| Significant Accounting Policies (Policies) | 3 Months Ended |
| Mar. 31, 2014 |
| Use of Estimates | ' |
| Use of Estimates: |
| The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of expenses for the period presented. Accordingly, actual results could differ from those estimates. Significant estimates include the cost of services provided by consultants who manage clinical trials and conduct research and clinical trials on behalf of the Company that are billed on a delayed basis. As the actual costs become known, the Company adjusts its estimated cost in that period. The value of stock-based compensation includes estimates based on future events, which are difficult to predict. It is at least reasonably possible that a change in the estimates will occur in the near term. |
| Principles of Consolidation | ' |
| Principles of Consolidation: |
| The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
| Cash and Cash Equivalents | ' |
| Cash and Cash Equivalents: |
| The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. |
| Licensor Receivable | ' |
| Licensor Receivable: |
| Licensor receivable represents external “out of pocket” clinical trial costs in excess of an agreed upon “cap” for clinical trials that were ongoing at the time the licensing agreement with the Licensor was reached. The licensing agreement allows the Company to bill the Licensor for all external “out of pocket” costs in excess of the cap cost on a quarterly basis. The Licensor, per the license agreement, has 60 days to review the invoice and supporting documentation. Licensor receivable includes both invoiced and non-invoiced costs in excess of the cap. The Company has not established a reserve against this receivable (approximately $13.3 million and $9.8 million at March 31, 2014 and 2013, respectively). |
| Marketable Securities | ' |
| Marketable Securities: |
| The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, if material, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary results 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. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned. |
| Assets Measured at Fair Value on a Recurring Basis | ' |
| Assets Measured at Fair Value on a Recurring Basis: |
| Accounting Standards Codification, or ASC 820, Fair Value Measurement, provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest. |
|
| | | | | | | | | | | | | | | | |
| Level 1: | | Quoted prices in active markets for identical assets or liabilities. | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Level 2: | | Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Level 3: | | Valuations derived from valuation techniques in which one or more significant inputs are unobservable. | | | | | | | | | | | | | | |
| Following are the major categories of assets measured at fair value on a recurring basis as of March 31, 2014, and December 31, 2013, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands): |
|
| | | | | | | | | | | | | | | | |
| March 31, 2014 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Cash equivalents | | $ | 156,010 | | | $ | — | | | $ | — | | | $ | 156,010 | |
| Marketable securities—corporate bonds | | | — | | | | 23,650 | | | | — | | | | 23,650 | |
| Marketable securities—commercial paper | | | — | | | | 9,084 | | | | | | | | 9,084 | |
| | | | | | | | | | | | | | | | |
| | $ | 156,010 | | | $ | 32,734 | | | $ | — | | | $ | 188,744 | |
| | | | | | | | | | | | | | | | |
| | | | |
| December 31, 2013 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Cash equivalents | | $ | 41,598 | | | $ | — | | | $ | — | | | $ | 41,598 | |
| Marketable securities—corporate bonds | | | — | | | | 40,904 | | | | — | | | | 40,904 | |
| | | | | | | | | | | | | | | | |
| | $ | 41,598 | | | $ | 40,904 | | | $ | — | | | $ | 82,502 | |
| | | | | | | | | | | | | | | | |
| The Company’s investments in short-term investment securities are exposed to price fluctuations. The fair value measurements for short-term investment securities are based upon the quoted price in active markets multiplied by the number of securities owned, exclusive of any transaction costs and without any adjustments to reflect discounts that may be applied to selling a large block of securities at one time. |
| Concentration of Risk | ' |
| Concentration of Risk: |
| Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents. The Company’s cash and cash equivalents in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at March 31, 2014, were approximately $164.6 million. The Company does not believe it is exposed to any significant credit risk. |
| Property and Equipment | ' |
| Property and Equipment: |
| Property and equipment are recorded at cost and depreciated over estimated useful lives ranging from three to five years using the straight-line method. Leasehold improvements are recorded at cost and amortized over the shorter of their useful lives or the term of the lease by use of the straight-line method. Maintenance and repair costs are charged to operations as incurred. |
| The Company assesses the impairment of long-lived assets, primarily property and equipment, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through March 31, 2014. |
| Research and Development Expenses | ' |
| Research and Development Expenses: |
| Research and development, or R&D, expenses are charged to operations as incurred. The major components of R&D costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization, or CRO, costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s cost accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. The objective of the Company’s accrual policy is to match the recording of expenses in the condensed consolidated financial statements to the actual services received and efforts expended. As actual costs become known, the Company adjusts its accruals in that period. |
| In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and deposits in the accompanying condensed consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. |
| Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs. |
| Research and Development Reimbursement | ' |
| Research and Development Reimbursement: |
| The licensing agreement set a “cap” on the amount of external expenses the Company would incur, beginning January 1, 2012, in completing the clinical trials transferred from the Licensor to the Company. The license agreement stipulates that the Licensor would be responsible for all external expenses associated with the transferred clinical trials and that the Company would invoice for such costs on a quarterly basis. The Licensor has 60 days to review the invoice and supporting documentation. All amounts reimbursed from the Licensor represent charges for services provided by third parties and not the Company. Accordingly, the Company has elected to treat the reimbursed costs as “pass-through” expenses billable to the Licensor and as an offset to research and development expenses. R&D expenses are recorded net of any excess cap costs billed to the Licensor. The Company recognized approximately $3.5 million and $4.6 million of excess cap costs during the three months ended March 31, 2014 and 2013, respectively. |
| Stock-Based Compensation | ' |
| Stock-Based Compensation: |
| Stock option awards: |
| ASC 718, Compensation-Stock Compensation, or ASC 718, requires the fair value of all share-based payments to employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee option grants are generally valued at the date of grant, or grant date, and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718 for companies with a short period of publicly traded stock history, the Company’s estimate of expected volatility is based on the average expected volatilities of a sampling of five companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. ASC 718 does not allow companies to account for option forfeitures as they occur; instead, estimated option forfeitures must be calculated when the option is granted to reduce the option expense to be recognized over the life of the award and updated upon receipt of further information as to the amount of options expected to be forfeited. Due to its limited history, the Company uses the simplified method to determine the expected life of the option grants. |
| Performance shares: |
| The performance shares are valued on the grant date and the fair value of the performance award is equal to the market price of the Company’s common stock on the grant date. The performance share expense is recognized based on the Company’s estimate of a range of probabilities that the Company’s closing common stock price will be lower or higher than the Company’s common stock price on the grant date on the vesting dates. Based on the range of probabilities, the expense is calculated and recognized over the 3-year vesting period. |
| Net Loss per Common Share | ' |
| Net Loss per Common Share: |
| Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the periods presented, as required by ASC 260, Earnings per Share. Diluted earnings per common share are the same as basic earnings per share because the assumed exercise of the Company’s outstanding options are anti-dilutive. For the three months ended March 31, 2014, potentially dilutive securities excluded from the calculations were 3,059,849 shares issuable upon exercise of options, 28,411 performance shares issuable upon attainment of stock price objectives over the vesting period of the performance share awards and 2,116,250 shares issuable upon exercise of an outstanding warrant. For the three months ended March 31, 2013, potentially dilutive securities excluded from the earnings per common share calculation were 2,145,584 shares issuable upon exercise of options and 2,116,250 shares issuable upon exercise of an outstanding warrant. |
| Deferred Rent | ' |
| Deferred Rent: |
| The Company has entered into operating lease agreements for its corporate offices in Los Angeles and South San Francisco that contain provisions for future rent increases, leasehold improvement allowances and rent abatements. The Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease term. The difference between the rent expense recorded and the amount paid is credited or charged to deferred rent, which is reflected as a separate line item in the accompanying condensed consolidated balance sheets. Additionally, the Company recorded as deferred rent the cost of the leasehold improvements paid by the landlord, which is amortized on a straight-line basis over the term of the lease. |
