | ||||||||
Class Of Stock [Line Items] | ||||||||
Stock issued during period, value, new issues | $ 3,500,000 | |||||||
Aspire Capital | Common Stock | ||||||||
Class Of Stock [Line Items] | ||||||||
Maximum aggregate value of common stock to be purchase | $ 15,000,000 | |||||||
Sale duration for common stock under purchase agreement | 30 months | |||||||
Stock issued during period, shares, new issues | 142,658 | |||||||
Stock issued during period, value, new issues | $ 200,000 | |||||||
Proceeds from sale of common stock | $ 800,000 | |||||||
Aspire Capital | Common Stock | 2017 Purchase Agreement | ||||||||
Class Of Stock [Line Items] | ||||||||
Maximum aggregate value of common stock to be purchase | $ 21,000,000 | |||||||
Stock issued during period, shares, new issues | 41,795 | |||||||
Proceeds from sale of common stock | $ 900,000 | |||||||
Angel Pond Capital | ||||||||
Class Of Stock [Line Items] | ||||||||
Related party transaction, description of transaction | Company paid Angel Pond Capital, an affiliate of a holder of more than 5% of the Company’s common stock and an affiliate of a member of the Company’s Board of the Directors at that time, a fee totaling approximately $1.9 million as consideration for acting as a nonexclusive placement agent for this financing | |||||||
Payment of placement agent fee | $ 1,900,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Outstanding Warrants for Purchase of Common Stock Issued (Details) | Dec. 31, 2019$ / sharesshares |
Class Of Stock [Line Items] | |
Warrants issued | 1,561,903 |
May 13, 2022 | |
Class Of Stock [Line Items] | |
Warrants issued | 1,841 |
Exercise price (per share) | $ / shares | $ 108.60 |
November 14, 2023 Through June 4, 2024 | |
Class Of Stock [Line Items] | |
Warrants issued | 3,874 |
Exercise price (per share) | $ / shares | $ 77.40 |
January 25, 2024 | |
Class Of Stock [Line Items] | |
Warrants issued | 4,669 |
Exercise price (per share) | $ / shares | $ 51.40 |
March 27, 2024 | |
Class Of Stock [Line Items] | |
Warrants issued | 1,369,602 |
Exercise price (per share) | $ / shares | $ 27 |
March 27, 2025 | |
Class Of Stock [Line Items] | |
Warrants issued | 176,554 |
Exercise price (per share) | $ / shares | $ 0.10 |
May 3, 2025 | |
Class Of Stock [Line Items] | |
Warrants issued | 5,363 |
Exercise price (per share) | $ / shares | $ 26.10 |
Stockholders' Equity - (SBC) -
Stockholders' Equity - (SBC) - Additional Information (Details) - USD ($) | Jan. 02, 2015 | Dec. 31, 2015 | Jan. 31, 2015 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock Plans | ||||||
Shares of common stock reserved for future issuance | 2,134,355 | 1,994,271 | ||||
Stock Option | ||||||
Share-based compensation | ||||||
Share price (in dollar per share) | $ 2.34 | |||||
Unrecognized compensation cost, period of recognition | 2 years 7 months 6 days | 2 years 7 months 6 days | ||||
Unrecognized compensation cost | $ 1,600,000 | $ 2,600,000 | ||||
Stock options, additional disclosures | ||||||
Granted (in dollars per share) | $ 5.55 | $ 16.69 | $ 34.68 | |||
Share price (in dollar per share) | $ 2.34 | |||||
Proceeds from exercise of stock options | $ 0.2 | $ 44,900 | ||||
Shares Options, Exercises in Period | 0 | |||||
Total intrinsic value of options exercised | $ 200,000 | 200,000 | ||||
Total fair value of options vested during the year | $ 1,500,000 | $ 2,600,000 | $ 1,900,000 | |||
Stock Option | Year One | ||||||
Stock Plans | ||||||
Grants vesting period | 1 year | |||||
Grants vesting (as a percent) | 25.00% | |||||
Stock Option | Thereafter | ||||||
Stock Plans | ||||||
Grants vesting period | 36 months | |||||
ESPP | ||||||
Stock Plans | ||||||
Shares of common stock reserved for future issuance | 18,346 | 73,472 | 50,135 | |||
Percentage of total number of shares of common stock outstanding | 1.00% | |||||
Share-based compensation | ||||||
Percentage of eligible compensation | 15.00% | |||||
Stock options, additional disclosures | ||||||
Number of shares that could potentially be issued | 36,692 | |||||
2011 Equity Incentive Plan | Stock Option | ||||||
Stock Plans | ||||||
Maximum term of options granted | 10 years | |||||
Grants vesting period | 48 months | |||||
2015 Equity Incentive Plan | ||||||
Stock Plans | ||||||
Maximum term of options granted | 10 years | |||||
Shares of common stock reserved for future issuance | 80,103 | 128,589 | 81,495 | |||
Percentage of total number of shares of common stock outstanding | 4.00% | |||||
Additional shares to be used exclusively for grant for Inducement awards | 50,000 | |||||
2015 Equity Incentive Plan | Restricted Stock Units | ||||||
Share-based compensation | ||||||
Aggregate intrinsic value of outstanding units | $ 8,000,000 | |||||
Share price (in dollar per share) | $ 2.34 | |||||
Unrecognized compensation cost related to outstanding units | $ 16,000,000 | |||||
Unrecognized compensation cost, period of recognition | 18 days | |||||
Stock options, additional disclosures | ||||||
Share price (in dollar per share) | $ 2.34 | |||||
2015 Equity Incentive Plan | Restricted Stock Units | Board of Directors | ||||||
Share-based compensation | ||||||
Total fair value of the units | $ 400,000 | $ 0.5 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units - 2015 Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Options | |
Balance (in shares) | shares | 9,254 |
Vested (in shares) | shares | (4,629) |
Forfeited (in shares) | shares | (1,105) |
Balance (in shares) | shares | 3,520 |
Weighted Average Grant Date Fair Value | |
Balance (in dollars per share) | $ / shares | $ 79.20 |
Vested (in dollars per share) | $ / shares | 79.20 |
Forfeited (in dollars per share) | $ / shares | 79.20 |
Balance (in dollars per share) | $ / shares | $ 79.20 |
Stockholders' Equity- Summary o
Stockholders' Equity- Summary of Stock Option Activity (Details) - Stock Option | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Options | |
Balance (in shares) | 291,484 |
Granted (in shares) | 163,297 |
Exercised (in shares) | 0 |
Forfeited (in shares) | (87,910) |
Balance (in shares) | 366,871 |
Weighted-Average Exercise Price | |
Balance (in dollars per share) | $ / shares | $ 52.78 |
Granted (in dollars per share) | $ / shares | 7.79 |
Forfeited (in dollars per share) | $ / shares | 36.65 |
Balance (in dollars per share) | $ / shares | $ 36.62 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Company's Outstanding Stock Option (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Options | ||
Number of shares, options vested and expected to vest | 370,391 | 300,738 |
Stock Option | ||
Number of Options | ||
Balance (in shares) | 291,484 | |
Number of shares, options vested and expected to vest | 366,871 | |
Number of shares, options exercisable | 185,629 | |
Weighted-Average Exercise Price | ||
Balance (in shares) | $ 36.62 | $ 52.78 |
Weighted-average exercise price, options vested and expected to vest (in dollars per share) | 36.62 | |
Weighted-average exercise price, options exercisable (in dollars per share) | $ 58.61 | |
Weighted-average remaining contractual term, options outstanding (in years) | 7 years 3 months | |
Weighted-average remaining contractual term, options vested and expected to vest (in years) | 7 years 3 months | |
Weighted-average remaining contractual term, options exercisable (in years) | 5 years 8 months 23 days |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Weighted-Average Assumptions Fair Value of the Employee Stock Option Grants (Details) - Stock Option | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class Of Stock [Line Items] | |||
Risk-free interest rate | 2.60% | 2.80% | 2.10% |
Expected volatility | 81.10% | 79.60% | 83.00% |
Expected term (in years) | 6 years 2 months 12 days | 6 years 2 months 12 days | 6 years 2 months 12 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) - Summary of Allocation of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class Of Stock [Line Items] | |||
Stock based compensation expense | $ 1,624 | $ 2,667 | $ 3,194 |
Research and development | |||
Class Of Stock [Line Items] | |||
Stock based compensation expense | 776 | 1,462 | 1,482 |
General and administrative | |||
Class Of Stock [Line Items] | |||
Stock based compensation expense | $ 848 | $ 1,205 | $ 1,712 |
Stockholders' Equity - Summar_4
Stockholders' Equity - Summary of Common Stock Reserved For Future Issuance (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2015 |
Stock Plans | |||
Shares of common stock reserved for future issuance | 2,134,355 | 1,994,271 | |
Number of shares, options vested and expected to vest | 370,391 | 300,738 | |
2015 Equity Incentive Plan | |||
Stock Plans | |||
Shares of common stock reserved for future issuance | 128,589 | 81,495 | 80,103 |
Common Stock. | Warrants | |||
Stock Plans | |||
Shares of common stock reserved for future issuance | 1,561,903 | 1,561,903 | |
ESPP | |||
Stock Plans | |||
Shares of common stock reserved for future issuance | 73,472 | 50,135 | 18,346 |
Collaborations - Additional Inf
Collaborations - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 28, 2019USD ($) | Nov. 30, 2018USD ($)antibody | Mar. 31, 2014USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)Milestone | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Contracts Revenue | $ 3,000,000 | $ 0 | $ 3,000,000 | $ 8,755,000 | |||
Type of Revenue [Extensible List] | tcon:CollaborationMember | tcon:CollaborationMember | tcon:CollaborationMember | ||||
Janssen | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
License and Option Agreement termination description | The License and Option Agreement may be terminated for uncured breach, bankruptcy, or the failure or inability to demonstrate clinical proof of concept with respect to a particular program during specified timeframes. In addition, the License and Option Agreement will automatically terminate 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. The Company may also terminate a program or the License and Option Agreement in its entirety without cause, subject to specified conditions. | ||||||
Janssen | License and Option Agreement | AR Mutant Program | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Development and regulatory based on milestone payments | $ 45,000,000 | ||||||
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 | ||||||
Janssen | License and Option Agreement | NIK Program | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Consideration exchanged for assets acquired | 0 | ||||||
Value given to assets acquired | $ 0 | ||||||
Bispecific Agreement | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Royalty on net sales | 50.00% | ||||||
Bispecific Agreement | I-Mab | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Maximum number of proprietary bispecific antibodies under development | antibody | 5 | ||||||
Number of biological targets | antibody | 2 | ||||||
Bispecific Agreement | I-Mab | North America | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Maximum period of selecting candidates for development and commercialization | 5 years | ||||||
Bispecific Agreement | I-Mab | Before IND | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
One time upfront payment fee | $ 10,000,000 | ||||||
Development and regulatory based on milestone payments | 90,000,000 | ||||||
Potential milestones payments received | 250,000,000 | ||||||
Bispecific Agreement | I-Mab | After IND Before Phase 1a | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
One time upfront payment fee | 25,000,000 | ||||||
Development and regulatory based on milestone payments | 125,000,000 | ||||||
Potential milestones payments received | 250,000,000 | ||||||
Bispecific Agreement | I-Mab | After Phase 1a and Before Phase 2 | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
One time upfront payment fee | 50,000,000 | ||||||
Development and regulatory based on milestone payments | 250,000,000 | ||||||
Potential milestones payments received | 250,000,000 | ||||||
Bispecific Agreement | I-Mab | After Phase 2 | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
One time upfront payment fee | 80,000,000 | ||||||
Development and regulatory based on milestone payments | 420,000,000 | ||||||
Potential milestones payments received | $ 250,000,000 | ||||||
Collaboration Agreements | I-Mab | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Consideration exchanged for assets acquired | $ 0 | ||||||
Value given to assets acquired | $ 0 | ||||||
TJ4309 Agreement | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Percentage of cost bearing | 40.00% | ||||||
TJ4309 Agreement | I-Mab | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Percentage of cost bearing | 60.00% | ||||||
Termination of agreement upon completion of clinical study | 90 days | ||||||
Additional payment | $ 35,000,000 | ||||||
TJ4309 Agreement | I-Mab | Maximum | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Non-royalty consideration | 35,000,000 | ||||||
TJ4309 Agreement | I-Mab | First Phase Clinical Study | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Termination fee | 9,000,000 | ||||||
TJ4309 Agreement | I-Mab | First Phase Two Clinical Study | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Termination fee | $ 15,000,000 | ||||||
Collaborative Arrangement | Santen | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Potential milestone that could be received | $ 155,000,000 | ||||||
One-time upfront fee | 10,000,000 | ||||||
Royalty continuation term | 12 years | ||||||
Cure period for bankruptcy or dissolution | 90 days | ||||||
Cure period for breach of payment | 30 days | ||||||
Contracts Revenue | $ 0 | $ 0 | $ 8,800,000 | ||||
Type of Revenue [Extensible List] | tcon:CollaborationMember | tcon:CollaborationMember | tcon:CollaborationMember | ||||
Adjustment to retained earnings upon adoption of ASC 2014-09 | $ 0 | ||||||
Collaborative Arrangement | Santen | ASU 2014-09 | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Milestone payments recognized as revenue | $ 0 | $ 10,000,000 | |||||
Collaborative Arrangement | Santen | Development Milestones | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Potential milestone that could be received | 20,000,000 | ||||||
Potential milestones payments received | $ 10,000,000 | $ 10,000,000 | 10,000,000 | ||||
Number of milestone payments received | Milestone | 2 | ||||||
Collaborative Arrangement | Santen | Development Milestones | ASU 2014-09 | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Milestone payments recognized as revenue | $ 10,000,000 | ||||||
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 | ||||||
Collaborative Arrangement | Santen | Development And Regulatory Milestones | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Balance of potential milestone that could be received | $ 52,500,000 | ||||||
Collaborative Arrangement | Ambrx, Inc. | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
One-time upfront fee | $ 3,000,000 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Non-cancelable operating lease expiration term | 2022-04 | ||
Non-cancelable operating lease additional term to be extended | 60 months | ||
Operating lease expense | $ 400,000 | $ 400,000 | $ 400,000 |
Finance lease liability | 0 | ||
Operating lease liability | 0 | ||
Irrevocable letter of credit provided to lessor | $ 175,000 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information related to operating leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid within operating cash flows | $ 423 |
ROU assets recognized in exchange for new lease obligations | $ 1,143 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information related to operating leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Reported as: | |
Total lease liabilities | $ 925 |
Weighted average remaining lease term | 2 years 3 months 18 days |
Weighted average discount rate | 11.30% |
Other assets (ROU asset) | |
Reported as: | |
Other assets (ROU asset) | $ 838 |
Accounts payable and accrued expenses (lease liability) | |
Reported as: | |
Total lease liabilities | 355 |
Other long-term liabilities (lease liability) | |
Reported as: | |
Total lease liabilities | $ 570 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating lease liabilities payments due | |
2020 | $ 442 |
2021 | 461 |
2022 | 156 |
Total lease payments | 1,059 |
Less imputed interest | (134) |
Total operating lease liabilities | $ 925 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payments Under the Non-Cancelable Operating Lease (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future minimum payments under non-cancelable operating lease | |
2019 | $ 423 |
2020 | 442 |
2021 | 461 |
2022 | 156 |
Total | $ 1,482 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Effective Tax Rate and Federal Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of effective tax rate and federal statutory tax rate | |||
Federal income taxes | $ (4,761) | $ (7,341) | $ (6,686) |
State income taxes, net of federal benefit | (1,381) | (2,340) | (1,404) |
Permanent items | 149 | 439 | 1,170 |
Uncertain tax positions | 1,828 | 672 | (1,158) |
Research and development credits | (1,253) | (2,545) | (2,719) |
California Net Operating Loss carryforwards | (2,208) | ||
Rate change | 629 | ||
Tax Cuts and Jobs Act | 11,478 | ||
Other, net | (75) | (126) | |
Stock compensation | 395 | 66 | 123 |
Change in valuation allowance | 5,098 | 10,420 | 1,530 |
Provision for income taxes | $ 0 | $ 0 | $ 0 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of deferred tax assets and deferred tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 36,850 | $ 32,182 |
Research and development credits and Orphan Drug Credit | 8,944 | 8,280 |
Depreciation and amortization | 269 | 281 |
Right-of-use liability | 194 | |
Other, net | 1,369 | 1,609 |
Total deferred tax assets | 47,626 | 42,352 |
Right-of-use asset | (176) | |
Total deferred tax liabilities | (176) | |
Total net deferred | 47,450 | 42,352 |
Valuation allowance | (47,450) | (42,352) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Carryforwards | |||
Net change in the total valuation allowance | $ 5,100,000 | $ 10,400,000 | $ 1,500,000 |
Corporate tax rate | 21.00% | 35.00% | |
Tax Cuts and Jobs Act of 2017 reduction in rate, reduced the deferred tax asset | $ 11,500,000 | ||
Accrual for interest or penalties for unrecognized tax benefits | 0 | $ 0 | |
Income tax interest or penalties expense for unrecognized tax benefits | $ 0 | ||
Maximum | |||
Carryforwards | |||
NOL carryforward available to offset future taxable income, percentage | 80.00% | ||
Minimum | |||
Carryforwards | |||
Percent of ownership | 50.00% | ||
Executive compensation deductions due to TCJA enactment | $ 1,000,000 | ||
Federal | |||
Carryforwards | |||
NOL carryforward | $ 137,100,000 | ||
NOL carryforward | $ 53,900,000 | ||
NOL carryforward begin to expire | 2030 | ||
Federal | Research and Development and Orphan Drug Credit Carryforwards | |||
Carryforwards | |||
Credit carryforward | $ 10,000,000 | ||
Credit carryforward begin to expire | 2031 | ||
California | |||
Carryforwards | |||
NOL carryforward | $ 117,700,000 | ||
NOL carryforward begin to expire | 2030 | ||
California | Research and Development and Orphan Drug Credit Carryforwards | |||
Carryforwards | |||
Credit carryforward | $ 2,300,000 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unrecognized tax benefits | |||
Balance, beginning of period | $ 2,859 | $ 2,166 | $ 4,177 |
Change related to prior year positions | (2,701) | ||
Increase related to current year positions | 2,233 | 693 | 690 |
Balance, end of period | $ 5,092 | $ 2,859 | $ 2,166 |
401(k) Plan - Additional Inform
401(k) Plan - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure | |||
Defined contribution, plan name | 401(k) | ||
Defined contribution amount | $ 173,000 | $ 187,000 | $ 181,000 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Data - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selected Quarterly Financial Information | |||||||||||
Revenue | $ 3,000 | $ 0 | $ 3,000 | $ 8,755 | |||||||
Total operating expenses | $ 3,812 | $ 5,081 | $ 6,240 | $ 7,163 | $ 7,731 | $ 9,083 | $ 9,737 | 11,189 | 22,296 | 37,740 | 26,965 |
Consolidated net loss | $ (3,936) | $ (5,199) | $ (6,326) | $ (7,213) | $ (7,756) | $ (9,085) | $ (9,754) | $ (8,364) | $ (22,674) | $ (34,959) | $ (19,103) |
Net loss per share, basic and diluted | $ (1.25) | $ (1.74) | $ (2.11) | $ (2.41) | $ (2.60) | $ (3.04) | $ (3.28) | $ (4.59) | $ (7.47) | $ (12.97) | $ (11.37) |