Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 11, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'FATE THERAPEUTICS INC | ' |
Entity Central Index Key | '0001434316 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 20,569,399 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $45,530 | $54,036 |
Prepaid expenses and other current assets | 94 | 615 |
Total current assets | 45,624 | 54,651 |
Property and equipment, net | 1,240 | 810 |
Restricted cash | 122 | 122 |
Other assets | 24 | ' |
Total assets | 47,010 | 55,583 |
Current liabilities: | ' | ' |
Accounts payable | 1,157 | 682 |
Accrued expenses | 2,010 | 2,039 |
Current portion of deferred rent | 77 | 53 |
Repurchase liability for unvested equity awards | 57 | 94 |
Long-term debt, current portion | 611 | 1,732 |
Total current liabilities | 3,912 | 4,600 |
Deferred rent | 76 | 135 |
Accrued expenses | 57 | ' |
Long-term debt, net of current portion | 9,389 | ' |
Commitments and contingencies (Note 4) | ' | ' |
Stockholders' deficit: | ' | ' |
Preferred stock, $0.001 par value; authorized shares-5,000,000 at September 30, 2014 and December 31, 2013; no shares issued or outstanding | ' | ' |
Common stock, $0.001 par value; authorized shares - 150,000,000 at September 30, 2014 and December 31, 2013; issued and outstanding shares - 20,562,773 at September 30, 2014 and 20,434,080 at December 31, 2013 | 21 | 20 |
Additional paid-in capital | 139,714 | 137,337 |
Accumulated deficit | -106,159 | -86,509 |
Total stockholders' equity | 33,576 | 50,848 |
Total liabilities and stockholder's equity | $47,010 | $55,583 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Condensed Consolidated Balance Sheets | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized shares | 150,000,000 | 150,000,000 |
Common stock, issued shares | 20,562,773 | 20,434,080 |
Common stock, outstanding shares | 20,562,773 | 20,434,080 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Collaboration revenue | ' | $209 | ' | $626 |
Grant revenue | ' | ' | ' | 345 |
Total revenue | ' | 209 | ' | 971 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 4,080 | 3,378 | 12,570 | 8,976 |
General and administrative | 1,904 | 1,979 | 6,391 | 4,768 |
Total operating expenses | 5,984 | 5,357 | 18,961 | 13,744 |
Loss from operations | -5,984 | -5,148 | -18,961 | -12,773 |
Other income (expense): | ' | ' | ' | ' |
Interest income | ' | 2 | 1 | 3 |
Interest expense | -187 | -230 | -258 | -418 |
Loss on extinguishment of debt | -432 | ' | -432 | ' |
Change in fair value of exchangeable shares | ' | -728 | ' | -1,988 |
Change in fair value of warrant liability | ' | 31 | ' | 21 |
Total other expense, net | -619 | -925 | -689 | -2,382 |
Net loss and comprehensive loss | ($6,603) | ($6,073) | ($19,650) | ($15,155) |
Net loss per common share, basic and diluted (in dollars per share) | ($0.32) | ($4.81) | ($0.96) | ($12.24) |
Weighted-average common shares used to compute basic and diluted net loss per share (in shares) | 20,489,181 | 1,262,546 | 20,435,073 | 1,238,567 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating activities | ' | ' |
Net loss | ($19,650) | ($15,155) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 371 | 442 |
Issuances of common stock for technology | ' | 13 |
Stock-based compensation | 1,822 | 1,169 |
Amortization of discounts and debt issuance costs | 17 | 129 |
Noncash interest expense | 76 | 134 |
Deferred rent | -35 | -185 |
Deferred revenue | ' | -63 |
Stock-based milestone charges and change in fair value of exchangeable shares | 375 | 2,334 |
Change in fair value of preferred stock warrants | ' | -21 |
Loss on disposal of assets | ' | 18 |
Loss on extinguishment of debt | 3 | ' |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expenses and other current assets | 520 | -960 |
Accounts payable and accrued expenses | 236 | 1,350 |
Net cash used in operating activities | -16,265 | -10,795 |
Investing activities | ' | ' |
Purchase of property and equipment | -611 | -94 |
Proceeds from sale of property and equipment | ' | 6 |
Net cash used in investing activities | -611 | -88 |
Financing activities | ' | ' |
Issuance of common stock, net of repurchases and issuance costs | 146 | 23 |
Proceeds from (cost of) initial public offering, net of offering costs | ' | -1,381 |
Issuance of convertible promissory notes | ' | 23,736 |
Proceeds from long-term debt | 10,000 | ' |
Payments on long-term debt | -1,750 | -1,500 |
Payments for the issuance of debt | -26 | ' |
Net cash provided by financing activities | 8,370 | 20,878 |
Net change in cash and cash equivalents | -8,506 | 9,995 |
Cash and cash equivalents at beginning of the period | 54,036 | 9,087 |
Cash and cash equivalents at end of the period | $45,530 | $19,082 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Organization and Summary of Significant Accounting Policies | ' |
Organization and Summary of Significant Accounting Policies | ' |
1.Organization and Summary of Significant Accounting Policies | |
Organization | |
Fate Therapeutics, Inc. (the “Company”) was incorporated in the state of Delaware on April 27, 2007 and has its principal operations in San Diego, California. The Company is a clinical-stage biopharmaceutical company engaged in the discovery and development of pharmacologic modulators of adult stem cells to treat severe, life-threatening diseases. The Company’s approach utilizes established pharmacologic modalities, such as small molecules, and targets well-characterized biological mechanisms to program the fate and enhance the therapeutic potential of adult stem cells. The Company’s lead product candidate, ProHema, is an ex vivo programmed hematopoietic stem cell, or HSC, therapeutic, which is currently in clinical development for patients undergoing HSC transplantation. The Company is also applying its reprogramming modulators to develop human induced pluripotent stem cell-derived cellular therapeutics, and evaluating the in vivo programming of muscle satellite stem cells using its Wnt7a-based protein analogs for muscle regeneration. | |
As of September 30, 2014, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure and has not generated revenues from its planned principal operations. | |
Initial Public Offering | |
On October 4, 2013, the Company completed its initial public offering (the “IPO”) whereby it sold 7,666,667 shares of common stock at a public offering price of $6.00 per share. Gross proceeds from the offering were $46.0 million. After giving effect to underwriting discounts, commissions and other cash costs related to the offering, net proceeds were $40.5 million. In addition, each of the following occurred in connection with the completion of the IPO on October 4, 2013: | |
the conversion of all outstanding shares of the Company’s convertible preferred stock into 7,229,590 shares of the Company’s common stock; | |
the conversion of the Company’s $22.1 million of outstanding principal and accrued interest on its convertible notes into 3,679,401 shares of common stock, the write-off of $0.3 million of unamortized debt discount and the related cash repayment of $1.7 million of outstanding principal and accrued interest on the convertible notes; | |
the issuance of 480,763 shares of the Company’s common stock pursuant to the redemption of an aggregate of 900,000 exchangeable shares of Fate Therapeutics (Canada) Inc. (“Fate Canada”), a subsidiary of the Company incorporated in Canada, resulting in a final fair value adjustment charge of $0.4 million on the exchangeable shares, and the resultant reclassification of the exchangeable share liability to additional paid-in capital; | |
the conversion of warrants to purchase 230,000 shares of convertible preferred stock into warrants to purchase 36,074 shares of the Company’s common stock, and the resultant reclassification of the warrant liability to additional paid-in capital; and | |
the filing of an amended and restated certificate of incorporation on October 3, 2013, authorizing 150,000,000 shares of common stock and 5,000,000 shares of undesignated preferred stock. | |
Use of Estimates | |
The Company’s consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to the valuation of equity awards and accrued expenses. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its subsidiaries, Fate Canada, Fate Therapeutics Ltd., incorporated in the United Kingdom, and Destin Therapeutics Inc., incorporated in Canada, which was dissolved in June 2014. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. | |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash in readily available checking and savings accounts, money market accounts and money market funds. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. | |
Unaudited Interim Financial Information | |
The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and following the requirements of the United States Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2013, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed by the Company with the SEC on March 17, 2014. The results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. | |
Revenue Recognition | |
The Company recognizes revenues when all four of the following criteria are met: (i) persuasive evidence that an agreement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. | |
Revenue arrangements with multiple elements are analyzed to determine whether the elements can be divided into separate units of accounting or whether the elements must be accounted for as a single unit of accounting. The Company divides the elements into separate units of accounting and applies the applicable revenue recognition criteria to each of the elements, if the delivered elements have value to the customer on a stand-alone basis, if the arrangement includes a general right of return relative to the delivered elements, and if the delivery or performance of the undelivered elements is considered probable and substantially within the Company’s control. | |
For transactions entered into prior to 2011, revenue was allocated to each element based on its relative fair value when objective and reliable evidence of fair value existed for all elements in an arrangement. If an element was sold on a stand-alone basis, the fair value of the element was the price charged for the element. When the Company was unable to establish fair value for delivered elements or when fair value of undelivered elements had not been established, revenue was deferred until all elements were delivered or until fair value could be objectively determined for any undelivered elements. | |
Beginning in 2011, revenue has been allocated to each element at the inception of the arrangement using the relative selling price method that is based on a three-tier hierarchy. The relative selling price method requires that the estimated selling price for each element be based on vendor-specific objective evidence (“VSOE”) of fair value, which represents the price charged for each element when it is sold separately or, for an element not yet being sold separately, the price established by management. When VSOE of fair value is not available, third-party evidence (“TPE”) of fair value is acceptable, or a best estimate of selling price is used if neither VSOE nor TPE is available. A best estimate of selling price should be consistent with the objective of determining the price at which the Company would transact if the element were sold regularly on a stand-alone basis and should also take into account market conditions and company-specific factors. The Company has not entered into or materially modified any multiple element arrangements subsequent to 2010. | |
Revenue arrangements with multiple elements may include license fees, research and development payments, milestone payments, other contingent payments, and royalties on any product sales derived from collaborations. The Company recognizes nonrefundable license fees with stand-alone value as revenue at the time that the Company has satisfied all performance obligations, and recognizes license fees without stand-alone value as revenue in combination with any undelivered performance obligations. The Company recognizes a research and development payment as revenue over the term of the collaboration agreement as contracted amounts are earned, or reimbursable costs are incurred, under the agreement, where contracted amounts are considered to be earned in relative proportion to the performance required under the applicable agreement. The Company recognizes a milestone payment, which is contingent upon the achievement of a milestone in its entirety, as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. These criteria include the following: (i) the consideration being earned should be commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (ii) the consideration being earned should relate solely to past performance; (iii) the consideration being earned should be reasonable relative to all deliverables and payment terms in the arrangement; and (iv) the milestone should be considered in its entirety and cannot be bifurcated into substantive and nonsubstantive components. Any amounts received pursuant to revenue arrangements with multiple elements prior to satisfying the Company’s revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheets. | |
Revenue from government grants is recorded when reimbursable expenses are incurred under the grant in accordance with the terms of the grant award. The receivable for reimbursable amounts that have not been collected is reflected in prepaid and other current assets. | |
Stock-Based Compensation | |
Stock-based compensation expense represents the cost of the grant date fair value of employee stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis, net of estimated forfeitures. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants for which vesting is subject to both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, with the exception of option grants for which vesting is subject to both performance-based milestones and market conditions, which are valued using a lattice-based model. | |
The Company accounts for stock options and restricted stock awards to non-employees using the fair value approach. Stock options and restricted stock awards to non-employees are subject to periodic revaluation over their vesting terms. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the performance condition has been achieved. | |
Net Loss per Common Share | |
Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Excluded from the weighted-average number of shares outstanding are shares which have been issued upon the early exercise of stock options and are subject to future vesting and unvested restricted stock totaling 73,248 shares and 102,998 shares for the three months ended September 30, 2014 and 2013, respectively, and 80,645 shares and 111,614 shares for the nine months ended September 30, 2014 and 2013, respectively. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents for the periods presented include convertible preferred stock, warrants for the purchase of convertible preferred stock and common stock, exchangeable shares and common stock options outstanding under the Company’s stock option plan. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. | |
For the three and nine months ended September 30, 2014, the Company realized a net loss of $6.6 million and $19.7 million, respectively. Shares of potentially dilutive securities totaled 2.5 million for each of the three and nine months ended September 30, 2014, including options to purchase 2.4 million shares of common stock. | |
For the three and nine months ended September 30, 2013, the Company realized a net loss of $6.1 million and $15.2 million, respectively. Shares of potentially dilutive securities totaled 9.5 million for each of the three and nine months ended September 30, 2013. | |
Recent Accounting Pronouncements | |
In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-15, which defined management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosure. ASU 2014-15 defined the term substantial doubt and requires an assessment for a period of one year after the date of the issuance of the financial statements. It requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The guidance becomes effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance will have on its Consolidated Financial Statements. | |
In June 2014, the FASB issued ASU 2014-10, which eliminated all incremental financial reporting requirements from U.S. GAAP for development stage entities, including inception-to-date information, the labeling of financial statements as those of a development stage entity, and the disclosure of a description of the development stage activities in which the entity is engaged. Effectively, ASU 2014-10 removed the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification. For public business entities, this guidance is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption of the guidance is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. Accordingly, the Company elected the early adoption of ASU 2014-10 beginning with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, and will no longer disclose inception-to-date information or incremental financial reporting requirements related to development stage entities. | |
In May 2014, the FASB issued ASU 2014-09, which created a single, principle-based revenue recognition model that will supersede and replace nearly all existing U.S. GAAP revenue recognition guidance. Entities will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The model provides that entities follow five steps: (i) identify the contract 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, and (v) recognize revenue. For public business entities, the guidance becomes effective for annual reporting periods beginning after December 15, 2016, and interim periods therein. The Company is currently evaluating the impact the adoption of this guidance will have on its Consolidated Financial Statements. | |
Asset_Acquisition_of_Verio_The
Asset Acquisition of Verio Therapeutics Inc. | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Asset Acquisition of Verio Therapeutics Inc. | ' | |||||||||
Asset Acquisition of Verio Therapeutics Inc. | ' | |||||||||
2.Asset Acquisition of Verio Therapeutics Inc. | ||||||||||
On April 7, 2010, the Company acquired Verio Therapeutics Inc. (“Verio”), a development stage company headquartered in Ottawa, Ontario to gain access to its exclusively licensed intellectual property. | ||||||||||
In connection with the asset acquisition of Verio, the stockholders of Verio received 900,000 non-voting shares of Fate Canada (the “Exchangeable Shares”) that were initially exchangeable into 138,462 shares of the Company’s common stock and, subject to the validation of certain scientific data and the achievement of certain preclinical, clinical, commercial and financial milestones, were exchangeable for up to 884,605 shares of the Company’s common stock. | ||||||||||
As a result of the Company’s IPO on October 4, 2013, 480,763 shares of the Company’s common stock were issued during the fourth quarter of 2013 pursuant to the redemption of the Exchangeable Shares. The total number of shares of the Company’s common stock issued upon the exchange of the Exchangeable Shares as a result of the IPO increased from 138,462 shares of the Company’s common stock to a total of 480,763 shares of the Company’s common stock based upon the achievement of certain contractual milestones. | ||||||||||
During the nine months ended September 30, 2014, based on the achievement of certain preclinical milestones, 38,463 shares of the Company’s common stock were earned and issued, resulting in a $0.4 million charge to research and development expense. | ||||||||||
In addition to the 38,463 shares of the Company’s common stock earned and issued during the nine months ended September 30, 2014, the Company may issue an additional 365,379 shares of the Company’s common stock based on the achievement of additional contractual milestones as follows: (i) 38,461 shares for the achievement of certain preclinical milestones, (ii) 211,538 shares for the achievement of certain clinical milestones and (iii) 115,380 shares for the achievement of certain commercialization milestones, such that the maximum aggregate number of shares of the Company’s common stock issuable in connection with the Verio acquisition is 884,605. | ||||||||||
At the date of the achievement of a milestone, the fair value of the additional shares is charged to research and development expense and recorded in additional paid-in capital. Prior to the Company’s IPO, at the end of each reporting period, any changes in the fair value of Exchangeable Shares resulting from changes in the fair value of the underlying common stock of the Company were recorded as a component of other income (expense). As of the IPO date, the exchangeable share liability was reclassified into additional paid-in capital. | ||||||||||
The changes in the number of shares of the Company’s common stock issuable, and the initial fair value of the issuable shares, are summarized as follows (in thousands, except share and per share amounts): | ||||||||||
Common | Fair Value Per | Initial Fair | ||||||||
Stock | Share of | Value of | ||||||||
Underlying | Common Stock | |||||||||
Common Stock | ||||||||||
April 2010 | 138,462 | $ | 1.69 | $ | 234 | |||||
March 2011 | 92,308 | 1.69 | 156 | |||||||
May 2011 | 115,380 | 1.69 | 195 | |||||||
April 2012 | 57,691 | 1.37 | 78 | |||||||
July 2013 | 76,922 | 4.49 | 346 | |||||||
March 2014 | 38,463 | 9.74 | 375 | |||||||
519,226 | $ | 1,384 | ||||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value Measurements | ' |
Fair Value Measurements | ' |
3.Fair Value Measurements | |
The carrying amounts of accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Based on the borrowing rates currently available to the Company for loans with similar terms, which is considered a Level 2 input as described below, the Company believes that the fair value of long-term debt approximates its carrying value. | |
The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |
Level 1: Observable inputs such as quoted prices in active markets; | |
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |
Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents. As of September 30, 2014 and December 31, 2013, the carrying amount of cash equivalents was $40.3 million and $52.3 million, respectively, which approximates fair value and was determined based upon Level 1 inputs. Cash equivalents primarily consisted of money market funds. As of September 30, 2014 and December 31, 2013, the Company did not hold any Level 2 or Level 3 financial assets that are recorded at fair value on a recurring basis. | |
Financial liabilities that were measured at fair value on a recurring basis included the preferred stock warrant liability and exchangeable shares for the periods the liabilities were outstanding. None of the Company’s non-financial assets or liabilities is recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented. | |
As of September 30, 2014 and December 31, 2013, the Company had no material liabilities measured at fair value on a recurring basis. | |
LongTerm_Debt_Commitments_and_
Long-Term Debt, Commitments and Contingencies | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Long-Term Debt, Commitments and Contingencies | ' | |||||||
Long-Term Debt, Commitments and Contingencies | ' | |||||||
4.Long-Term Debt, Commitments and Contingencies | ||||||||
Long-Term Debt | ||||||||
Long-term debt and unamortized discount balances (excluding convertible debt) are as follows (in thousands): | ||||||||
September | December | |||||||
30, 2014 | 31, 2013 | |||||||
Long-term debt | $ | 10,000 | $ | 1,750 | ||||
Less current portion of long-term debt | (611 | ) | (1,750 | ) | ||||
Long-term debt, net of current portion | $ | 9,389 | $ | — | ||||
Current portion of long-term debt | $ | 611 | $ | 1,750 | ||||
Current portion of debt discount | — | (18 | ) | |||||
Current portion of long-term debt, net | $ | 611 | $ | 1,732 | ||||
On July 30, 2014, the Company entered into an Amended and Restated Loan and Security Agreement (the “Restated LSA”) with Silicon Valley Bank (the “Bank”), collateralized by substantially all of our assets, excluding certain intellectual property. The Restated LSA amends and restates the Loan and Security Agreement, dated as of January 5, 2009, as amended, by and between the Company and the Bank (the “Loan Agreement”). Pursuant to the Restated LSA, the Bank agreed to make loans to the Company in an aggregate principal amount of up to $20.0 million, comprised of (i) a $10.0 million term loan, funded at the closing date (the “Term A Loan”) and (ii) subject to the achievement of a specified clinical milestone relating to the Company’s Phase 2 clinical trial of ProHema, additional term loans totaling up to $10.0 million in the aggregate, which are available until December 31, 2014 (each, a “Term B Loan”), the first of which shall be at least $5.0 million. | ||||||||
The Term A Loan matures on January 1, 2018, and the Term B Loans mature on the first day of the 42nd month after the month in which each Term B Loan funds. The Term A Loan bears interest at a fixed annual rate of 6.94% and the Term B Loans will bear interest at a fixed annual rate, to be determined on the funding date, equal to the greater of (i) 6.75% or (ii) the sum of (a) U.S. Treasury note yield to maturity for a thirty-six (36) month term, plus (b) five hundred ninety (590) basis points. Interest is payable in cash on a monthly basis beginning the first day of each month following the month in which the funding date of each loan occurs. The Company is required to make a monthly payment of interest only during the first twelve months following the funding date of each loan, and thereafter is required to repay the principal and accrued interest under each loan in thirty equal monthly installments based on a thirty-month amortization schedule. The Company is required to make a final payment fee of 7.5% of the funded amount for the Term A Loan and any Term B Loan. | ||||||||
A portion of the proceeds from the Term A Loan were used to repay loans outstanding under the Loan Agreement and to pay for transaction fees related to the Restated LSA, including a commitment fee of $0.4 million paid by the Company to the Bank. The remaining proceeds are expected to be used for working capital purposes, including the advancement of the Company’s research programs. Net proceeds from the Term A Loan, after repayment of loans outstanding under the Loan Agreement and transaction fees, were $8.8 million. | ||||||||
The Company determined the repayment of the Loan Agreement was a debt extinguishment, and accounted for the Term A Loan at fair value as of the issuance date accordingly. During each of the three and nine months ended September 30, 2014, the Company recorded a loss on debt extinguishment of $0.4 million, primarily related to the commitment fee paid to the Bank and $0.2 million in aggregate interest expense related to the Restated LSA. The Company determined the effective interest rate of the Term A Loan to be 10.3%. | ||||||||
As part of the financing, upon the Company’s election to access the first Term B Loan, the Company will issue to the Bank and one or more of its affiliates warrants to purchase up to an aggregate of $0.4 million in shares of the Company’s common stock (the “Warrants”), subject to adjustment, at an exercise price equal to the average price per share over the preceding ten trading days prior to the funding of the first Term B Loan. | ||||||||
Facility Lease | ||||||||
The Company leases certain office and laboratory space from a stockholder of the Company under a non-cancelable operating lease. The lease expires in June 2016. The lease is subject to additional charges for common area maintenance and other costs. In connection with the lease, the Company entered into a cash-collateralized irrevocable standby letter of credit in the amount of $0.1 million. As of September 30, 2014, future minimum payments under the operating lease are $1.7 million. | ||||||||
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Stockholders' Equity | ' | |||||||||||||
Stockholders' Equity | ' | |||||||||||||
5.Stockholders’ Equity | ||||||||||||||
Stock option activity under all equity and stock option plans is summarized as follows: | ||||||||||||||
Number of | Weighted- | |||||||||||||
Options | Average Price | |||||||||||||
Balance at December 31, 2013 | 1,726,991 | $ | 2.3 | |||||||||||
Granted | 873,720 | 6.66 | ||||||||||||
Canceled | (61,999 | ) | 5.29 | |||||||||||
Exercised | (90,230 | ) | 1.66 | |||||||||||
Balance at September 30, 2014 | 2,448,482 | $ | 3.81 | |||||||||||
The allocation of stock-based compensation for all options and restricted stock awards is as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Research and development | $ | 280 | $ | 581 | $ | 1,074 | $ | 686 | ||||||
General and administrative | 247 | 401 | 748 | 483 | ||||||||||
$ | 527 | $ | 982 | $ | 1,822 | $ | 1,169 | |||||||
As of September 30, 2014, the outstanding options included 160,526 performance-based options for which the achievement of the performance-based vesting provisions was determined not to be probable. The aggregate grant date fair value of these unvested options at September 30, 2014 was $0.7 million. | ||||||||||||||
As of September 30, 2014, the unrecognized compensation cost related to outstanding options (excluding those with performance-based conditions) was $4.5 million and is expected to be recognized as expense over approximately 2.8 years. | ||||||||||||||
The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: | ||||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.9 | % | 1.6 | % | ||||||||||
Expected volatility | 94.5 | % | 90.2 | % | ||||||||||
Expected term (in years) | 6.0 | 6.1 | ||||||||||||
Expected dividend yield | 0.0 | % | 0.0 | % | ||||||||||
The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the non-employee stock option grants were as follows: | ||||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 2.2 | % | 2.1 | % | ||||||||||
Expected volatility | 92.2 | % | 90.3 | % | ||||||||||
Remaining contractual term (in years) | 6.7 | 7.3 | ||||||||||||
Expected dividend yield | 0.0 | % | 0.0 | % | ||||||||||
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Organization and Summary of Significant Accounting Policies | ' |
Initial Public Offering | ' |
Initial Public Offering | |
On October 4, 2013, the Company completed its initial public offering (the “IPO”) whereby it sold 7,666,667 shares of common stock at a public offering price of $6.00 per share. Gross proceeds from the offering were $46.0 million. After giving effect to underwriting discounts, commissions and other cash costs related to the offering, net proceeds were $40.5 million. In addition, each of the following occurred in connection with the completion of the IPO on October 4, 2013: | |
the conversion of all outstanding shares of the Company’s convertible preferred stock into 7,229,590 shares of the Company’s common stock; | |
the conversion of the Company’s $22.1 million of outstanding principal and accrued interest on its convertible notes into 3,679,401 shares of common stock, the write-off of $0.3 million of unamortized debt discount and the related cash repayment of $1.7 million of outstanding principal and accrued interest on the convertible notes; | |
the issuance of 480,763 shares of the Company’s common stock pursuant to the redemption of an aggregate of 900,000 exchangeable shares of Fate Therapeutics (Canada) Inc. (“Fate Canada”), a subsidiary of the Company incorporated in Canada, resulting in a final fair value adjustment charge of $0.4 million on the exchangeable shares, and the resultant reclassification of the exchangeable share liability to additional paid-in capital; | |
the conversion of warrants to purchase 230,000 shares of convertible preferred stock into warrants to purchase 36,074 shares of the Company’s common stock, and the resultant reclassification of the warrant liability to additional paid-in capital; and | |
the filing of an amended and restated certificate of incorporation on October 3, 2013, authorizing 150,000,000 shares of common stock and 5,000,000 shares of undesignated preferred stock. | |
Use of Estimates | ' |
Use of Estimates | |
The Company’s consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to the valuation of equity awards and accrued expenses. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its subsidiaries, Fate Canada, Fate Therapeutics Ltd., incorporated in the United Kingdom, and Destin Therapeutics Inc., incorporated in Canada, which was dissolved in June 2014. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash in readily available checking and savings accounts, money market accounts and money market funds. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company recognizes revenues when all four of the following criteria are met: (i) persuasive evidence that an agreement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. | |
Revenue arrangements with multiple elements are analyzed to determine whether the elements can be divided into separate units of accounting or whether the elements must be accounted for as a single unit of accounting. The Company divides the elements into separate units of accounting and applies the applicable revenue recognition criteria to each of the elements, if the delivered elements have value to the customer on a stand-alone basis, if the arrangement includes a general right of return relative to the delivered elements, and if the delivery or performance of the undelivered elements is considered probable and substantially within the Company’s control. | |
For transactions entered into prior to 2011, revenue was allocated to each element based on its relative fair value when objective and reliable evidence of fair value existed for all elements in an arrangement. If an element was sold on a stand-alone basis, the fair value of the element was the price charged for the element. When the Company was unable to establish fair value for delivered elements or when fair value of undelivered elements had not been established, revenue was deferred until all elements were delivered or until fair value could be objectively determined for any undelivered elements. | |
Beginning in 2011, revenue has been allocated to each element at the inception of the arrangement using the relative selling price method that is based on a three-tier hierarchy. The relative selling price method requires that the estimated selling price for each element be based on vendor-specific objective evidence (“VSOE”) of fair value, which represents the price charged for each element when it is sold separately or, for an element not yet being sold separately, the price established by management. When VSOE of fair value is not available, third-party evidence (“TPE”) of fair value is acceptable, or a best estimate of selling price is used if neither VSOE nor TPE is available. A best estimate of selling price should be consistent with the objective of determining the price at which the Company would transact if the element were sold regularly on a stand-alone basis and should also take into account market conditions and company-specific factors. The Company has not entered into or materially modified any multiple element arrangements subsequent to 2010. | |
Revenue arrangements with multiple elements may include license fees, research and development payments, milestone payments, other contingent payments, and royalties on any product sales derived from collaborations. The Company recognizes nonrefundable license fees with stand-alone value as revenue at the time that the Company has satisfied all performance obligations, and recognizes license fees without stand-alone value as revenue in combination with any undelivered performance obligations. The Company recognizes a research and development payment as revenue over the term of the collaboration agreement as contracted amounts are earned, or reimbursable costs are incurred, under the agreement, where contracted amounts are considered to be earned in relative proportion to the performance required under the applicable agreement. The Company recognizes a milestone payment, which is contingent upon the achievement of a milestone in its entirety, as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. These criteria include the following: (i) the consideration being earned should be commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (ii) the consideration being earned should relate solely to past performance; (iii) the consideration being earned should be reasonable relative to all deliverables and payment terms in the arrangement; and (iv) the milestone should be considered in its entirety and cannot be bifurcated into substantive and nonsubstantive components. Any amounts received pursuant to revenue arrangements with multiple elements prior to satisfying the Company’s revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheets. | |
Revenue from government grants is recorded when reimbursable expenses are incurred under the grant in accordance with the terms of the grant award. The receivable for reimbursable amounts that have not been collected is reflected in prepaid and other current assets. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
Stock-based compensation expense represents the cost of the grant date fair value of employee stock option grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis, net of estimated forfeitures. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants for which vesting is subject to both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, with the exception of option grants for which vesting is subject to both performance-based milestones and market conditions, which are valued using a lattice-based model. | |
The Company accounts for stock options and restricted stock awards to non-employees using the fair value approach. Stock options and restricted stock awards to non-employees are subject to periodic revaluation over their vesting terms. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the performance condition has been achieved. | |
Net Loss Per Common Share | ' |
Net Loss per Common Share | |
Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Excluded from the weighted-average number of shares outstanding are shares which have been issued upon the early exercise of stock options and are subject to future vesting and unvested restricted stock totaling 73,248 shares and 102,998 shares for the three months ended September 30, 2014 and 2013, respectively, and 80,645 shares and 111,614 shares for the nine months ended September 30, 2014 and 2013, respectively. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents for the periods presented include convertible preferred stock, warrants for the purchase of convertible preferred stock and common stock, exchangeable shares and common stock options outstanding under the Company’s stock option plan. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. | |
For the three and nine months ended September 30, 2014, the Company realized a net loss of $6.6 million and $19.7 million, respectively. Shares of potentially dilutive securities totaled 2.5 million for each of the three and nine months ended September 30, 2014, including options to purchase 2.4 million shares of common stock. | |
For the three and nine months ended September 30, 2013, the Company realized a net loss of $6.1 million and $15.2 million, respectively. Shares of potentially dilutive securities totaled 9.5 million for each of the three and nine months ended September 30, 2013. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-15, which defined management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosure. ASU 2014-15 defined the term substantial doubt and requires an assessment for a period of one year after the date of the issuance of the financial statements. It requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The guidance becomes effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance will have on its Consolidated Financial Statements. | |
In June 2014, the FASB issued ASU 2014-10, which eliminated all incremental financial reporting requirements from U.S. GAAP for development stage entities, including inception-to-date information, the labeling of financial statements as those of a development stage entity, and the disclosure of a description of the development stage activities in which the entity is engaged. Effectively, ASU 2014-10 removed the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification. For public business entities, this guidance is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption of the guidance is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. Accordingly, the Company elected the early adoption of ASU 2014-10 beginning with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, and will no longer disclose inception-to-date information or incremental financial reporting requirements related to development stage entities. | |
In May 2014, the FASB issued ASU 2014-09, which created a single, principle-based revenue recognition model that will supersede and replace nearly all existing U.S. GAAP revenue recognition guidance. Entities will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The model provides that entities follow five steps: (i) identify the contract 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, and (v) recognize revenue. For public business entities, the guidance becomes effective for annual reporting periods beginning after December 15, 2016, and interim periods therein. The Company is currently evaluating the impact the adoption of this guidance will have on its Consolidated Financial Statements. | |
Asset_Acquisition_of_Verio_The1
Asset Acquisition of Verio Therapeutics Inc. (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Asset Acquisition of Verio Therapeutics Inc. | ' | |||||||||
Asset Acquisition of Verio Therapeutics Inc. | ' | |||||||||
The changes in the number of shares of the Company’s common stock issuable, and the initial fair value of the issuable shares, are summarized as follows (in thousands, except share and per share amounts): | ||||||||||
Common | Fair Value Per | Initial Fair | ||||||||
Stock | Share of | Value of | ||||||||
Underlying | Common Stock | |||||||||
Common Stock | ||||||||||
April 2010 | 138,462 | $ | 1.69 | $ | 234 | |||||
March 2011 | 92,308 | 1.69 | 156 | |||||||
May 2011 | 115,380 | 1.69 | 195 | |||||||
April 2012 | 57,691 | 1.37 | 78 | |||||||
July 2013 | 76,922 | 4.49 | 346 | |||||||
March 2014 | 38,463 | 9.74 | 375 | |||||||
519,226 | $ | 1,384 | ||||||||
LongTerm_Debt_Commitments_and_1
Long-Term Debt, Commitments and Contingencies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Long-Term Debt, Commitments and Contingencies | ' | |||||||
Schedule of long-term debt and unamortized discount balances (excluding convertible debt) | ' | |||||||
Long-term debt and unamortized discount balances (excluding convertible debt) are as follows (in thousands): | ||||||||
September | December | |||||||
30, 2014 | 31, 2013 | |||||||
Long-term debt | $ | 10,000 | $ | 1,750 | ||||
Less current portion of long-term debt | (611 | ) | (1,750 | ) | ||||
Long-term debt, net of current portion | $ | 9,389 | $ | — | ||||
Current portion of long-term debt | $ | 611 | $ | 1,750 | ||||
Current portion of debt discount | — | (18 | ) | |||||
Current portion of long-term debt, net | $ | 611 | $ | 1,732 | ||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Stockholders' Equity | ' | |||||||||||||
Summary of stock option activity under the Plan | ' | |||||||||||||
Number of | Weighted- | |||||||||||||
Options | Average Price | |||||||||||||
Balance at December 31, 2013 | 1,726,991 | $ | 2.3 | |||||||||||
Granted | 873,720 | 6.66 | ||||||||||||
Canceled | (61,999 | ) | 5.29 | |||||||||||
Exercised | (90,230 | ) | 1.66 | |||||||||||
Balance at September 30, 2014 | 2,448,482 | $ | 3.81 | |||||||||||
Schedule of allocation of stock-based compensation for all options and restricted stock awards | ' | |||||||||||||
The allocation of stock-based compensation for all options and restricted stock awards is as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Research and development | $ | 280 | $ | 581 | $ | 1,074 | $ | 686 | ||||||
General and administrative | 247 | 401 | 748 | 483 | ||||||||||
$ | 527 | $ | 982 | $ | 1,822 | $ | 1,169 | |||||||
Employee Stock Option [Member] | ' | |||||||||||||
Stockholders' Equity | ' | |||||||||||||
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | ' | |||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 1.9 | % | 1.6 | % | ||||||||||
Expected volatility | 94.5 | % | 90.2 | % | ||||||||||
Expected term (in years) | 6.0 | 6.1 | ||||||||||||
Expected dividend yield | 0.0 | % | 0.0 | % | ||||||||||
Non Employee Stock Option [Member] | ' | |||||||||||||
Stockholders' Equity | ' | |||||||||||||
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | ' | |||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Risk-free interest rate | 2.2 | % | 2.1 | % | ||||||||||
Expected volatility | 92.2 | % | 90.3 | % | ||||||||||
Remaining contractual term (in years) | 6.7 | 7.3 | ||||||||||||
Expected dividend yield | 0.0 | % | 0.0 | % | ||||||||||
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Initial Public Offering | ' | ' | ' | ' | ' |
Shares sold in initial public offering | 7,666,667 | ' | ' | ' | ' |
Public offering price (in dollars per share) | $6 | ' | ' | ' | ' |
Gross proceeds from initial public offering | $46,000,000 | ' | ' | ' | ' |
Net proceeds from initial public offering | 40,500,000 | ' | -1,381,000 | ' | ' |
Conversion convertible preferred stock into common stock | 7,229,590 | ' | ' | ' | ' |
Principal amount of convertible debt converted | 22,100,000 | ' | ' | ' | ' |
Number of shares of common stock issued upon conversion of debt | 3,679,401 | ' | ' | ' | ' |
Write-off of unamortized debt discount | 300,000 | ' | ' | ' | ' |
Repayment of outstanding principal and unpaid accrued interest in cash | 1,700,000 | ' | ' | ' | ' |
Common stock issuable upon redemption of exchangeable shares | 480,763 | ' | ' | ' | ' |
Exchangeable shares of Fate Canada for redemption | 900,000 | ' | ' | ' | ' |
Fair value adjustment charge on the exchangeable shares | $400,000 | $728,000 | $1,988,000 | ' | ' |
Warrants to purchase shares of convertible preferred stock which are converted | 230,000 | ' | ' | ' | ' |
Warrants to purchase shares of common stock issued on conversion | 36,074 | ' | ' | ' | ' |
Common stock authorized (in shares) | 150,000,000 | ' | ' | 150,000,000 | 150,000,000 |
Preferred stock authorized (in shares) | 5,000,000 | ' | ' | 5,000,000 | 5,000,000 |
Organization_and_Summary_of_Si3
Organization and Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue Recognition [Abstract] | ' | ' | ' | ' |
Four criteria needed for Company to recognize revenue | ' | ' | '(i)B persuasive evidence that an agreement exists; (ii)B delivery of the products and/or services has occurred; (iii)B the selling price is fixed or determinable; and (iv)B collectability is reasonably assured. | ' |
Shares excluded from weighted average number of shares attributable to share based payments | 73,248 | 102,998 | 80,645 | 111,614 |
Net loss | ($6,603) | ($6,073) | ($19,650) | ($15,155) |
Potentially dilutive securities (in shares) | 2,500,000 | 9,500,000 | 2,500,000 | 9,500,000 |
Options to purchase shares of common stock included in potentially dilutive securities (in shares) | 2,400,000 | ' | 2,400,000 | ' |
Asset_Acquisition_of_Verio_The2
Asset Acquisition of Verio Therapeutics Inc. (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Oct. 04, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Apr. 07, 2010 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Maximum [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | Verio Therapeutics Inc [Member] | ||||||
Maximum [Member] | Period Of April2010 [Member] | Period Of March2011 [Member] | Period Of May2011 [Member] | Period Of April2012 [Member] | Period Of July2013 [Member] | Period Of March2014 [Member] | |||||||||
Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock issued | ' | ' | ' | ' | ' | 884,605 | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issuable on exchange of Common Stock | ' | ' | ' | ' | ' | ' | 138,462 | 519,226 | 884,605 | 138,462 | 92,308 | 115,380 | 57,691 | 76,922 | 38,463 |
Common stock issued pursuant to the redemption of the exchangeable shares | 480,763 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deemed earned common stock yet to be issued (in shares) | ' | ' | ' | ' | ' | ' | ' | 38,463 | ' | ' | ' | ' | ' | ' | ' |
Research and development expense | ' | $4,080 | $3,378 | $12,570 | $8,976 | ' | ' | $400 | ' | ' | ' | ' | ' | ' | ' |
Potential increase in shares issuable on exchange of Exchangeable Shares based on achievement of additional milestones | ' | ' | ' | ' | ' | ' | ' | 365,379 | ' | ' | ' | ' | ' | ' | ' |
Potential increase in shares issuable on exchange of Exchangeable Shares based on achievement of certain preclinical milestones | ' | ' | ' | ' | ' | ' | ' | 38,461 | ' | ' | ' | ' | ' | ' | ' |
Potential increase in shares issuable on exchange of Exchangeable Shares based on achievement of certain clinical milestones | ' | ' | ' | ' | ' | ' | ' | 211,538 | ' | ' | ' | ' | ' | ' | ' |
Potential increase in shares issuable on exchange of Exchangeable Shares based on achievement of certain commercialization milestone | ' | ' | ' | ' | ' | ' | ' | 115,380 | ' | ' | ' | ' | ' | ' | ' |
Fair value per share of underlying common stock (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.69 | $1.69 | $1.69 | $1.37 | $4.49 | $9.74 |
Initial Fair Value of Common Stock (in dollars) | ' | ' | ' | ' | ' | ' | ' | $1,384 | ' | $234 | $156 | $195 | $78 | $346 | $375 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Fair value measurements | ' | ' |
Transfer of assets from level 1 to level 2 | $0 | ' |
Transfer of assets from level 2 to level 1 | 0 | ' |
Transfer of liabilities from level 1 to level 2 | 0 | ' |
Transfer of liabilities from level 2 to level 1 | 0 | ' |
Fair Value Measurements Recurring [Member] | ' | ' |
Fair value measurements | ' | ' |
Liabilities | ' | 0 |
Fair Value Measurements Nonrecurring [Member] | ' | ' |
Fair value measurements | ' | ' |
Non-financial assets | 0 | ' |
Non-financial liabilities | 0 | ' |
Carrying Reported Amount Fair Value Disclosure [Member] | Fair Value Measurements Recurring [Member] | Fair Value Inputs Level1 [Member] | ' | ' |
Fair value measurements | ' | ' |
Cash equivalents | $40,300,000 | $52,300,000 |
LongTerm_Debt_Commitments_and_2
Long-Term Debt, Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Sep. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | Jul. 30, 2014 | |
Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Secured Debt [Member] | Secured Debt [Member] | Term A Loan [Member] | Term A Loan [Member] | Term A Loan [Member] | Term B Loan [Member] | Term B Loan Tranch 1 [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Minimum [Member] | ||||
Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Term B Loan [Member] | Term B Loan Tranch 1 [Member] | Term B Loan Tranch 1 [Member] | ||||||||
Silicon Valley Bank [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | Amended And Restated Loan And Security Agreement [Member] | ||||||||||||||
Silicon Valley Bank [Member] | |||||||||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | $10,000,000 | $10,000,000 | $1,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less current portion of long-term debt | -611,000 | -611,000 | -1,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, net of current portion | 9,389,000 | 9,389,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion of debt discount | ' | ' | -18,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion of long-term debt, net | 611,000 | 611,000 | 1,732,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate basic points (as a percent) | ' | ' | ' | ' | ' | ' | 5.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of monthly payment of interest | ' | ' | ' | ' | ' | ' | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equal monthly installments to repay principal and accrued interest | ' | ' | ' | ' | ' | ' | '30 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of Variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'U.S. Treasury note yield to maturity for a thirty-six (36) month term | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | 20,000,000 | 10,000,000 | ' | 5,000,000 |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 6.75% | ' | ' | 6.94% | ' | ' | ' | ' | ' | ' |
Period of maturity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '42 months | ' | ' | ' | ' | ' |
Number of trading days to calculate average price per share prior to funding date of loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 days | ' | ' | ' | ' |
Net Proceeds after repayment of loans outstanding and transaction fees | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | 8,800,000 | ' | ' | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | -432,000 | -432,000 | ' | 400,000 | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | 200,000 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effective interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 10.30% | ' | ' | ' | ' | ' | ' | ' | ' |
Stock to be issued by conversion of affiliates warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' |
Cash-collateralized irrevocable standby letter of credit | 100,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future minimum payments under the operating lease | $1,700,000 | $1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Deficit_Details
Stockholders' Deficit (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Weighted-Average Price | ' | ' | ' | ' |
Total stock-based compensation expense | $527,000 | $982,000 | $1,822,000 | $1,169,000 |
Research And Development Expense [Member] | ' | ' | ' | ' |
Weighted-Average Price | ' | ' | ' | ' |
Total stock-based compensation expense | 280,000 | 581,000 | 1,074,000 | 686,000 |
General And Administrative Expense [Member] | ' | ' | ' | ' |
Weighted-Average Price | ' | ' | ' | ' |
Total stock-based compensation expense | 247,000 | 401,000 | 748,000 | 483,000 |
Employee And Non Employee Stock Option [Member] | ' | ' | ' | ' |
Number of Options | ' | ' | ' | ' |
Balance at the beginning of the period (in shares) | ' | ' | 1,726,991 | ' |
Granted (in shares) | ' | ' | 873,720 | ' |
Canceled (in shares) | ' | ' | -61,999 | ' |
Exercised (in shares) | ' | ' | -90,230 | ' |
Balance at the end of the period (in shares) | 2,448,482 | ' | 2,448,482 | ' |
Weighted-Average Price | ' | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | ' | ' | $2.30 | ' |
Granted (in dollars per share) | ' | ' | $6.66 | ' |
Canceled (in dollars per share) | ' | ' | $5.29 | ' |
Exercised (in dollars per share) | ' | ' | $1.66 | ' |
Balance at the end of the period (in dollars per share) | $3.81 | ' | $3.81 | ' |
Unrecognized compensation cost related to outstanding options | 4,500,000 | ' | 4,500,000 | ' |
Expected recognition period of unrecognized compensation cost | ' | ' | '2 years 9 months 18 days | ' |
Employee And Non Employee Stock Option [Member] | Vesting Based On Performance [Member] | ' | ' | ' | ' |
Number of Options | ' | ' | ' | ' |
Balance at the end of the period (in shares) | 160,526 | ' | 160,526 | ' |
Weighted-Average Price | ' | ' | ' | ' |
Aggregate grant date fair value | ' | ' | $700,000 | ' |
Employee Stock Option [Member] | ' | ' | ' | ' |
Weighted-average assumptions to determine fair value of stock options | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 1.90% | 1.60% |
Expected volatility (as a percent) | ' | ' | 94.50% | 90.20% |
Expected term | ' | ' | '6 years | '6 years 1 month 6 days |
Expected dividend yield (as a percent) | ' | ' | 0.00% | 0.00% |
Non Employee Stock Option [Member] | ' | ' | ' | ' |
Weighted-average assumptions to determine fair value of stock options | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | 2.20% | 2.10% |
Expected volatility (as a percent) | ' | ' | 92.20% | 90.30% |
Remaining contractual term | ' | ' | '6 years 8 months 12 days | '7 years 3 months 18 days |
Expected dividend yield (as a percent) | ' | ' | 0.00% | 0.00% |