Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | TREVENA INC | |
Entity Central Index Key | 1,429,560 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 82,323,413 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 24,339 | $ 16,557 |
Marketable securities | 45,700 | 49,543 |
Prepaid expenses and other current assets | 1,196 | 1,393 |
Total current assets | 71,235 | 67,493 |
Restricted cash | 1,301 | 1,413 |
Property and equipment, net | 3,565 | 3,805 |
Intangible asset, net | 10 | 11 |
Total assets | 76,111 | 72,722 |
Current liabilities: | ||
Accounts payable | 836 | 1,424 |
Accrued expenses and other current liabilities | 3,221 | 4,303 |
Current portion of loans payable, net | 12,528 | 12,425 |
Deferred rent | 61 | |
Total current liabilities | 16,585 | 18,213 |
Loans payable, net | 7,853 | 15,725 |
Capital leases, net of current portion | 23 | 31 |
Deferred rent, net of current portion | 2,993 | 3,006 |
Warrant liability | 13 | 10 |
Other long term liabilities | 1,104 | |
Total liabilities | 27,467 | 38,089 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Common stock-$0.001 par value; 200,000,000 and 100,000,000 shares authorized, 73,507,955 and 62,310,795 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 82 | 62 |
Preferred stock-$0.001 par value; 5,000,000 shares authorized, none issued or outstanding at June 30, 2018 and December 31, 2017 | ||
Additional paid-in capital | 428,880 | 392,103 |
Accumulated deficit | (380,298) | (357,490) |
Accumulated other comprehensive loss | (20) | (42) |
Total stockholders' equity | 48,644 | 34,633 |
Total liabilities and stockholders' equity | $ 76,111 | $ 72,722 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ (0.001) | $ (0.001) |
Common stock authorized (in shares) | 200,000,000 | 100,000,000 |
Common stock issued (in shares) | 82,323,291 | 62,310,795 |
Common stock outstanding (in shares) | 82,323,291 | 62,310,795 |
Preferred stock, par value (in dollars per share) | $ (0.001) | $ (0.001) |
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Alliance revenue | $ 3,000 | $ 0 | $ 5,500 | $ 0 |
Operating expenses: | ||||
General and administrative | 3,908 | 5,232 | 14,906 | 14,496 |
Research and development | 3,350 | 10,181 | 13,076 | 41,776 |
Restructuring charges | 64 | |||
Total operating expenses | 7,258 | 15,413 | 28,046 | 56,272 |
Loss from operations | (4,258) | (15,413) | (22,546) | (56,272) |
Other income (expense): | ||||
Change in fair value of warrant liability | (7) | (2) | (3) | 53 |
Miscellaneous income | 1,428 | 628 | ||
Net (loss) gain on asset disposals | 32 | 148 | 1 | |
Interest income | 268 | 167 | 693 | 505 |
Interest expense | (515) | (732) | (1,790) | (2,041) |
Gain on foreign currency exchange | (3) | (19) | 7 | (19) |
Total other income (expense) | (225) | (586) | 483 | (873) |
Loss before income tax expense | (4,483) | (15,999) | (22,063) | (57,145) |
Foreign income tax expense | (745) | |||
Net loss attributable to common stockholders | (4,483) | (15,999) | (22,808) | (57,145) |
Other comprehensive gain (loss), net: | ||||
Unrealized gain (loss) on marketable securities | 36 | 22 | (23) | |
Other comprehensive gain (loss), net | 36 | 22 | (23) | |
Comprehensive loss | $ (4,483) | $ (15,963) | $ (22,786) | $ (57,168) |
Per share information: | ||||
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.06) | $ (0.27) | $ (0.32) | $ (0.98) |
Weighted average common shares outstanding, basic and diluted (in shares) | 77,445,675 | 60,113,327 | 70,604,827 | 58,475,079 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2017 | $ 62 | $ 392,103 | $ (357,490) | $ (42) | $ 34,633 |
Balance (in shares) at Dec. 31, 2017 | 62,310,795 | 62,310,795 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation expense | 3,519 | $ 3,519 | |||
Exercise of stock options | 83 | $ 83 | |||
Exercise of stock options (in shares) | 132,952 | 132,952 | |||
Issuance of common stock, net of issuance costs | $ 20 | 33,175 | $ 33,195 | ||
Issuance of common stock, net of issuance costs (in shares) | 19,879,544 | ||||
Unrealized gain on marketable securities | 22 | 22 | |||
Net loss | (22,808) | (22,808) | |||
Balance at Sep. 30, 2018 | $ 82 | $ 428,880 | $ (380,298) | $ (20) | $ 48,644 |
Balance (in shares) at Sep. 30, 2018 | 82,323,291 | 82,323,291 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net loss | $ (22,808) | $ (57,145) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 496 | 345 |
Stock-based compensation | 3,519 | 5,344 |
Noncash interest expense on loans | 626 | 786 |
Loss on disposal of assets | 124 | |
Revaluation of warrant liability | 3 | (53) |
Amortization (accretion) of bond premium (discount) on marketable securities | (88) | 415 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 197 | (324) |
Accounts payable and accrued expenses | (1,744) | (8,816) |
Net cash used in operating activities | (19,675) | (59,448) |
Investing activities: | ||
Purchases of property and equipment | (379) | (3,391) |
Maturities of marketable securities | 50,284 | 72,123 |
Purchases of marketable securities | (46,330) | (44,730) |
Net cash provided by (used in) investing activities | 3,575 | 24,002 |
Financing activities: | ||
Proceeds from exercise of common stock options | 83 | 355 |
Proceeds from issuance of common stock, net | 33,195 | 19,197 |
Capital lease payments | (8) | (5) |
Proceeds from loans payable, net | 9,921 | |
Repayments of loans payable, net | (9,500) | |
Net cash provided by financing activities | 23,770 | 29,468 |
Net increase (decrease) in cash and cash equivalents | 7,670 | (5,978) |
Cash, cash equivalents, and restricted cash-beginning of period | 17,970 | 25,459 |
Cash, cash equivalents, and restricted cash-end of period | 25,640 | 19,481 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 1,161 | 1,253 |
Warrants Issued | $ 184 |
Organization and Description of
Organization and Description of the Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization and Description of the Business | |
Organization and Description of the Business | 1. Organization and Description of the Business Trevena, Inc., or the Company, was incorporated in Delaware as Parallax Therapeutics, Inc. on November 9, 2007. The Company began operations in December 2007, and its name was changed to Trevena, Inc. on January 3, 2008. The Company is a biopharmaceutical company focused on the development and commercialization of new and innovative treatment options for patients in pain. The Company operates in one segment and has its principal office in Chesterbrook, Pennsylvania. Since commencing operations in 2007, the Company has devoted substantially all of its financial resources and efforts to research and development, including preclinical studies and clinical trials. The Company has never been profitable and has not yet commenced commercial operations. On November 2, 2018, the U.S. Food and Drug Administration, or FDA, issued a complete response letter, or CRL, with respect to the Company’s new drug application, or NDA, for oliceridine. In the CRL, the FDA requested additional clinical data on QT prolongation and indicated that the submitted safety database is not of adequate size for the proposed labeling. The FDA also requested certain additional nonclinical data and validation reports. The Company plans to schedule a meeting with the FDA to discuss the items identified in the CRL. On November 8, 2018, the Company announced a restructuring of its workforce. See Note 12 for additional information. Since its inception, the Company has incurred losses and negative cash flows from operations. At September 30, 2018, the Company had an accumulated deficit of $380.3 million. The Company’s net loss was $22.8 million and $57.1 million for the nine months ended September 30, 2018 and 2017, respectively. The Company expects its cash and cash equivalents of $24.3 million and marketable securities of $45.7 million as of September 30, 2018, together with interest thereon, to be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months following the date of this filing. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. The Company’s functional currency is the U.S. dollar. The financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s balance sheet as of September 30, 2018, its results of operations and its comprehensive loss for the three and nine months ended September 30, 2018 and 2017, its statement of stockholders’ equity for the period from January 1, 2018 to September 30, 2018, and its cash flows for the nine months ended September 30, 2018 and 2017. The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with the financial statements and accompanying notes included in the Company’s most recent Annual Report on Form 10‑K for the year ended December 31, 2017. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies. The financial data and other information disclosed in these notes related to the nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2018, any other interim periods, or any future year or period. Revenue In accordance with FASB’s ASC 606, Revenue from Contracts with Customers , or ASC 606 , the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service 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. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date are classified as Current portion of deferred revenue. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as Deferred revenue, net of current portion. Alliance Revenues The Company’s revenues have primarily been generated through licensing arrangements. The terms of these agreements typically include payment to the Company of one or more of the following: nonrefundable, up-front license fees; regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (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 the 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. See Note 8 for additional details surrounding the Company’s licensing arrangements. The Company also assesses whether there is an option in a contract to acquire additional goods or services. An option gives rise to a performance obligation only if the option provides a material right to the customer that it would not receive without entering into that contract. Factors that the Company considers in evaluating whether an option represents a material right include, but are not limited to: (i) the overall objective of the arrangement, (ii) the benefit the collaborator might obtain from the arrangement without exercising the option, (iii) the cost to exercise the option (e.g. priced at a significant and incremental discount) and (iv) the likelihood that the option will be exercised. With respect to options determined to be performance obligations, the Company recognizes revenue when those future goods or services are transferred or when the options expire. The Company’s revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, 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 from non-refundable, up-front fees. 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 an agreement that includes regulatory or commercial milestone payments, the Company evaluates whether each milestone is considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At each reporting period, the Company assesses the probability of achievement of each milestone under its current agreements. Research and Development Activities: Under the Company’s current collaboration and license arrangements, if the Company is entitled to reimbursement for costs for services provided by the Company, it expects such reimbursement would be an offset to research and development expenses. Royalties: If the Company is entitled to receive sales-based royalties from its collaborator, 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, provided the reported sales are reliably measurable, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Manufacturing Supply and Research Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as 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. The Company receives payments from its licensees based on schedules established in each contract. Upfront payments are recorded as deferred revenue upon receipt, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these 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 licensees and the transfer of the promised goods or services to the licensees will be one year or less. Income Taxes In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2018, the Company recorded foreign income tax expense related to withholdings associated with our ex-U.S. licensing activities. For the nine months ended September 30, 2017, the Company recorded no tax expense or benefit due to the expected 2017 loss and its historical losses. The Company has not recorded its net deferred tax asset as of either September 30, 2018 or December 31, 2017 because it maintained a full valuation allowance against all deferred tax assets as of these dates as management has determined that it is likely that the Company will not realize these future tax benefits. As of September 30, 2018 and December 31, 2017, the Company had no uncertain tax positions. In December 2017, the Tax Cuts and Jobs Act, or TCJA, was signed into law. Among other things, the TCJA permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $27.6 million to income tax expense in and a corresponding reduction in the valuation allowance in the fourth quarter of 2017. As a result, there was no impact to the Company’s statement of operations and comprehensive loss as a result of reduction in tax rates. The Company’s preliminary estimate of the TCJA and the remeasurement of its deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of the Company’s tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require further adjustments and changes in the Company’s estimates. The final determination of the TCJA and the remeasurement of the Company’s deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. Recently Adopted Accounting Standards In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, or SAB 118, which provides guidance on accounting for the tax effects of the TCJA. SAB 118 was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act and allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the TCJA enactment date. The Company was able to reasonably estimate certain effects of the TCJA as of December 31, 2017 and has not changed the preliminary estimates as of September 30, 2018. In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new standard is effective for fiscal years beginning after December 15, 2017. The adoption of this standard did not have an impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), to clarify how certain cash receipts and payments should be presented in the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017 and interim periods within that reporting period. The adoption of this standard did not have an impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer in an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additionally, in March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations . ASU 2016-08 amends the principal versus agent guidance in ASU 2014-09 to clarify how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principal to certain types of arrangements. The effective date for both standards is January 1, 2018. The Company adopted these standards on January 1, 2018 and elected the modified retrospective transition method, meaning the cumulative effect of applying the new guidance, if any, was recognized at that date as an adjustment to the opening accumulated deficit balance. There was no impact to the Company’s financial statements upon adoption, as the Company did not have any contracts with customers as of the adoption date. Recent Accounting Standards Not Yet Adopted In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides the option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings. This option would be available in each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA (or a portion thereof) is recorded. This is effective for the Company beginning after December 15, 2018, with early adoption permitted. These amendments should be applied in the period of adoption or retrospectively to each period in which the effect of the change in the U.S federal corporate income tax rate in the TCJA is recognized. The Company is evaluating the effect this standard will have on its financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to record most leases on their balance sheets and disclose key information about leasing arrangements in an effort to increase transparency and comparability among organizations. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating the effect this standard will have on its financial statements and related disclosures. For additional information on the Company’s Chesterbrook office lease, please see our Contractual Obligations and Commitments table included in Item 2 of this Form 10‑Q, which reflects total cash basis operating lease obligations of $13.4 million and does not include the impact of any future sublease revenue. See Note 12 for additional information. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement . The new guidance modifies the disclosure requirements related to fair value measurements in Topic 820, Fair Value Measurement , including removing certain previous disclosure requirements, adding certain new disclosure requirements, and modifying certain other disclosure requirements. The ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the effect this standard will have on its financial statements and related disclosures. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments ASC 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or 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 a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes among the following: · Level 1‑Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2‑Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. · Level 3‑Valuations based on inputs that are unobservable and significant to the overall fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Cash, Cash Equivalents and Marketable Securities The following table presents fair value of the Company’s cash, cash equivalents, and marketable securities as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Adjusted Unrealized Unrealized Cash and Cash Restricted Marketable Cost Gains Loss Fair Value Equivalents Cash Securities Cash $ 14,905 $ — $ — $ 14,905 $ 13,604 $ 1,301 $ — Level 1 (1): Money market funds 10,735 — — 10,735 10,735 — — U.S. treasury securities 18,385 — (10) 18,375 — — 18,375 Subtotal 29,120 — (10) 29,110 10,735 — 18,375 Level 2 (2): U.S. government agency securities 27,335 — (10) 27,325 — — 27,325 Total $ 71,360 $ — $ (20) $ 71,340 $ 24,339 $ 1,301 $ 45,700 December 31, 2017 Adjusted Unrealized Unrealized Cash and Cash Restricted Marketable Cost Gains Losses Fair Value Equivalents Cash Securities Cash $ 6,783 $ — $ — $ 6,783 $ 5,370 $ 1,413 $ — Level 1 (1): Money market funds 11,187 — — 11,187 11,187 — — U.S. treasury securities 1,991 — — 1,991 — — 1,991 Subtotal 13,178 — — 13,178 11,187 — 1,991 Level 2 (2): U.S. government agency securities 47,594 — (42) 47,552 — — 47,552 Total $ 67,555 $ — $ (42) $ 67,513 $ 16,557 $ 1,413 $ 49,543 (1) The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities. (2) The fair value of Level 2 securities is estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company classifies investments available to fund current operations as current assets on its balance sheets. As of September 30, 2018, the Company did not hold any investment securities exceeding a one-year maturity. Unrealized gains and losses on marketable securities are recorded as a separate component of accumulated other comprehensive income (loss) included in stockholders’ equity. Realized gains (losses) are included in interest income (expense) in the statement of operations and comprehensive income (loss) on a specific identification basis. The Company did not record any realized gains or losses during the three and nine months ended September 30, 2018 and 2017. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers between Level 2 and Level 3 during the nine months ended September 30, 2018 or the year ended December 31, 2017. |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2018 | |
Loans Payable | |
Loans Payable | 4. Loans Payable In September 2014, the Company entered into a loan and security agreement with Oxford Finance LLC and Pacific Western Bank (formerly Square 1Bank) (together, the lenders), pursuant to which the lenders agreed to lend the Company up to $35.0 million in a three-tranche series of term loans (Term Loans A, B, and C). Upon initially entering into the agreement, the Company borrowed $2.0 million under Term Loan A. In April 2015, the Company amended the agreement with the lenders to change the draw period for Term Loan B. In December 2015, the Company further amended the agreement with the lenders to, among other things, change the draw period for Term Loan C, modify the interest only period, and modify the maturity date of the loan. In December 2015, the Company borrowed the Term Loan B tranche of $16.5 million. The Company’s ability to draw an additional $16.5 million under Term Loan C was subject to the satisfaction of one or more specified triggers related to the results of the Company’s Phase 2b clinical trial of TRV027, which were announced in May 2016. Although those triggers were not attained, in December 2016, the Company and the lenders modified the terms and conditions under which the Company could exercise an option to draw $10.0 million of Term Loan C. In March 2017, the Company borrowed the Term Loan C tranche of $10.0 million. Borrowings under Term Loans A and B accrue interest at a fixed rate of 6.50% per annum. Borrowings under Term Loan C accrue interest at a fixed rate of 6.98% per annum. The Company was required to make payments of interest only on borrowings under the loan agreement on a monthly basis through and including January 1, 2018. Payments of principal in equal monthly installments and accrued interest began on January 1, 2018 and will continue to be due until the loan matures on March 1, 2020. Upon the last payment date of the amounts borrowed under the agreement, the Company will be required to pay a final payment fee equal to 6.6% of the aggregate amounts borrowed, which is recorded as interest expense over the term of the loans payable. In addition, if the Company repays Term Loan A, Term Loan B, or Term Loan C prior to the applicable maturity date, it will pay the lenders a prepayment fee of 1.0% of each of Term Loans A and B, and 2.0% of Term Loan C, if the prepayment occurs on or between April 1, 2018 and March 31, 2019, and 1.0% of Term Loan C, if the prepayment occurs on or after April 1, 2019. The Company’s obligations under the loan and security agreement are secured by a first priority security interest in substantially all of the assets of the Company, including the Company’s cash, cash equivalents, and marketable securities but excluding the Company’s intellectual property (together, the collateral). The Company has agreed not to pledge or otherwise encumber its intellectual property, other than through grants of certain permitted non-exclusive or exclusive licenses or other conveyances of its intellectual property. The loan and security agreement includes affirmative and restrictive covenants, including: (a) financial reporting requirements; (b) limitations on the incurrence of indebtedness; (c) limitations on liens; (d) limitations on certain merger and acquisition transactions; (e) limitations on dispositions of certain assets; (f) limitations on fundamental corporate changes (including changes in control); (g) limitations on investments; (h) limitations on payments and distributions and (i) other covenants. The agreement also contains certain events of default, including for payment defaults, breaches of covenants, a material adverse change in the Company’s business, operations or condition (financial or otherwise), a material impairment in the value of the collateral or in the prospect of repayment of the Company’s obligations to the lender, certain levies, attachments and other restraints on the Company’s business, insolvency, defaults under other agreements and misrepresentations. Upon an event of default, the lenders have the right to foreclose upon the available collateral, including the Company’s existing cash and cash equivalents and marketable securities. In connection with entering into the agreement, the Company issued to the lenders and the placement agent warrants to purchase an aggregate of 7,678 shares of Trevena’s common stock, of which 5,728 shares remain outstanding as of September 30, 2018. These detachable warrant instruments have qualified for equity classification and have been allocated upon the relative fair value of the base instrument and the warrants, according to the guidance of ASC 470-20-25-2. These warrants are exercisable immediately and have an exercise price of $5.8610 per share. The warrants may be exercised on a cashless basis and will terminate on the earlier of September 19, 2024 or the closing of a merger or consolidation transaction in which the Company is not the surviving entity. In connection with the draw of Term Loan B, the Company issued to the lenders and the placement agent additional warrants to purchase an aggregate of 34,961 shares of Trevena common stock, all of which remain outstanding at September 30, 2018. These warrants have substantially the same terms as those noted above, have an exercise price of $10.6190 per share and an expiration date of December 23, 2025. In connection with draw of Term Loan C, the Company issued to the lenders and placement agent additional warrants to purchase an aggregate of 62,241 shares of the Company’s common stock, all of which remain outstanding at September 30, 2018. These warrants have substantially the same terms as those noted above, and have an exercise price of $3.6150 per share and an expiration date of March 31, 2027. As of September 30, 2018, borrowings of $19.0 million attributable to Term Loans A, B, and C remain outstanding. Interest expense of $1.2 million and $1.3 million was recorded during the nine months ended September 30, 2018 and 2017, respectively. The Company incurred lender and third party costs of $1.0 million related to the issuance of its term loans. Per ASU 2015‑03, Interest-Imputation of Interest , debt discount and debt issuance costs are to be presented as a contra-liability to the debt on the balance sheet. These costs will be amortized to interest expense over the life of the loans using the effective interest method. Immaterial amounts of debt discount and debt issuance cost were amortized to interest expense during the three and nine months ended September 30, 2018 and 2017, respectively. The following table summarizes how the issuance of Term Loans A, B, and C are reflected on the balance sheet at September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, 2018 2017 Gross proceeds $ 19,000 $ 28,500 Debt discount and debt issuance costs (1) 1,381 (350) Carrying value 20,381 28,150 Current portion of loans payable, net 12,528 12,425 Loans payable, net $ 7,853 $ 15,725 (1) The accretion of the final fee payment is presented as part of Debt discount and debt issuance costs, a component of loans payable, as of September 30, 2018 and as other long-term liabilities as of December 31, 2017. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 5. Stockholders’ Equity Equity Offerings On December 14, 2015, the Company entered into an ATM sales agreement, or the Prior ATM Agreement, with Cowen and Company, LLC, or Cowen, to offer and sell, from time to time at the Company’s sole discretion, shares of its common stock, having an aggregate offering price of up to $75.0 million through Cowen as its sales agent. Sales under the Prior ATM Agreement are deemed to be “at the market offerings,” as defined in Rule 415 under the Securities Act of 1933, as amended, or the Securities Act. Under the Prior ATM Agreement, the Company was required to pay Cowen a commission of up to three percent of the gross sales proceeds and provided Cowen with customary indemnification rights. In the nine months ended September 30, 2018, the Company issued and sold 11,388,037 shares of common stock under the Prior ATM Agreement at a weighted average price per share of $1.80. The net offering proceeds to the Company in 2018 for sales under the Prior ATM were approximately $20.0 million after deducting related expenses, including commissions. Sales of common stock under the Prior ATM Agreement terminated on June 29, 2018 when the Company’s Registration Statement on Form S-3 (File No. 333-225685) was declared effective by the SEC. Accordingly, as of September 30, 2018, there was no remaining capacity available under this ATM facility. On June 15, 2018, the Company entered into a new ATM sales agreement with Cowen to offer and sell, from time to time at the Company’s sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million through Cowen as its sales agent. Sales of the shares are deemed to be “at the market offerings,” as defined in Rule 415 under the Securities Act. The Company is required to pay Cowen a commission of up to three percent of the gross sales proceeds and has provided Cowen with customary indemnification rights. During the third quarter of 2018, 8,491,507 shares were sold under this ATM sales agreement at a weighted average price per share of $1.60. The net offering proceeds to the Company were approximately $13.2 million after deducting related expenses, including commissions. As of September 30, 2018, there was approximately $36.4 million of available capacity under this ATM facility. Equity Incentive Plans The Company utilizes equity incentive plans to grant various forms of stock options and restricted stock to eligible employees, directors and consultants to the Company. Under all of such plans, the amount, terms of grants and exercisability provisions are determined by the board of directors or its designee. The term of the options may be up to 10 years, and options are exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than 4 years. For performance-based stock awards, we recognize expense when achievement of the performance factor is probable, over the requisite service period. The estimated grant-date fair value of the Company’s stock-based awards is amortized ratably over the awards’ service periods. Stock-based compensation expense recognized was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Research and development $ 208 $ 533 $ 952 $ 1,974 General and administrative 526 1,124 2,567 3,370 Total stock-based compensation $ 734 $ 1,657 $ 3,519 $ 5,344 Options Outstanding Weighted Average Weighted Remaining Average Contractual Number of Exercise Term Shares Price (in years) Balance, December 31, 2017 8,624,223 $ 5.22 7.17 Granted 3,191,375 1.79 Exercised (132,952) 0.63 Forfeited/Cancelled (3,106,588) 4.82 Balance, September 30, 2018 8,576,058 $ 4.15 7.80 Vested or expected to vest at September 30, 2018 8,576,058 $ 4.15 7.80 Exercisable at September 30, 2018 3,528,508 $ 5.19 6.30 The intrinsic value of the options exercisable as of September 30, 2018 was $0.4 million, based on the Company’s closing stock price of $2.12 per share and a weighted average exercise price of $5.19 per share. At September 30, 2018, there was $8.1 million of total unrecognized compensation expense related to unvested options that will be recognized over the weighted average remaining period of 2.16 years. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes model requires the Company to make certain estimates and assumptions, including estimating the fair value of the Company’s common stock, assumptions related to the expected price volatility of the Company’s stock, the period during which the options will be outstanding, the rate of return on risk-free investments and the expected dividend yield for the Company’s common stock. The per-share weighted-average grant date fair value of the options granted to employees and directors during the nine months ended September 30, 2018 and 2017 was estimated at $1.18 and $2.68 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Nine Months Ended September 30, 2018 2017 Expected term of options (in years) 5.8 6.2 Risk-free interest rate 2.7 % 2.0 % Expected volatility 74.9 % 75.6 % Dividend yield 0 % 0 % Shares Available for Future Grant At September 30, 2018, the Company has the following shares available to be granted under its equity incentive plans: Inducement 2013 Plan Plan Available at December 31, 2017 991,613 293,000 Authorized 2,492,431 — Granted (2,869,375) (322,000) Forfeited/Cancelled 2,987,088 119,500 Available at September 30, 2018 3,601,757 90,500 Shares Reserved for Future Issuance At September 30, 2018, the Company has reserved the following shares of common stock for issuance: Stock options outstanding under 2013 Plan 8,166,558 Shares available for future grant under 2013 Plan 3,601,757 Stock options outstanding under Inducement Plan 409,500 Shares available for future grant under Inducement Plan 90,500 Employee stock purchase plan 225,806 Warrants outstanding 123,091 Total shares of common stock reserved for future issuance 12,617,212 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 6. Commitments and Contingencies Legal Proceedings As of September 30, 2018, the Company was not involved in any legal proceeding that it expects to have a material effect on its business, financial condition, results of operations and cash flows. See Note 12 for additional information. |
Collaboration and Licensing Arr
Collaboration and Licensing Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Collaboration And Licensing Arrangements | |
Collaboration And Licensing Arrangements | 7. Licensing Arrangements License and Commercialization Agreement with Pharmbio Korea Inc. In April 2018, the Company entered into an exclusive license agreement with Pharmbio Korea Inc., or Pharmbio, for the development and commercialization of oliceridine for the management of moderate to severe acute pain in South Korea. Under the terms of the agreement, the Company received an upfront, non-refundable cash payment of $3.0 million (less applicable withholding taxes of $0.5 million) in June 2018, and will receive a cash commercial milestone of up to $0.5 million if oliceridine is approved in South Korea and tiered royalties on product sales in South Korea ranging from high single digits to 20%, less applicable withholding taxes. As part of the agreement, Trevena also granted Pharmbio an option to manufacture oliceridine, on a non-exclusive basis, for the development and commercialization of the product in South Korea, subject to a separate arrangement to be entered into if Pharmbio exercises the option. The license agreement is terminable by Pharmbio for any reason upon 180 days written notice. In accordance with the terms of the agreement, Pharmbio is solely responsible for all development and regulatory activities in South Korea. The parties have formed a Joint Development Committee with equal representation from the Company and Pharmbio to provide overall coordination and oversight of the development of oliceridine in South Korea. The parties also agreed to form a Joint Manufacturing and Commercialization Committee at least six months prior to the anticipated date of regulatory approval of oliceridine in South Korea to provide overall coordination and oversight of the manufacture and commercialization of oliceridine in South Korea. See Note 8 for accounting analysis under ASC 606. License Agreement with Jiangsu Nhwa Pharmaceutical Co. Ltd. In April 2018, the Company also entered into an exclusive license agreement with Jiangsu Nhwa Pharmaceutical Co. Ltd., or Nhwa, for the development and commercialization of oliceridine for the management of moderate to severe acute pain in China. Under this agreement, the Company received an upfront, non-refundable cash payment of $2.5 million (less applicable withholding taxes of $0.3 million) in July 2018, and is eligible to receive cash milestone payments of $3.0 million upon regulatory approval of oliceridine in each of the United States and China, up to an additional $6.0 million of commercialization milestones based on product sales levels in China, and a ten percent royalty on all net product sales in China, less applicable withholding taxes. As part of the agreement, Trevena also granted Nhwa an option to manufacture oliceridine, on an exclusive basis in China, for the development and commercialization of the product in China. In the second quarter of 2018, Nhwa elected to exercise this manufacturing option and the Company and Nhwa expect to enter into a separate agreement. The license agreement is terminable by Nhwa for any reason upon 180 days written notice. In accordance with the terms of the agreement, Nhwa is solely responsible for all development and regulatory activities in China. The parties have formed a Joint Development Committee with equal representation from the Company and Nhwa to provide overall coordination and oversight of the development of oliceridine in China. The parties also agreed to form a Joint Manufacturing and Commercialization Committee at least six months prior to the anticipated date of regulatory approval of oliceridine in China to provide overall coordination and oversight of the manufacture and commercialization of oliceridine in China. See Note 8 for accounting analysis under ASC 606. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Revenue | 8. Revenue The Company accounts for revenue under FASB’s ASC 606, Revenue from Contracts with Customers , or ASC 606, under which revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Alliance Revenue Alliance revenue for the three and nine months ended September 30, 2018 represents revenue from contracts with customers in licensing arrangements accounted for in accordance with ASC 606, which the Company adopted in the first quarter of 2018, as more fully described in Note 2 and Note 7. There was no previously recorded Alliance revenue. For the three and nine months ended September 30, 2018, Alliance revenue in the accompanying statements of operations and comprehensive loss is comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2018 Pharmbio Korea Inc. $ 3,000 $ 3,000 Jiangsu Nhwa Pharmaceutical Co. Ltd. — 2,500 $ 3,000 $ 5,500 Revenue related to the Pharmbio agreement was recognized in the third quarter of 2018, when the Company satisfied its performance obligation in July 2018. Revenue related to the upfront payments received from Nhwa was recognized in the second quarter of 2018, once the related performance obligation was satisfied in June 2018. Both of these performance obligations were satisfied once the Company had transferred the license and know-how and each party could begin to benefit from the transfer. The Company determined that participation in the Joint Development Committees and Joint Manufacturing and Commercialization Committees were deemed immaterial in the context of the contract. There was no Alliance revenue activity in 2017. The income tax expense resulting from these transactions represents foreign withholding taxes as a result of alliance revenue from the contracts. As the Company has incurred losses in recent years, no material U.S. federal, state, or foreign income taxes have been accrued. |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 9. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Basic and diluted net loss per common share calculation: Net loss $ (4,483) $ (15,999) $ (22,808) $ (57,145) Net loss attributable to common stockholders $ (4,483) $ (15,999) $ (22,808) $ (57,145) Weighted average common shares outstanding 77,445,675 60,113,327 70,604,827 58,475,079 Net loss per share of common stock - basic and diluted $ (0.06) $ (0.27) $ (0.32) $ (0.98) The following outstanding securities at September 30, 2018 and 2017 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti-dilutive: September 30, 2018 2017 Options outstanding 8,576,058 9,434,677 Warrants 123,091 123,091 Total 8,699,149 9,557,768 |
Other Comprehensive Loss
Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Other Comprehensive Loss | |
Other Comprehensive Loss | 10. Other Comprehensive Loss The following table presents changes in the components of accumulated other comprehensive loss (in thousands): Balance, December 31, 2017 $ (42) Net unrealized gain on marketable securities 22 Balance, September 30, 2018 $ (20) There were no reclassifications out of accumulated other comprehensive loss during the nine months ended September 30, 2018 and 2017. There was no tax effect during the three and nine months ended September 30, 2018 and 2017. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring Charges. | |
Restructuring Charges | 11. Restructuring Charges On October 11, 2017, upon the approval of the Company's Board of Directors, the Company announced a restructuring and reduction in force of approximately 30% of the Company's workforce, or 21 employees. As part of this restructuring, the Company also halted its investment in early stage research. The Company incurred pre-tax restructuring charges of $1.8 million during the year ended December 31, 2017, primarily related to severance and personnel related costs in addition to lease termination payments. As of December 31, 2017, the Company’s restructuring liability totaled $1.1 million. During the three and nine months ended September 30, 2018, the Company made severance payments totaling $0. 1 million and $1.0 million, respectively. As of September 30, 2018, the Company’s restructuring liability totals $0.1 million, which has been recorded within accrued expenses on the Company’s balance sheet. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Complete Response Letter On November 2, 2018, the Company announced that it has received a CRL from the FDA regarding the NDA for oliceridine. In the CRL, the FDA requested additional clinical data on QT prolongation and indicated that the submitted safety database is not of adequate size for the proposed labeling. The FDA also requested certain additional nonclinical data and validation reports. The Company plans to schedule a meeting with the FDA to discuss the items identified in the CRL. Restructuring On November 8, 2018, upon the approval of the Company's Board of Directors, the Company announced a workforce restructuring of approximately one-third of the Company's workforce, or 14 employees, as well as other cost saving initiatives intended to lower the Company's annualized net operating cash burn. The Company expects the restructuring to be complete by December 31, 2018. The Company has determined that the total costs related to the restructuring are approximately $1.3 million, all of which is expected to result in future cash outlays, primarily related to severance costs and related expenses. The Company will record these charges in the fourth quarter of 2018. Sublease On October 11, 2018, the Company entered into an agreement with The Vanguard Group, Inc., or Vanguard, whereby Vanguard agreed to sublease 40,565 square feet of space currently rented by the Company in Chesterbrook, PA, for an initial term of 37 months. Vanguard has an option to extend the sublease term for 3 years, and a second option to extend the sublease until November 30, 2027. The sublease provides for rent abatement for the first month of the term; thereafter, the rent payable to the Company by Vanguard under the sublease is (i) $0.50 less during months 2 through 13 of the sublease and (ii) in month 14 and thereafter of the sublease, $1.00 less than the base rent payable by the Company under its master lease with Chesterbrook Partners, L. P. Vanguard also is responsible for paying to the Company all tenant energy costs, annual operating costs, and annual tax costs attributable to the subleased space during the term of the sublease. Class Action Complaints On October 10, 2018, the Company and certain of its former executives were sued in a purported class action filed in the U.S. District Court for the Eastern District of Pennsylvania. On October 15, 2018 and November 5, 2018, two substantially similar lawsuits were filed against the Company and certain former and current executives in the same court. The plaintiffs allege that the Company and the former executives made false and misleading statements in violation of federal securities laws regarding the Company’s business, operations, and prospects, including certain statements made relating to the Company’s End-of-Phase 2 meeting with the FDA. The plaintiffs seek, among other remedies, unspecified damages, and attorneys’ fees and other costs. The Company believes that the lawsuits are without merit, and it intends to vigorously defend itself against the allegations. Management On October 1, 2018, Maxine Gowen, Ph.D. retired as the Company’s President and Chief Executive Officer and Carrie L. Bourdow was named as President and Chief Executive Officer. Dr. Gowen is continuing to serve on the Company’s Board of Directors. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification, or ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB. The Company’s functional currency is the U.S. dollar. The financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s balance sheet as of September 30, 2018, its results of operations and its comprehensive loss for the three and nine months ended September 30, 2018 and 2017, its statement of stockholders’ equity for the period from January 1, 2018 to September 30, 2018, and its cash flows for the nine months ended September 30, 2018 and 2017. The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with the financial statements and accompanying notes included in the Company’s most recent Annual Report on Form 10‑K for the year ended December 31, 2017. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies. The financial data and other information disclosed in these notes related to the nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2018, any other interim periods, or any future year or period. |
Revenue | Revenue In accordance with FASB’s ASC 606, Revenue from Contracts with Customers , or ASC 606 , the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service 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. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the twelve months following the balance sheet date are classified as Current portion of deferred revenue. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as Deferred revenue, net of current portion. Alliance Revenues The Company’s revenues have primarily been generated through licensing arrangements. The terms of these agreements typically include payment to the Company of one or more of the following: nonrefundable, up-front license fees; regulatory and commercial milestone payments; payments for manufacturing supply services; and royalties on net sales of licensed products. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (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 the 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. See Note 8 for additional details surrounding the Company’s licensing arrangements. The Company also assesses whether there is an option in a contract to acquire additional goods or services. An option gives rise to a performance obligation only if the option provides a material right to the customer that it would not receive without entering into that contract. Factors that the Company considers in evaluating whether an option represents a material right include, but are not limited to: (i) the overall objective of the arrangement, (ii) the benefit the collaborator might obtain from the arrangement without exercising the option, (iii) the cost to exercise the option (e.g. priced at a significant and incremental discount) and (iv) the likelihood that the option will be exercised. With respect to options determined to be performance obligations, the Company recognizes revenue when those future goods or services are transferred or when the options expire. The Company’s revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, 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 from non-refundable, up-front fees. 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 an agreement that includes regulatory or commercial milestone payments, the Company evaluates whether each milestone is considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At each reporting period, the Company assesses the probability of achievement of each milestone under its current agreements. Research and Development Activities: Under the Company’s current collaboration and license arrangements, if the Company is entitled to reimbursement for costs for services provided by the Company, it expects such reimbursement would be an offset to research and development expenses. Royalties: If the Company is entitled to receive sales-based royalties from its collaborator, 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, provided the reported sales are reliably measurable, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Manufacturing Supply and Research Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as 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. The Company receives payments from its licensees based on schedules established in each contract. Upfront payments are recorded as deferred revenue upon receipt, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these 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 licensees and the transfer of the promised goods or services to the licensees will be one year or less. |
Income Taxes | Income Taxes In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2018, the Company recorded foreign income tax expense related to withholdings associated with our ex-U.S. licensing activities. For the nine months ended September 30, 2017, the Company recorded no tax expense or benefit due to the expected 2017 loss and its historical losses. The Company has not recorded its net deferred tax asset as of either September 30, 2018 or December 31, 2017 because it maintained a full valuation allowance against all deferred tax assets as of these dates as management has determined that it is likely that the Company will not realize these future tax benefits. As of September 30, 2018 and December 31, 2017, the Company had no uncertain tax positions. In December 2017, the Tax Cuts and Jobs Act, or TCJA, was signed into law. Among other things, the TCJA permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $27.6 million to income tax expense in and a corresponding reduction in the valuation allowance in the fourth quarter of 2017. As a result, there was no impact to the Company’s statement of operations and comprehensive loss as a result of reduction in tax rates. The Company’s preliminary estimate of the TCJA and the remeasurement of its deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of the Company’s tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require further adjustments and changes in the Company’s estimates. The final determination of the TCJA and the remeasurement of the Company’s deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. |
Recent Accounting Pronouncements | Recently Adopted Accounting Standards In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, or SAB 118, which provides guidance on accounting for the tax effects of the TCJA. SAB 118 was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act and allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the TCJA enactment date. The Company was able to reasonably estimate certain effects of the TCJA as of December 31, 2017 and has not changed the preliminary estimates as of September 30, 2018. In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. The amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new standard is effective for fiscal years beginning after December 15, 2017. The adoption of this standard did not have an impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), to clarify how certain cash receipts and payments should be presented in the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017 and interim periods within that reporting period. The adoption of this standard did not have an impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers . ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer in an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additionally, in March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations . ASU 2016-08 amends the principal versus agent guidance in ASU 2014-09 to clarify how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principal to certain types of arrangements. The effective date for both standards is January 1, 2018. The Company adopted these standards on January 1, 2018 and elected the modified retrospective transition method, meaning the cumulative effect of applying the new guidance, if any, was recognized at that date as an adjustment to the opening accumulated deficit balance. There was no impact to the Company’s financial statements upon adoption, as the Company did not have any contracts with customers as of the adoption date. Recent Accounting Standards Not Yet Adopted In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides the option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings. This option would be available in each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA (or a portion thereof) is recorded. This is effective for the Company beginning after December 15, 2018, with early adoption permitted. These amendments should be applied in the period of adoption or retrospectively to each period in which the effect of the change in the U.S federal corporate income tax rate in the TCJA is recognized. The Company is evaluating the effect this standard will have on its financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to record most leases on their balance sheets and disclose key information about leasing arrangements in an effort to increase transparency and comparability among organizations. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within that reporting period. Early adoption is permitted. The Company is in the process of evaluating the effect this standard will have on its financial statements and related disclosures. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value of Financial Instruments | |
Schedule of cash and available-for-sale securities? adjusted cost, gross unrealized gains, gross unrealized losses and fair values by significant investment category | The following table presents fair value of the Company’s cash, cash equivalents, and marketable securities as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Adjusted Unrealized Unrealized Cash and Cash Restricted Marketable Cost Gains Loss Fair Value Equivalents Cash Securities Cash $ 14,905 $ — $ — $ 14,905 $ 13,604 $ 1,301 $ — Level 1 (1): Money market funds 10,735 — — 10,735 10,735 — — U.S. treasury securities 18,385 — (10) 18,375 — — 18,375 Subtotal 29,120 — (10) 29,110 10,735 — 18,375 Level 2 (2): U.S. government agency securities 27,335 — (10) 27,325 — — 27,325 Total $ 71,360 $ — $ (20) $ 71,340 $ 24,339 $ 1,301 $ 45,700 December 31, 2017 Adjusted Unrealized Unrealized Cash and Cash Restricted Marketable Cost Gains Losses Fair Value Equivalents Cash Securities Cash $ 6,783 $ — $ — $ 6,783 $ 5,370 $ 1,413 $ — Level 1 (1): Money market funds 11,187 — — 11,187 11,187 — — U.S. treasury securities 1,991 — — 1,991 — — 1,991 Subtotal 13,178 — — 13,178 11,187 — 1,991 Level 2 (2): U.S. government agency securities 47,594 — (42) 47,552 — — 47,552 Total $ 67,555 $ — $ (42) $ 67,513 $ 16,557 $ 1,413 $ 49,543 (1) The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities. (2) The fair value of Level 2 securities is estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
Loans Payable (Tables)
Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loans Payable | |
Schedule of Debt | The following table summarizes how the issuance of Term Loans A, B, and C are reflected on the balance sheet at September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, 2018 2017 Gross proceeds $ 19,000 $ 28,500 Debt discount and debt issuance costs (1) 1,381 (350) Carrying value 20,381 28,150 Current portion of loans payable, net 12,528 12,425 Loans payable, net $ 7,853 $ 15,725 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | |
Schedule of share-based compensation expense recognized | The estimated grant-date fair value of the Company’s stock-based awards is amortized ratably over the awards’ service periods. Stock-based compensation expense recognized was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Research and development $ 208 $ 533 $ 952 $ 1,974 General and administrative 526 1,124 2,567 3,370 Total stock-based compensation $ 734 $ 1,657 $ 3,519 $ 5,344 |
Summary of stock option activity | Options Outstanding Weighted Average Weighted Remaining Average Contractual Number of Exercise Term Shares Price (in years) Balance, December 31, 2017 8,624,223 $ 5.22 7.17 Granted 3,191,375 1.79 Exercised (132,952) 0.63 Forfeited/Cancelled (3,106,588) 4.82 Balance, September 30, 2018 8,576,058 $ 4.15 7.80 Vested or expected to vest at September 30, 2018 8,576,058 $ 4.15 7.80 Exercisable at September 30, 2018 3,528,508 $ 5.19 6.30 |
Schedule of weighted-average assumptions: | Nine Months Ended September 30, 2018 2017 Expected term of options (in years) 5.8 6.2 Risk-free interest rate 2.7 % 2.0 % Expected volatility 74.9 % 75.6 % Dividend yield 0 % 0 % |
Schedule of shares available to be granted under equity incentive plans | At September 30, 2018, the Company has the following shares available to be granted under its equity incentive plans: Inducement 2013 Plan Plan Available at December 31, 2017 991,613 293,000 Authorized 2,492,431 — Granted (2,869,375) (322,000) Forfeited/Cancelled 2,987,088 119,500 Available at September 30, 2018 3,601,757 90,500 |
Schedule of shares of common stock reserved/available | At September 30, 2018, the Company has reserved the following shares of common stock for issuance: Stock options outstanding under 2013 Plan 8,166,558 Shares available for future grant under 2013 Plan 3,601,757 Stock options outstanding under Inducement Plan 409,500 Shares available for future grant under Inducement Plan 90,500 Employee stock purchase plan 225,806 Warrants outstanding 123,091 Total shares of common stock reserved for future issuance 12,617,212 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Schedule of alliance revenue | Three Months Ended Nine Months Ended September 30, September 30, 2018 2018 Pharmbio Korea Inc. $ 3,000 $ 3,000 Jiangsu Nhwa Pharmaceutical Co. Ltd. — 2,500 $ 3,000 $ 5,500 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Net Loss Per Common Share | |
Schedule of computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Basic and diluted net loss per common share calculation: Net loss $ (4,483) $ (15,999) $ (22,808) $ (57,145) Net loss attributable to common stockholders $ (4,483) $ (15,999) $ (22,808) $ (57,145) Weighted average common shares outstanding 77,445,675 60,113,327 70,604,827 58,475,079 Net loss per share of common stock - basic and diluted $ (0.06) $ (0.27) $ (0.32) $ (0.98) |
Schedule of outstanding securities excluded from the computation of diluted weighted shares outstanding as they would have been anti-dilutive | September 30, 2018 2017 Options outstanding 8,576,058 9,434,677 Warrants 123,091 123,091 Total 8,699,149 9,557,768 |
Other Comprehensive Loss (Table
Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Comprehensive Loss | |
Schedule of components of accumulated other comprehensive loss | The following table presents changes in the components of accumulated other comprehensive loss (in thousands): Balance, December 31, 2017 $ (42) Net unrealized gain on marketable securities 22 Balance, September 30, 2018 $ (20) |
Organization and Description _2
Organization and Description of the Business (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Organization and Description of the Business | |
Number of operating segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Sep. 30, 2018 |
Income Taxes | |||||
Income tax expense (benefit) | $ 0 | ||||
U.S. federal statutory income tax rate | 21.00% | 35.00% | |||
Recent Accounting Standards | |||||
Cash basis operating lease obligations | $ 13.4 | ||||
Income Tax Expense And Valuation Allowance | |||||
Income Taxes | |||||
Income tax expense (benefit) | $ 27.6 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Hierarchy Table (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair value | ||
Transfers Level 2 to 3 assets | $ 0 | $ 0 |
Transfers Level 3 to 2 assets | 0 | 0 |
Transfers Level 2 to 3 liabilities | 0 | 0 |
Transfers Level 3 to 2 liabilities | 0 | 0 |
Total | ||
Fair value | ||
Adjusted Cost | 71,360,000 | 67,555,000 |
Unrealized Losses | (20,000) | (42,000) |
Fair Value | 71,340,000 | 67,513,000 |
Cash | ||
Fair value | ||
Adjusted Cost | 14,905,000 | 6,783,000 |
Fair Value | 14,905,000 | 6,783,000 |
Cash and Cash Equivalents | Total | ||
Fair value | ||
Fair Value | 24,339,000 | 16,557,000 |
Cash and Cash Equivalents | Cash | ||
Fair value | ||
Fair Value | 13,604,000 | 5,370,000 |
Restricted Cash | Total | ||
Fair value | ||
Fair Value | 1,301,000 | 1,413,000 |
Restricted Cash | Cash | ||
Fair value | ||
Fair Value | 1,301,000 | 1,413,000 |
Marketable Securities | Total | ||
Fair value | ||
Fair Value | 45,700,000 | 49,543,000 |
Level 1 | ||
Fair value | ||
Adjusted Cost | 29,120,000 | 13,178,000 |
Unrealized Losses | (10,000) | |
Fair Value | 29,110,000 | 13,178,000 |
Level 1 | Cash and Cash Equivalents | ||
Fair value | ||
Fair Value | 10,735,000 | 11,187,000 |
Level 1 | Marketable Securities | ||
Fair value | ||
Fair Value | 18,375,000 | 1,991,000 |
Level 1 | Money market mutual funds | ||
Fair value | ||
Adjusted Cost | 10,735,000 | 11,187,000 |
Fair Value | 10,735,000 | 11,187,000 |
Level 1 | Money market mutual funds | Cash and Cash Equivalents | ||
Fair value | ||
Fair Value | 10,735,000 | 11,187,000 |
Level 1 | U.S. treasury securities | ||
Fair value | ||
Adjusted Cost | 18,385,000 | 1,991,000 |
Unrealized Losses | (10,000) | |
Fair Value | 18,375,000 | 1,991,000 |
Level 1 | U.S. treasury securities | Marketable Securities | ||
Fair value | ||
Fair Value | 18,375,000 | 1,991,000 |
Level 2 | U.S. government agency securities | ||
Fair value | ||
Adjusted Cost | 27,335,000 | 47,594,000 |
Unrealized Losses | (10,000) | (42,000) |
Fair Value | 27,325,000 | 47,552,000 |
Level 2 | U.S. government agency securities | Marketable Securities | ||
Fair value | ||
Fair Value | $ 27,325,000 | $ 47,552,000 |
Loans Payable (Details)
Loans Payable (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2015USD ($)item$ / sharesshares | Sep. 30, 2014USD ($)tranche$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Long Term Debt | |||||||||
Interest expense | $ 515 | $ 732 | $ 1,790 | $ 2,041 | |||||
Loan and security agreement | |||||||||
Long Term Debt | |||||||||
Face amount | $ 35,000 | ||||||||
Debt number of tranches | tranche | 3 | ||||||||
Term Loan A | |||||||||
Long Term Debt | |||||||||
Face amount | $ 2,000 | ||||||||
Debt discount and debt issuance costs | $ 1,000 | ||||||||
Term Loan A | Common Stock | Warrants | |||||||||
Long Term Debt | |||||||||
Number of shares that can be purchased upon exercise of warrants (in shares) | shares | 7,678 | 5,728 | 5,728 | ||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 5.861 | ||||||||
Warrants | |||||||||
Number of shares that can be purchased upon exercise of warrants (in shares) | shares | 7,678 | 5,728 | 5,728 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 5.861 | ||||||||
Term Loan B | |||||||||
Long Term Debt | |||||||||
Face amount | $ 16,500 | ||||||||
Term Loan B | Common Stock | Warrants | |||||||||
Long Term Debt | |||||||||
Number of shares that can be purchased upon exercise of warrants (in shares) | shares | 34,961 | ||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 10.6190 | ||||||||
Warrants | |||||||||
Number of shares that can be purchased upon exercise of warrants (in shares) | shares | 34,961 | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 10.6190 | ||||||||
Term Loan C | |||||||||
Long Term Debt | |||||||||
Face amount | $ 10,000 | $ 10,000 | |||||||
Debt instrument borrowing capacity | $ 16,500 | ||||||||
Interest rate (as a percent) | 6.98% | 6.98% | |||||||
Term Loan C | Minimum | |||||||||
Long Term Debt | |||||||||
Number of specified triggers needed to be satisfied to draw on loan | item | 1 | ||||||||
Term Loan C | Common Stock | Warrants | |||||||||
Long Term Debt | |||||||||
Number of shares that can be purchased upon exercise of warrants (in shares) | shares | 62,241 | 62,241 | |||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 3.6150 | $ 3.6150 | |||||||
Warrants | |||||||||
Number of shares that can be purchased upon exercise of warrants (in shares) | shares | 62,241 | 62,241 | |||||||
Exercise price (in dollars per share) | $ / shares | $ 3.6150 | $ 3.6150 | |||||||
Term Loan C | Prepayment Date 1 | |||||||||
Long Term Debt | |||||||||
Prepayment fee percent | 2.00% | ||||||||
Term Loan C | Prepayment Date 2 | |||||||||
Long Term Debt | |||||||||
Prepayment fee percent | 1.00% | ||||||||
Term Loans A, B, and C | |||||||||
Long Term Debt | |||||||||
Final payment fee | 6.60% | ||||||||
Gross proceeds | $ 19,000 | $ 19,000 | $ 28,500 | ||||||
Interest expense | $ 1,200 | $ 1,300 | |||||||
Term Loans A and B | |||||||||
Long Term Debt | |||||||||
Interest rate (as a percent) | 6.50% | 6.50% | |||||||
Prepayment fee percent | 1.00% |
Loans Payable Schedule of Debt
Loans Payable Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Long Term Debt | ||
Current portion of loans payable, net | $ 12,528 | $ 12,425 |
Loans payable, net | 7,853 | 15,725 |
Term Loans A, B, and C | ||
Long Term Debt | ||
Gross proceeds | 19,000 | 28,500 |
Debt discount and debt issuance costs | 1,381 | (350) |
Carrying value | 20,381 | 28,150 |
Current portion of loans payable, net | 12,528 | 12,425 |
Loans payable, net | $ 7,853 | $ 15,725 |
Stockholders' Equity - Equity O
Stockholders' Equity - Equity Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 15, 2018 | Dec. 14, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Stockholders' Equity | |||||
Common stock authorized (in shares) | 200,000,000 | 100,000,000 | |||
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 | |||
Common stock, par value (in dollars per share) | $ (0.001) | $ (0.001) | |||
Issuance of common stock, net of issuance costs | $ 33,195 | ||||
Proceeds from issuance of common stock, net | $ 33,195 | $ 19,197 | |||
At-the-market sales facility - December 15, 2015 agreement | |||||
Stockholders' Equity | |||||
Issuance of common stock, net of issuance costs (in shares) | 11,388,037 | ||||
Issuance of common stock, net of issuance costs | $ 20,000 | ||||
At-the-market sales facility - December 15, 2015 agreement | Maximum | |||||
Stockholders' Equity | |||||
Offering price | $ 75,000 | ||||
Commission (as a percent) | 3.00% | ||||
At-the-market sales facility - December 15, 2015 agreement | Weighted-average | |||||
Stockholders' Equity | |||||
Offering price (in dollars per share) | $ 1.800 | ||||
At-the-market sales facility - June 15, 2018 agreement | |||||
Stockholders' Equity | |||||
Offering price | $ 50,000 | ||||
Commission (as a percent) | 3.00% | ||||
Issuance of common stock, net of issuance costs (in shares) | 8,491,507 | ||||
Offering price (in dollars per share) | $ 1.60 | ||||
Issuance of common stock, net of issuance costs | $ 13,200 | ||||
Remaining amount available | $ 36,400 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Equity Incentive Plans | |||||
Intrinsic value of options exercisable | $ 400 | $ 400 | |||
Exercisable at the end of the period (in dollars per share) | $ 5.19 | $ 5.19 | |||
Allocated Share-based Compensation Expense | $ 734 | $ 1,657 | $ 3,519 | $ 5,344 | |
Research and Development Expense | |||||
Equity Incentive Plans | |||||
Allocated Share-based Compensation Expense | 208 | 533 | 952 | 1,974 | |
General and Administrative Expense | |||||
Equity Incentive Plans | |||||
Allocated Share-based Compensation Expense | $ 526 | $ 1,124 | $ 2,567 | $ 3,370 | |
Employee Stock Option | |||||
Equity Incentive Plans | |||||
Fair value of underlying instrument (in dollars per share) | $ 2.12 | $ 2.12 | |||
Per-share weighted-average grant date fair value of options granted (in dollars per share) | $ 1.18 | $ 2.68 | |||
Unrecognized compensation expense | $ 8,100 | $ 8,100 | |||
Weighted average remaining period for recognition of unrecognized compensation expense | 2 years 1 month 28 days | ||||
Maximum | |||||
Equity Incentive Plans | |||||
Term of award | 10 years | ||||
Vesting period | 4 years | ||||
Inducement Plan | |||||
Equity Incentive Plans | |||||
Shares available for future grant (in shares) | 90,500 | 90,500 | 293,000 |
Stockholder's Equity - Options
Stockholder's Equity - Options Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Balance at the beginning of the period (in shares) | 8,624,223 | |
Granted (in shares) | 3,191,375 | |
Exercised (in shares) | (132,952) | |
Forfeited/Cancelled (in shares) | (3,106,588) | |
Balance at the end of the period (in shares) | 8,576,058 | 8,624,223 |
Vested or expected to vest at the end of the period (in shares) | 8,576,058 | |
Exercisable at the end of the period (in shares) | 3,528,508 | |
Weighted-Average Exercise Price | ||
Balance at the beginning of the period (in dollars per share) | $ 5.22 | |
Granted (in dollars per share) | 1.79 | |
Exercised (in dollars per share) | 0.63 | |
Forfeited/Cancelled (in dollars per share) | (4.82) | |
Balance at the end of the period (in dollars per share) | 4.15 | $ 5.22 |
Vested or expected to vest at the end of the period (in dollars per share) | 4.15 | |
Exercisable at the end of the period (in dollars per share) | $ 5.19 | |
Weighted Average Remaining Contractual Term | ||
Options Outstanding at the end of the period | 7 years 9 months 18 days | 7 years 2 months 1 day |
Vested or expected to vest at the end of the period | 7 years 9 months 18 days | |
Exercisable at the end of the period | 6 years 3 months 18 days |
Stockholder's Equity - Shares A
Stockholder's Equity - Shares Available for Future Grant and Issuance (Details) - shares | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Shares Reserved for Future Issuance | ||||
Stock options outstanding (in shares) | 8,576,058 | 8,624,223 | ||
Employee stock purchase plan (in shares) | 225,806 | |||
Warrants outstanding (in shares) | 123,091 | |||
Total shares of common stock reserved for issuance (in shares) | 12,617,212 | |||
2013 plan | ||||
Shares Available for Future Grant | ||||
Balance at the beginning of the period (in shares) | 991,613 | |||
Authorized (in shares) | 2,492,431 | |||
Granted (in shares) | (2,869,375) | |||
Forfeitures/Expirations (in shares) | 2,987,088 | |||
Balance at the end of the period (in shares) | 3,601,757 | |||
Shares Reserved for Future Issuance | ||||
Stock options outstanding (in shares) | 8,166,558 | |||
Shares available for future grant (in shares) | 991,613 | 3,601,757 | 991,613 | |
Inducement Plan | ||||
Shares Available for Future Grant | ||||
Balance at the beginning of the period (in shares) | 293,000 | |||
Granted (in shares) | (322,000) | |||
Forfeitures/Expirations (in shares) | 119,500 | |||
Balance at the end of the period (in shares) | 90,500 | |||
Shares Reserved for Future Issuance | ||||
Stock options outstanding (in shares) | 409,500 | |||
Shares available for future grant (in shares) | 293,000 | 90,500 | 293,000 | |
Employee Stock Option | Weighted-average | ||||
Weighted-average assumptions: | ||||
Expected term of options (in years) | 5 years 9 months 18 days | 6 years 2 months 12 days | ||
Risk-free interest rate (as a percent) | 2.70% | 2.00% | ||
Expected volatility (as a percent) | 74.90% | 75.60% | ||
Dividend yield (as a percent) | 0.00% | 0.00% |
Collaboration and Licensing A_2
Collaboration and Licensing Arrangements (Details) - Licensing agreements for development and commercialization - USD ($) $ in Millions | 1 Months Ended | |
May 31, 2018 | Apr. 30, 2018 | |
Pharmbio Korea Inc | ||
Commitments and Contingencies | ||
Upfront payment | $ 3 | |
Withholding taxes | $ 0.5 | |
Time period for written notice to terminate license agreement | 180 days | |
Pharmbio Korea Inc | Minimum | ||
Commitments and Contingencies | ||
Time period to form a committee prior to the anticipated date of regulatory approval | 6 months | |
Pharmbio Korea Inc | Maximum | ||
Commitments and Contingencies | ||
Royalties on product sales, percentage | 20.00% | |
Commercialization milestone payments | $ 0.5 | |
Jiangsu Nhwa Pharmaceutical Co Ltd | ||
Commitments and Contingencies | ||
Upfront payment | 2.5 | |
Withholding taxes | $ 0.3 | |
Royalties on product sales, percentage | 10.00% | |
Time period for written notice to terminate license agreement | 180 days | |
Milestone payment | $ 3 | |
Time period to form a committee prior to the anticipated date of regulatory approval | 6 months | |
Jiangsu Nhwa Pharmaceutical Co Ltd | Maximum | ||
Commitments and Contingencies | ||
Commercialization milestone payments | $ 6 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | ||||
Alliance revenue | $ 3,000 | $ 0 | $ 5,500 | $ 0 |
Pharmbio Korea Inc | ||||
Revenue | ||||
Alliance revenue | $ 3,000 | 3,000 | ||
Jiangsu Nhwa Pharmaceutical Co Ltd | ||||
Revenue | ||||
Alliance revenue | $ 2,500 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic and diluted net loss per common share calculation: | ||||
Net loss | $ (4,483) | $ (15,999) | $ (22,808) | $ (57,145) |
Net loss attributable to common stockholders | $ (4,483) | $ (15,999) | $ (22,808) | $ (57,145) |
Weighted average common shares outstanding (in shares) | 77,445,675 | 60,113,327 | 70,604,827 | 58,475,079 |
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.06) | $ (0.27) | $ (0.32) | $ (0.98) |
Outstanding securities excluded from computation of diluted weighted shares outstanding (in shares) | 8,699,149 | 9,557,768 | ||
Employee Stock Option | ||||
Basic and diluted net loss per common share calculation: | ||||
Outstanding securities excluded from computation of diluted weighted shares outstanding (in shares) | 8,576,058 | 9,434,677 | ||
Warrants | ||||
Basic and diluted net loss per common share calculation: | ||||
Outstanding securities excluded from computation of diluted weighted shares outstanding (in shares) | 123,091 | 123,091 |
Other Comprehensive Loss (Detai
Other Comprehensive Loss (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Comprehensive Loss | ||||
Balance | $ 34,633,000 | |||
Balance | $ 48,644,000 | 48,644,000 | ||
Reclassifications out of accumulated other comprehensive income or loss, net of tax | 0 | $ 0 | ||
Tax effect | 0 | $ 0 | 0 | $ 0 |
Accumulated Other Comprehensive Income (Loss) | ||||
Other Comprehensive Loss | ||||
Balance | (42,000) | |||
Net unrealized loss on marketable securities | 22,000 | |||
Balance | $ (20,000) | $ (20,000) |
Restructuring Charges (Details)
Restructuring Charges (Details) $ in Thousands | Oct. 11, 2017employee | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Restructuring Charges | ||||
Number of positions eliminated, percent | 30.00% | |||
Number of positions eliminated | employee | 21 | |||
Restructuring charges | $ 64 | $ 1,800 | ||
Restructuring liability | $ 100 | 100 | $ 1,100 | |
Employee Severance | ||||
Restructuring Charges | ||||
Restructuring charges | $ 100 | $ 1,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Nov. 08, 2018USD ($)employee | Oct. 11, 2018ft²$ / ft² | Oct. 11, 2017employee | Nov. 05, 2018lawsuit |
Restructuring and reduction in force | ||||
Number of positions eliminated, percent | 30.00% | |||
Number of positions eliminated | employee | 21 | |||
Subsequent event | ||||
Sublease | ||||
Number of square feet of space being subleased | ft² | 40,565 | |||
Initial term of the sublease | 37 months | |||
Term of optional sublease extension | 3 years | |||
Subsequent event | Pending Litigation | ||||
Subsequent Event. | ||||
Number of additional lawsuits | lawsuit | 2 | |||
Subsequent event | Vanguard | ||||
Sublease | ||||
Amount per square foot less for rent during months 2 to 13 | $ / ft² | 0.50 | |||
Amount per square foot for rent after month 14 | $ / ft² | 1 | |||
Subsequent event | Employee Severance | ||||
Restructuring and reduction in force | ||||
Number of positions eliminated, percent | 33.33% | |||
Number of positions eliminated | employee | 14 | |||
Total costs related to the restructuring | $ | $ 1.3 |